Business Sustainability: A Story of Supply and Demand

iage: supply and demandOver the past few years, companies across all industries took extreme measures to manage the financial pressures and risks of uncertain economic times.  However, as we now emerge from this down trend, the business sustainability decisions necessary to survive may actually be presenting new supply chain challenges. 

Many organizations in the late 00’s targeted the immediate value of inventory reduction, supply cost reduction, and supplier rationalization as stay-in-business strategies. While appropriate in the moment, these now extremely lean supply chains may be struggling to keep up with a rebounding consumer demand.  This has many supply chain professionals wondering:

•    Did the economically driven business actions over the past two years permanently affect the future health of our supply chains? 

•    How long will it take for our critical supply paths to be re-energized?

•    Will current supply levels be able to keep up with our growing consumer demand?

•    Should we commit to a positive future with a fully operational supply chain?

In a negative economic environment with a shrinking demand, the tendency is to focus on ways to reduce, often neglecting work to optimize supply.  This too often limits a company’s growth potential when the tide turns.

The lessons learned from the recent downturn are refocusing the business perspective of sustainable supply.   Our sustainability consulting views the coming financial recovery as a platform for more sustainable supply chain management.  We find many organizations working to:

•    Incorporate strategies that will reduce process and transaction inefficiencies.

•    Integrate management system to enable sustainability as a key component of supply chain management.

•    Engage supply chain stakeholders to bring closer alignment on business sustainability metrics.

A trademark of sustainable organizations is the ability to effectively manage the flow of information among key business stakeholder relationships. Through collaborative stakeholder engagement in the supply chain, companies can create business sustainability alignment and ensure the most effective results. 

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