Sustainability: business, life, environment

The continuous cycle of centralization to decentralization has been pondered by business leaders through the course of history.  The factors that shape the value proposition of one model versus the other often shift, which in some cases turns the tide in the other direction.  The question we discuss with peers in our sustainability consulting is what affects, if any, will the pressures of sustainability have on future business models.

Over the years, we have observed some common practices present in both large and small companies focused on supply chain management.  Among many other commonalities, a major portion of the supply chain management efforts have been an exercise in leverage sourcing.  Our professional consulting has witnessed this search for value in the form of centralization and consolidation of corporate spend.

The overriding value of leveraging spend across an organization has been primarily price focused.  The value of price concessions for a large volume of business has historically overshadowed the positive aspects of local sourcing and control of business purchases.  The questions now being considered in a business sustainability context are:

•    How will the pressures, risks, and opportunities of sustainability affect business?
•    Will the eventual price for carbon dramatically affect supply chain costs?
•    How will the transportation cost be impacted?
•    Will centralized inventories still be the most economical?
•    Will supply move closer to consumption?
•    Will total cost decision criteria shift?

At Taiga Company, we encourage clients to recognize business sustainability as a unique pursuit of their organization.  The value drivers that ultimately determine their business sustainability strategies and supply chain models are specific to their company and stakeholders’ values.  Our professional consulting resources are here to assist companies interested in sustainable supply chain improvements that increase eco awareness and drive sustainable change.