Sustainable Supply Chain

In the corporate world, most business leaders agree that achieving real bottom line improvements, whether through cost savings or elevated revenues, is critical to business sustainability.  However, these bottom line achievements are not a one-way street.  Our sustainability consulting experience tells us that success is the result of close collaboration with key stakeholders committed to the business’s success. 

Referring back to the post, Long Term Supplier Partnerships Key to Unilever’s Sustainable Growth, we build upon this concept though the eyes of a business sustainability leader.  As the article explains, focusing on increased collaboration and integration with key suppliers has proved to be a win-win for Unilever and its supply chain.

“Most companies want to collaborate with key suppliers but fail because they try to work with too many or focus on projects that are untimely or irrelevant to their partners. Progressive organizations choose only a few projects that both parties consider urgent and important for their overall business strategy.” –Procurement Strategy Council

At Taiga Company, our professional consulting works with clients to build a long term business sustainability plan that adds value by identifying critical relationships and taking proactive steps to engage those stakeholders in the process.  Through collaborative stakeholder engagement, a company can promote engagement, create alignment, and ensure the most effective results.  Some of the specific benefits include:

• The supply chain working together under aligned sustainability goals. 
• Business responsiveness to the expectations of the consumer.
• Business practices designed for minimal environmental impact.
• Realized benefits of a supportive local community.

Whether incorporating individual sustainability concepts or creating a sustainability plan for the entire business, the ability to effectively engage the outside world in the process is critical to success.  Because ultimate success relies heavily on the effective stakeholder engagement with the company’s internal and external business resource, our sustainability consulting focuses heavily upon social media engagement strategies  to optimize the communication gateway within the supply chain.

Sustainability has been described as a continuous improvement process that challenges business to balance and align the shifting expectations of stakeholders with their optimal business sustainability direction.  While sometimes seen as an overwhelming landscape of potential improvement, a common thread of ‘collaboration’ can be seen through just about every potential business sustainability action.  

Expanding upon this thought, our sustainability consulting refers back to the post which appeared on GreenBiz earlier this month, M&A: How to Find a Sustainability Strategy that Works. This article posed an interesting and pressing question for many of today’s executives.  

While GreenBiz focused on corporate cultures that facilitate a strategy, our sustainability consulting reminds readers that internal resources are not the only stakeholders with a vested interest.  We offer some points of consideration in building business sustainability alignment with all key business stakeholders.

• Initiate innovative idea generation and grass-roots business sustainability action.

• Seek-out opportunities to lower costs, initiate process improvements, and stimulate mitigate risk.

• Establish internal and external expectations for redefining products and service attributes.

• Align business sustainability expectations with supply chain partners. 

A defining characteristic of this mindset is a recognition that stakeholders play a key role in defining and executing long-term business sustainability success.  Our sustainability consulting is a strong advocate for the value opportunity in managing key business relationships, and we view sustainability alignment as a "must have" strategy for long term business viability and success.  However, at what level are stakeholders involved in the ‘decision-making’ process of a business?

“In addition to attracting and retaining talented category managers to identify new savings areas, leading Procurement organizations also unpack complex spend categories into more manageable subcategories. Keep in mind that the highest return opportunities are not necessarily the projects with the highest amount of spend or those that are easiest to implement.”  –CEB Views

Following in these footsteps, a recent Spend Management post chronicles one organization’s efforts to make its procurement more effective.  Rather than focusing on reducing its direct spend, thereby increasing tension in its supply chain, the BBC has instead chose to expand its view of traditional cost control.  The company now works with key suppliers to collaboratively increase efficiencies and reduce process cost.

Our sustainability consulting experiences have revealed that business sustainability mindset shifts have resulted in strategic sourcing and procurement guidelines to align suppliers with defined business sustainability strategies.  We believe that just within the last year the business community at large has seen a monumental shift.

Moving forward in the next few years, our business sustainability consulting subscribes to the idea that the next generation of sustainable category management will continue to evolve.  Focused on a new level of responsibility across all supply chain activities, like those demonstrated by the BBC, will drive deeper into category value by addressing more pointed supply questions.

An emphasis on environmental awareness, social responsibility, and business sustainability actions within the supply chain has incentivized more progressive companies to begin to evaluate more than just their inbound supply.  Our sustainability consulting finds the once limited procurement functions are now expanding their organizational reach to a variety of business sustainability stakeholders.  Visit with us at Taiga Company to learn more.

“Sports equipment and clothing retailer Adidas managed rapid improvement among its suppliers in India. In 2010, about 80% of the vendors didn’t meet the company’s social compliance standards; in 2011, more than 80% met those performance goals. The company says the achievement resulted from working directly with the suppliers and setting strong targets.”

Taken from the Supply Management article, Adidas Turns Indian Supplier Performance Around, our sustainability consulting gathers valuable insight from the company’s success.  Turning the performance of supply chain around in a very short time, Adidas realized an almost unbelievable improvement in their corporate social responsibility in just one year.  The company monitored and realized significant improvement in the following six areas of improvement:

• Management Commitment and Responsiveness
• Management Systems
• Worker-Management Communication and Industrial Relations
• Compliance Training for Workers and Management
• Transparency in Communication and Reporting
• Compliance Performance

The above example along with our sustainability consulting experiences reveal that today’s sustainable supply chain organizations are focused on integrating sustainability concepts directly into their purchasing processes.  These efforts are designed to not only improve supply chain performance but to establish the next-generation sustainable supply chain management. 

Further research reveals that success relies heavily on the effective stakeholder engagement with the company’s internal and external business resource.  Taiga Company  offers social media engagement strategies to improve performance through optimized communication within the supply chain.

Business implementations over the last few years has revealed that many executives and their procurement organizations now view environmental and social responsibility actions within in the supply chain to be both a risk mitigating strategy and a business opportunity. These corporate actions are taking strategic sourcing and supplier relations to another level of supply chain sustainability. Our sustainability consulting asks: What is the next step in Sustainable Supply Chain Management? 

The CSR Digest recently released a post  which examines today’s value drivers of sustainable supply chain collaboration.  The article describes how long term supplier partnerships at Unilever have become critical to the company’s sustainable growth. 

“Unilever has a bold ambition to double the size of its business whilst halving the environmental impact of its products…t is vital that we work in closer partnership with our strategic suppliers to ensure faster innovations and invest sustainably throughout our value chain.”  -Pier Luigi Sigismondi, Chief Supply Chain Officer Unilever.

Having worked within some of the world’s leading supply chains, our sustainability consulting supports the direction of Unilever.  Similar to the company’s efforts, we recall the comments of the Procurement Strategy Council when enabling suppliers.  To effectively capture supplier innovation, PSC advises companies to focus on three priorities: 

• Provide suppliers with the right amount of direction
• Involve business partners in the ideation process 
• Enable effective IP sharing

By engaging  the knowledge of key supply stakeholders, your business can make significant gains over the competition, which may be unwilling to share information. Our sustainability consulting stresses the importance of a sustainable supply chain management philosophy as part of a larger business sustainability plan.  Visit with us at Taiga Company for more information and business resources to unlock the strategic value of a sustainable supply chain.

Developing a comprehensive business sustainability plan includes incorporating sustainability concepts across the entire supply chain.  A major part of this strategy is the need to facilitate an open two-way dialog with key business sustainability stakeholders to ensure alignment.  Armed with direction, our sustainability consulting asks: What are the likely next steps to initiate action?

“As Procurement's opportunity set fluctuates, periodic reviews are necessary to ensure that resources are allocated appropriately. To preserve enough time for staff to work on the most important projects, leading procurement organizations regularly and transparently assess the relative value of their activity mix, and reset priorities accordingly.” –Procurement Strategy Council

A sustainable supply chain management plan is viewed as an all encompassing analysis and management profile of spend with several major components.  Our sustainability consulting considers risk along with other evaluation methodologies, including spend classification and functional categorization, to be a framework from which an organization can create sustainable value deep within the supply chain.  

• Bring down costs whilst delivering sustainability  
• Develop an effective sustainable procurement strategy aligned to your organizational goals  
• Align your procurement processes to ensure engagement from your suppliers  
• Effectively monitor the sustainability progress and competence of your supply chain  
• Understand how much you can expect from your suppliers and ensure it works for them too 
• Create a team of sustainability champions from your procurement team

Our sustainability consulting research and experiences show that today’s sustainable supply chain organizations are focused on integrating sustainability concepts directly into their purchasing processes.  These efforts are designed to not only improve supply chain performance but to establish the next-generation sustainable supply chain management. This success relies heavily on the effective stakeholder engagement with the company’s internal and external business resource.  Taiga Company  offers social media engagement strategies to businesses seeking to optimize this communication gateway within the supply chain.

The economic challenges over the past few years resulted in a ‘business detour’ from progressive corporate practices, particularly advancements in sustainable supply chain management.  Moving beyond early post-recovery actions focused on cost control and business maintenance, today’s leading business sustainability efforts have their eyes on a much larger prize.  Once again corporate attention is focused on the role strategic supplier relationships play in the immediate return to profitability and long-term business sustainability.  

Leveraging the Environmental Leader article, Survey: Sustainability an ‘Important Factor’ in Supply Chain Choices, our sustainability consulting examines the state of sustainability in supply chain decision making.  Citing the results from a 2012 survey, the post describes how sustainability concepts are becoming increasingly relevant and are showing up consistently across the value chain.  The following statistics represent a snapshot view of sustainable action in the supply chain from those surveyed. 

• 26 percent of respondents said cost considerations outweighed environmental factors when purchasing products and services

• 54 percent of companies said when two purchasing choices are equal (including cost), the greener product or service is better

• 20 percent said when two purchasing choices are not equal, greener is better

• 17 percent of companies said sustainability is a standard part of their request for information, proposal or quote system

• 59 percent of companies said they consider sustainability periodically for specific types of purchases.

Consistent with our own experiences, these results point towards a renewed sustainability-driven focus in business and the supply chain.  We firmly believe that by embracing the merging principals  of business sustainability, a company can better position itself in the increasingly positive economy.  Visit with us at Taiga Company to learn more.

“In today's economic environment, companies are continuously pressured to reduce costs in order to combat slower growth and offset commodity price increases, rising costs of energy and transportation, and various other pressures. Despite these issues and the economic instability worldwide, companies must continue to find growth opportunities to compete in the global marketplace. The question I keep returning to is, why don't more CFOs turn to indirect procurement as a significant source of savings to create a competitive advantage and fuel this growth?”  - Robert Brust former CFO for Sprint

Following on this same line of thinking the Huffington Post article, The New Procurement, examines the characteristics of an evolving and strategic function within today’s business.  Leveraging the advancements in manufacturing as a foretelling for change in other industries, the post highlights the opportunities for comprehensive sustainable supply chain reform.  Areas of note include:

• Raising revenues
• Improving margins and reducing costs
• Expanding globally through export and foreign country platforms
• Product and process innovation
• Raising productivity
• Better training and use of human capital 

Our sustainability consulting considers risk along with other categorization methodologies, including spend classification and functional categorization, to be a framework from which an organization can create sustainable value deep within the supply chain.  A traditional category plan is viewed as an all encompassing analysis and management profile of spend with several major components:

• Commercial Strategy 
• Supplier/Contract Management Plans 
• Demand Management Plan 
• Communication/Change Management Plan 
• Continuous Improvement Process

Building a strong business sustainability plan usually requires a company to incorporate sustainability concepts across the entire supply chain.  Our sustainability consulting provides information and tools to clients seeking to develop successful business sustainability strategies to drive sustainable value beyond their direct spend.  We leverage social media engagement strategies and tools to communicate across the entire value chain.

What is Karma?   Karma is a Sanskrit word that means "action." Karma has commonly been considered a punishment for past bad actions, but karma is neither judge nor jury. Rather, it is simply the universal law of cause and effect that says every thought, word and act carries energy into the world and affects our present reality. From a sustainability viewpoint, how does karma apply?  Many argue that business is best used as a vehicle to not only aid in solving today's environmental challenges, but also to help create a better world.

If so, then How do business leaders walk the delicate art of transitioning to more sustainable business strategies?  When you think about it, the requirements to maintain a sustainable business today are quite different than they were just ten years ago.   Companies on the leading edge are evaluating the economic, social and environmental impacts that will ultimately affect profitability.  Green business practices are becoming more and more the norm, as companies both large and small realize the value of integrating eco awareness and sustainability concepts into their operations and business strategies.   

For example, many organizations are developing strategies to reduce emissions.  These organizations are proactively implementing process improvements and new technologies to add value and reduce risk.  By focusing on and applying resources to a broad concept, a company can drill-down to more detailed sustainable actions to address:

•    Office Building Energy Consumption – evaluating the average energy use per square foot of office space and implementing best practices to reduce: energy consumption studies, efficiency practices, equipment modifications, etc.

•    Operations Efficiency – incorporating energy efficient process into their daily operations, evaluating peak hour consumption, and decreasing off-hour usage.

•    Supply Chain Efficiency: creating integrated processes with suppliers to improve communication, ensure common sustainable processes, and increase energy efficiency.

Masterful companies recognize that business sustainability is a mind-set change that should be consistent and in alignment with organizational commitment and continuous improvement efforts already in place within the company.  The critical elements to affective implementation include: executive leadership, consistent action, clear communication, and stakeholder engagement.

While eco awareness is important, demonstrating sustainability values through eco action is key.  "Like a beautiful flower that is colorful but has no fragrance, even well spoken words bear no fruit in one who does not put them into practice."  ~ Dhammapada, Sayings of the Buddha, Pali Cannon

The GreenBiz article, GE and GM: How to Get the Most Out of Convergence, explores the internal working of technological advancement in large corporations.   Armed with an abundance of resources, these leaders are beginning to realize that size and force do not necessarily drive change.  There are in fact larger forces at work that must be recognized and voices to be engaged. 

“While the technology advances being made via smarter buildings and transportation systems are impressive, their adoption is still driven by market forces. It's not just about the technology. Customers are looking for higher quality, lower cost, greater effectiveness." - Don Reed, director of U.S. Sustainable Business Solutions at PwC

In previous posts, our sustainability consulting has posed the broad question: can social media save the world?  Narrowing this to a more pointed discussion: How is social media engagement changing the face of business?  To answer this question, we cast aside traditional measures and replace them with the growing and tangible value which can no longer be ignored.

• What are the market forces and/or shifting consumer expectations shaping future innovation?

• How are businesses engaging consumers in growth markets?

• How can an aligned sustainable supply chain become a competitive advantage?

• How are these concerns and opportunities driving shareholder value?

Stakeholder engagement is no longer a defined by how well your company communicates its message to the external world.  Social media success is rapidly becoming a critical business sustainability skill and a business sustainability catalyst that is affecting the bottom line.  Our sustainability consulting offers information and tools to assess the market, your competition, and your own efforts in the social space around your business.  Visit with us at Taiga Company to learn more.

In today’s global business environment, it is rare for a company to own an entire product or service value chain.  Business operations rely heavily on external sources exposing the supply chain as a critical component of business success.   Leading organizations are using the procurement function as a means to move towards a more sustainable business by forming "strategic relationships" with companies, large and small, who demonstrate leadership.  

With that being said,misconceptions of business sustainability as a passing trend are quickly falling by the wayside.  Larger organizations, traditionally mistaken as burdened with a primary responsibility as change agents in the water, carbon, environment and climate change solutions are now shifting the burden to include suppliers.  Walmart is one example.

Recently, Walmart announced that it will broaden its initial 15-question scorecard to 100 major categories, with category-specific questions, by the end of this year.   As the post, Why Walmart's better supplier scorecard is a big deal states, " When Walmart introduced its initial scorecard, tens of thousands of suppliers increased their investments in sustainability. This expanded scorecard promises to have an even bigger impact. Not only will it shift the landscape for Walmart suppliers, but it also could greatly influence supplier scorecard programs at many other companies.'  

To unprepared organizations, the business risks of carbon, water, and climate change disclosure takes many forms:

•    Potential increase in operating cost

•    Potential increase in supply costs

•    Potential disruptions to supply or loss of supplier relationships

•    Potential loss of revenue or market share

•    Potential to business reputation 

•    Potential inability to secure investment dollars or capital

Water, carbon, waste, and energy management is becoming a critical sustainable business strategy to address internal and external supply issues.  Creating supply chain management alignment through increased eco awareness, cooperative business relationships, and applied sustainability concepts can have immediate business impacts and reduce business sustainability risk.  Taiga Company provides professional consulting and business resources to business leaders seeking to make significant and sustainable improvements in their internal and external operations.

“To maintain relevance, Procurement must expand its support of business growth strategies beyond standard cost reduction. Procurement organizations that mix sophistication, impact, and payoff horizon deliver more than three times the yearly savings and four times the annual innovation of their peers.” –Procurement Strategy Council

Building on this thinking, a recent Supply Management post, Nearly Three-Quarters of CFOs Believe Procurement is More Strategic, offers its own insight into the shifting corporate perceptions of sustainable supply chain management.  Leveraging the research of several professional consulting firms specific to the space, the article summarizes the results by identifying an elevate status for procurement in the business world.

Within our own sustainability consulting, we have observed a variety of organizations reevaluating their traditional business process, with some of the most notable in the supply chain.  Further experience has revealed that many leading companies are, in fact, exploring the unique value in elevating sustainable supply chain management as a strategic business sustainability function.  Some common areas which are driving enhanced business value include:

• Strategy Assessment – Evaluate business needs, market conditions, and sustainability value drivers (research / benchmarking) to improve supplier relationships or initiating sourcing.  

• Strategic Sourcing – Improve sustainable material selection and supplier manufacturing processes as part of supplier selection criteria. 

• Supplier Management – Establish key supplier performance metrics to ensure continuous alignment with sustainability targets and assess the overall health of these key business stakeholders. 

• Inventory Management – Integrating key suppliers in business process to optimize inventory levels on critical supply, resulting in lower carrying cost, waste and material obsolescence. 

Building of a comprehensive business sustainability plan includes incorporating sustainability concepts in the supply chain.  Our sustainability consulting and small business resources provide information and tools to clients seeking to develop successful business sustainability strategies that transcend traditional business sustainability strategies, like cost cutting.  Visit us at Taiga Company  to learn more.

Much of the popular text and research reveals that a common characteristic among sustainable organizations is an ability to effectively manage the flow of information across key business stakeholder relationships.  In fact, our sustainability consulting finds that the true business sustainability differentiators are those who understand and effectively manage their supplier and customer relationships.  The question then becomes: How do companies balance growing needs with increasing risk?

In a recent study conducted by CFO Research Services in collaboration with professional consulting services firm Crowe Horwath LLP, the research concludes that third-party relationships are becoming a permanent fixture on the corporate landscape.  With more than half of respondents seeking third party support, there is recognition of increasing business sustainability risk.  

Referring back to our own professional consulting study on the topic, we leverage the post, 3 Pronged Approach to Mitigate Supply Chain Risk with Sustainability.  This text offers guidance on managing risk in the supply chain.  Focused on how organizations can take a more proactive approach, we study a structured three-prong framework to sustainable supply chain risk mitigation.  Key components of this comprehensive advice include:

• Look Beyond the Obvious – Some organizations focus on mitigating risks that are palpable and overlook less-obvious ones.

• Expect the Unexpected – Organizational risk-management plans may deal with known or suspected risks but fail to provide a comprehensive overview of the risks inherent within the supply chain. 

• Practice to Be Perfect – Some risk-management plans are contained neatly in binders and placed on shelves. That doesn’t mean those responsible for implementing these strategies are aware of the origin, likelihood, and severity of risk that exists. Effectively planning for risk requires full disclosure of risks, and all risk-mitigating and contingent actions that may be required, to all who will have to perform such actions. 

Our professional consulting has observed how many leading companies are now realizing the unique value of elevating sustainable supply chain management as a strategic in-house competency.  This evolved perspective is just the beginning of expanded eco awareness and reform in global supply. We believe visibility, engagement, and stakeholder alignment will drive sustainable business practices and begin to address 3rd party risk in the supply chain.

Today, leading business sustainability minded companies are taking the opportunity to rework traditional practices and business models to position themselves in a more favorable position for the future.  Our sustainability consulting finds these organizations are now including ‘business sustainability’ in the profitability equation.  This has consequently expanded the traditional perception of business risk particularly in the supply chain.

“Leading procurement organizations invest in upfront protection for critical supply in addition to their risk monitoring and response efforts…This will help you understand where to invest in preemptive actions such as dual-sourcing, long-term contracts, proactive supplier shifts, etc.”  -CEB Views

Continuing with this line of thinking, the Corporate Executive board further expands this concept by offering some basic supply questions to consider:

• Where are your biggest vulnerabilities?
• What puts the most revenue at risk? 
• Who are the vendors most closely linked to those supplies?

After years and even decades of outsourcing and offshoring, the business world now realizes that monitoring and surveillance to be essential to today’s sustainable supply chain.  Driven directly by supply disruptions, quality issues, or negative 3rd party business practices affecting the stability of the company, supply chain visibility and control is receiving the needed and long overdue business recognition.  

Our sustainability consulting finds that building risk management monitoring and surveillance into a comprehensive business sustainability plan has become a top priority for more and more business executives. With an ability to identify the indicators of change and proactively respond, your organization can stay one step ahead.  Taiga Company provides information and resource to companies seeking to mitigate risk by increasing stake holder engagement and making proactive changes to traditional business practices.

Businesses around the world are feeling the pressures of rising energy and water costs, as well as the potential costs of emissions.  Leading the headlines today are the impacts rising oil prices are having on business costs across the entire value chain.  Thus, our sustainability consulting asks: how is your company hedging these increasing business sustainability pressures?

“The daily debate over the extent of fuel price rises is further complicated by regional supply issues and unpredictable geopolitical events. We advise companies to use scenario planning and broaden the range of strategic thinking among category managers; help them adjust their plans in response to changing external circumstances.”  -Corporate Executive Board

While business risks and costs are often the primary drivers for behavior change, leading businesses are exploring sustainability concepts to identify opportunities.  Many companies are addressing these risks by exploring the value aspects of proactive strategies. In fact, we have observed a recent shift by individuals and businesses towards more sustainable factors to create a completive position over the competition.  These organizations are focused on:

• Energy availability and reliability
• Reevaluation of traditional energy sources
• Availability and access to renewable energy sources
• Continued technology advancements to increase efficiencies 

Energy management is a business sustainability concept that reduces cost and adds competitive value.  Our professional consulting advises clients to focus on solutions that have immediate and long term impact.  Visit us at Taiga Company  for information and resources to get started today in build energy management into your company’s business sustainability plan.

“The most successful risk-management plans are those that involve input from and education for key stakeholders. Many organizations invest significantly in training programs to improve employee skills, but not in educating employees on inherent business risks and their role in managing and mitigating such risks”.

This quote taken from the recent CFO.com post, Avoid Three Key Supply-Chain Land Mines, offers continued guidance on managing risk in the supply chain.  Focused on how organizations can take a more proactive approach, the author offers a structured three-prong framework to sustainable supply chain risk mitigation.  Key components of this comprehensive advice include:

• Look Beyond the Obvious – Some organizations focus on mitigating risks that are palpable and overlook less-obvious ones.

• Expect the Unexpected – Organizational risk-management plans may deal with known or suspected risks but fail to provide a comprehensive overview of the risks inherent within the supply chain.

• Practice to Be Perfect – Some risk-management plans are contained neatly in binders and placed on shelves. That doesn’t mean those responsible for implementing these strategies are aware of the origin, likelihood, and severity of risk that exists. Effectively planning for risk requires full disclosure of risks, and all risk-mitigating and contingent actions that may be required, to all who will have to perform such actions.

Within our sustainability consulting, we find common characteristics among sustainable organizations to have the ability to effectively manage the flow of information across key business stakeholder  relationships.  While many organizations target immediate value, some of the more well known leading organizations continuously assess the health of their supply base.  This provides for opportunity to immediately determine risk.  In fact, the true ‘business sustainability’ differentiators are those who understand and effectively mitigate the potential derailleurs of supply. Visit us at Taiga Company to learn more.  

Consider the following findings from the Hay Group: Research conducted worldwide shows that leadership contributes to 70% of corporate atmosphere, while corporate atmosphere contributes to 30% of corporate performance. Therefore, leadership can exert direct influence on 21% of corporate performance.   

Sustainable business leaders are evaluating new markets, new products, and going after the most innovative people.  In addition to executive management playing a critical role in the success of a company, business sustainability requires leadership across the entire organization.  While management may ultimately carry the responsibility of sustainable business results, employees have a part to play in the definition and implementation of the company’s business sustainability programs.  Whether led by a sustainability executive or traditional management, a sustainable organization has many teams and key roles for individuals seeking to become leaders.

Enter the role of supply chain professionals. Software Advice's latest blog post, 5 Questions to Start the Sustainable Supply Chain Conversation poses 5 key inquiries: 

1. How can we better measure sustainability?
2. How can we instill sustainability into our suppliers?
3. How can we design more sustainable products?
4. How can we avoid socially-negligent suppliers?
5. Who can we trust to drive sustainability?

The recent emergence of sustainable supply chain management has provided companies with the opportunity to review processes, materials, and operational concepts from a different perspective.  It incorporates the role of the environment in supply chain value creation.  Encouraging you to read the full post here, it explores the five conversations that must occur within supply chain leadership for sustainability to become synonymous with reduced cost, risk mitigation and a socially-responsible business.  How is your organization improving the sustainability of its supply chain?

The traditional business mentality has been that suppliers need customers, and they will do just about anything to keep their existing business.  But what happens when a supplier becomes misaligned with the customer and realizes that the business relationship is not in their best interest.  What happens when the supplier becomes ‘business sustainability smart’?

“Suppliers are getting smarter—they realize that overall spend is not necessarily the best way to determine who their top customers are, and this opens the door to more competition for their scarce resources. This growing competition for supplier attention and resources places new pressure on Procurement to be the buyer of choice.” –CEB Views

Further exploring this concept, our sustainability consulting leverages the Strategic Sourceror post, Negotiation No Longer the Most Important Skill for Purchasing and Supply Chain Managers.  Examining the results from a survey of 2,500 purchasing and supply management professionals from around the world, the article focuses on the evolving skills requires of today’s procurement professionals.  With sourcing and supplier selection topping the list, alignment seems to hold the key to sustainable supply chain success.

“Understanding a shifting marketplace and being able to shift procurement strategies is critical to any business and procurement professional who wishes to continue to drive savings from their supply chains. The results for this survey conclude that savings go up when procurement personnel are adequately trained.” 

Our sustainability consulting stresses the need to have comprehensive business sustainability strategies in place to address holistic environmental, social and economic impacts.  In order to implement this new business plan, a company must to have the right resources with the right skills in place.

Driven by a wide variety of business sustainability goals and objectives, leading companies around the world are searching for value in the supply chain.  Primarily focusing on upstream opportunities, the often less addressed and sometimes forgotten side of the supply chain conversation is the sustainable improvement of outbound distribution.

In our continuous search for new information, our sustainability consulting gathers insight from the GreenBiz article, The Logistics of Greener Supply Chains.   Leveraging the feedback from 322 Chinese firms in a recent logistics survey, GreenBiz explores the factors that influence the adoption of green practices in a lesser known and under recognized market for potential learnings.  Key findings included:

• Complexity: Firms were more likely to adopt green technology and practices when they offered an advantage and were well suited to a business. Complex practices were less likely to be adopted by firms.

• Business Support: Green practices were also more likely to be adopted if firms provided organizational support, such as extra resources and training, increasing employee motivation for adoption and when they were subjected to regulatory pressures and/or received government support.

• Uncertainty: Uncertainty in the business setting, in the form of frequent and unpredictable changes to technology or customer preferences, inhibited firms from adopting green practices.

As the business world actively pursues improvements in the supply chain, many companies are also taking an active role in managing their outbound logistics and distribution processes.  These comprehensive business sustainability programs include not only internal company operations but strategies to address processes that extend beyond the physical boundaries of the business.   Our sustainability consulting seeks out and distributes information to those seeking to make steps towards a sustainable supply chain.  Challenges in emerging markets often provide valuable insight that may be otherwise overlooked.

Business sustainability performance has been a topic of debate for as long as our sustainability consulting practice can remember.  There are the common questions that rise on every project and just about every discussion: How will we know that we are making progress?  How is our performance in comparison to our peers?  What are the measures of success?

The Inc.com post, 6 Ways to Measure the Success of Any Project , offers a traditional view of performance from which we can expand upon our business sustainability discussion.  Focused on project performance, the author defines success as ‘meeting the expectations of the customer’.  Taking this definition, it becomes important to define the customer and his/her criteria of success.

In a similar fashion, our sustainability consulting spends a great deal of time defining business sustainability stakeholders and assessing their expectations.  Through active engagement, business sustainability can be defined by the alignment of expectations with company objectives.  

Several forward-looking sustainable supply chain performance questions posed by GreenBiz  to supply stakeholders include:

• Do you have a business continuity plan that is linked both to your operational risk management program and your sustainability effort? 

• Do you have an active engagement program that you use to determine the interests of your key stakeholders? 

• Do you use an integrated management system to make sustainability a key component in how you operate your business rather than having it work as a peripheral activity? 

• Are you quantifying the continual improvement made within your sustainability program with a single score? 

• Are all three responsibilities (i.e., environmental stewardship, social equity and well being and financial prosperity) integrated in your sustainability program? 

Whether a company is just becoming familiar with the concept of business sustainability or is a sustainability leader in the industry, there are business improvements that can increase eco awareness and drive sustainable change.   Our sustainability consulting encourages clients to recognize that business sustainability is a continuous and long-term journey that requires the active engagement of key stakeholder to produce success.