Are you taking sustainability seriously?

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An interesting article on Supply and Demand Chain Executive entitled,  ‘Global and Green’ talks about the five emerging trends required for a sustainable supply chain. Please read the article for the details but in summary they are:

  • The closed loop supply chain
  • Thinking global
  • Certifying the supplier’s supplier
  • Resource base expertise
  • Commodities trading

The article also talks about the expertise needed among supply chain executives to properly execute sustainability: ‘Sustainability will be the new metric for the supply chain.’ What exactly is a sustainable supply chain? It has been referred to as the management of materials and services across the supply chain with explicit consideration and improvement of social and environmental impacts. For example, do you support the labor laws of your supplier? Do you support the environmental practices of your logistics provider? What would be the damage to your brand if there was one bad story?  Sustainability decisions must always take into consideration cost reduction, risk reduction, and revenue growth as they continue to be key factors in any supply chain decision. Companies are continuously weighing the benefits versus the cost of a sustainable supply chain. Defining the appropriate sustainable supply chain can be fraught with conflict. The US government has struggled with supporting the Canadian oil sands for sustained crude oil supply.  Although Canada continues to develop technologies to lessen greenhouse gas emissions it is a controversial subject. However the alternative of supporting nations who do not share the same fundamental human rights and environmental values is far less attractive as described in the article U.S.-Canada pipeline gets an initial green light. Sustainability has become an integral part of a company’s business strategy. Dashboards and key performance indicators are used to measure success in key areas of the business. They may be quantitative or qualitative measures. Sustainability touches multiple functional groups such as supply management, internal operations including logistics, and product development. Streamlining the supply chain with a renewed focus on the customer can improve supply chain performance and positively impact sustainability measures such as resource use, and employment stability. Are you taking sustainability seriously? I welcome your thoughts.

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Discussions

Arian Alexander Danilovic
- December 03, 2011 at 6:11pm
Excellent topic! I'm glad to see the issue of sustainability and its link to supply chain raised in this forum. I work in the industry and can say that this issue is not getting the required attention. I think that will change as a result of the economic downturn being experienced in many countries. More efficient supply chains (along with better procurement practices) are one of the best ways for a society to eliminate cost waste and to reduce negative environmental impact. This should be a win-win for everyone.

Regards,

Arian Danilovic
Christian Biewald
- January 16, 2012 at 5:30pm
In my opinion the setup of sustainable supply chains will be one of the big logistic challenges of the next 20 years. In some industries, first solutions to 'green' the supply chain are already existent, e.g. in food & beverages or textile industry. One of the main problems in the current situation is to create a holistic view over the supply chain and to integrate customers and suppliers into this improvement process.
Another difficult topic is the measurement of the environmental impact companies are responsible for. In order to create reliable KPIs like product carbon footprints, the whole product life cycle needs to be focused and integrated into the measurement. Furthermore, this KPI should be comparable between different industries... As you see, a quite hard topic.

Some best practices to setup sustainable supply chains can be found on my blog: SuCess
http://sucess-logistics.blogspot.com/

Best regards
Christian

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