Sunday, April 8, 2012

Bringing Sustainability to the Supply Chain Table - Five Questions to Ask Your Leadership

As consumers ask for more sustainable products and shareholders demand supply chain transparency, sustainability within the supply chain will shift from “greenwashing” to being a descriptor of a powerful businesses. These are the questions leadership has to discuss for sustainability to become synonymous with both cost-reduction and social-responsibility within the supply chain.

1. How can we better measure sustainability?
Organizations that lack measurement tools have difficulty assessing the performance of sustainability initiatives. That’s why tools like CSRware’s Sustainability Supply Chain package are necessary for providing decision makers with actionable information.

2. How can we instill sustainability into our suppliers?
Oftentimes, suppliers need encouragement from buyers to become more sustainable. Maintaining scorecards--and explaining to suppliers their importance--is one way to motivate suppliers. Proctor and Gamble’s Supplier Scorecard ( is an example of how one company is motivating suppliers to become more sustainable. Another way to have suppliers become more sustainable is by asking what it would take for them to make their process more “green”--sometimes just asking, “How can we work together to increase sustainability?” is all it takes.

3. How can we design more sustainable products?
While improving logistics processes and reducing energy-expenditure is often a great way to become more green, improving product design is sometimes the most efficient way to reduce reliance on natural resources and help the environment. Detergent companies have found a way to do this by developing concentrated-formula detergents--less water in the formula has little impact on the product’s effectiveness, and it greatly reduces a company’s transportation needs.

4. How can we avoid socially-negligent suppliers?
Dealing with socially-negligent suppliers (either intentionally or not) can be extremely risky for businesses. Two prime examples are Mattel and Nike. Mattel spend $110 million in product recalls in 2007 after it was discovered that its Tier 2 Suppliers were using lead paint in its toys; Nike had a PR disaster when it was found that its products were being manufactured with the aid of child labor in the late 90s. Companies have to go beyond public transparency--and make it clear to suppliers that they won’t work with them if they aren’t respecting basic human rights. Apple has attempted to do this by opening its own supply chain to the Fair Labor Association for external auditing.

5. Who can we trust to drive sustainability?
Corporations can invest copious amounts of resources and money into best-in-class technology, but it still needs people to manage its supply chain. Likewise, leaders have to assign its best people to sustainability initiatives if they have any hope to make great strides. And those within the supply chain have to be willing to spearhead sustainability initiatives and take charge--shifting the goal of a “sustainable supply chain” from being an initiative to a descriptor of a powerful corporation.

Michael Koploy, ERP Analyst at Software Advice -- a free online resource that provides reviews and comparisons of transportation management systems -- continues the discussion at 5 Questions to Start the Sustainable Supply Chain Conversation.