Daily Archives: December 30, 2007

AT Kearney’s Sustainable Supply Chain

Last month, the Supply Chain Management Review published “The Sustainable Supply Chain” by Daniel Mahler that was based upon a joint study to assess corporate sustainability practices by A.T. Kearney and the Institute for Supply Management. The study found that sustainability efforts have started in a number of firms, and that it appears that a growing number of companies have started to put in place specific, comprehensive sustainability strategies for internal operations and external relationships. However, this also means that a number of firms have not yet embraced sustainability.

The article notes that it’s time for “wave two” sustainability – for companies to move beyond simply saying what’s right to doing what’s right and make sustainability happen – and I have to agree. Especially since the process of moving to sustainability, at a high level, isn’t that hard. It’s just like every other initiative and can be summarized as per the article:

  • Devise a Sustainable Strategy
    This will require a lot of research, rolling up the sleeves, and putting in the hours to get it done – but considering that 36% of firms surveyed have a formal sustainability strategy for managing their supply chains, it’s obviously doable.
  • Retool the Organization
    The study found that more than one-half of companies evaluate supply management executives against some sustainability standards. For sustainability to be taken seriously, everyone should be measured against it. We need 100% of companies adopting standards and making sustainability a priority.
  • Manage Supplier Relations
    Your supply chain isn’t sustainable unless it’s sustainable end-to-end. You need to make sure your suppliers also institute sustainable practices, and work with them if they need help.

The article also offered up some guidelines for going forward that weren’t too bad. In summary:

  • Survey the Strategic Context
    Start by understanding your economic, environmental, and social priorities.
  • Understand Risks and Opportunities
    A primary goal of your strategy should be to limit the exposure of your supply chain to social and environmental risks as well as future supply-demand imbalances.
  • Get Ready.
    Update your strategy, processes, and operations as required.
  • Set Priorities.
    Set formal priorities for implementing plans based on ease of implementation and expected value. Make sure the targets are measurable and visible!
  • Go!
    Just Do It!

Remember, sustainability is not only a chance to contribute to societal good, but also a powerful source of competitive advantage in the burgeoning environmentally-conscious economy.