The Impact of Measurement on Sustainability within the Supply Chain
Categories: Strategy and Leadership
A powerful supply chain is indicative of a strong business. Take a quick glance at companies like HP, Apple or Nike to see that being able to deliver a product quickly, affordably and reliably is essential to running a global business.
But as we continue to deplete our planet’s resources, sustainability within the supply chain will become a pressing issue. And for many leaders, it already has. “Today, sustainability has replaced cost, value and speed as the dominant topic of discussion among purchasing and supply professionals,” is what the authors of an Oracle white paper, The Shape of Tomorrow’s Supply Chains, assert.
Realizing sustainability within the supply chain is often directly correlated to how well the company is able to measure its efforts. Richard Bank, Director of the Sustainable Supply Chain Foundation, says that cost-reduction can be driven through sustainability projects, but effective measurement is necessary for these programs long-term success. Only through effective measurement can leaders truly analyze which initiatives resulted in the highest cost-reduction to investment ratio--and why.
There are a number of software providers that are working to achieve the right levels of measurement and visibility in order to have this happen. A number of transportation management software providers today offer route-optimization and fuel-reduction tools to reduce consumption. One example is TMW, one vendor that providers enterprise-level transportation management systems with fuel purchase-cost reduction technology. Its ExpertFuel app creates customized fuel purchase plans to ensure that fleets are minimizing their costs on fuel.
Other companies are tackling the other side of the issue--visibility. CSRHub, for example, is working to further transparency to sustainability and corporate social responsibility (CSR) ratings of better suppliers. With access to this information, buyers can ensure the suppliers are working with are doing their part to “go green.” But it doesn’t stop here--both companies and its suppliers have to work to improve their processes to increase efficiency and reduce the strain on our already ravaged planet.
What other technology providers and businesses are working to link supply chain sustainability to reduced risk and consumption, as well as responsible business? I interviewed a number of sustainability experts and asked them what conversations need to happen for this to occur. You can check it out on our blog at: 5 Questions to Start the Sustainable Supply Chain Conversation.
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