At supply chain leaders, sustainability efforts are more than just initiatives. Indeed, efforts are embedded deeply in the organization, and value is measured from a variety of levels in those organizations that achieve best success. Making that goal a reality, though, can prove difficult.
Perhaps the biggest barrier is lack of support from top leadership in the company. “It is widely accepted that supply chain sustainability is a priority for many CEOs, but this is a complex business issue that brings with it multifaceted challenges at the management level,” says Sharon Rice, executive director of the APICS Foundation.
Although 30% of operations executives report that their organizations have documented supply chain sustainability strategies, only 17% of managers and in-the-trenches workers agree with that assessment, according to a survey of global operations executives on supply chain sustainability from PwC and the APICS Foundation titled “Sustainable Supply Chains: Making Value the Priority.”
The disconnect occurs when the organization fails to create targets and goals for its supply chain sustainability efforts that can be monitored and assured, according to the study. “Even though these initiatives are important and strategic, they don't filter down,” Jonathan Thatcher, APICS director of research told EBN in an interview. “In a practical sense, they report that they don't have good metrics and they don't have tactics that align well with the strategy. It's a matter of building maturity on these topics across the profession.”
Further, organizations often measure performance and offer incentives for employees in ways that are counter to furthering the sustainability goals. “This profession is driven by performance metrics, and compensation is tied to hitting metrics in the supply chain,” Rice told us. “Senior management contines to measure supply chain professionals more on traditional metrics of supply chain performance. While sustainability is incredibly important to senior management, the metrics haven't been defined as targets, and compensation is still awarded on those older metrics.”
On a brighter note, three out of four operations professionals reported that their focus on creating a more sustainable supply chain would increase over the next three years, the study found. In those organizations that had focused on supply chain sustainability, the benefits were clear: 43% reported cost reductions, 35% had experienced improvements in their organizations' environmental impact, and 25% traced the initiative to improved customer satisfaction.
That's an excellent start. “We need to unleash the potential of our professionals to figure out how sustainability impacts the bottom line,” says Rice. “That's still in front of us but we believe it will come.”
Let us know how your top management is supporting supply chain sustainability issues in the comments section below.
— Hailey Lynne McKeefry, Editor in Chief, EBN