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The Benefits of Supply Chain Sustainability

The first rule of thumb in creating a solid supply chain sustainably is to think broadly. “Companies need to think broadly about supply chain sustainability to really get the most out of it,” Nic Delaye, managing director, sustainable business solutions, at PwC US, told EBN in an interview. For example, successful initiatives look at the whole life cycle of a product, from design to end of life. Further, the initiatives need to consider the breadth of potential benefits: environmental, social, economic, and ethical, he contends.

With this new way of thinking, sustainability initiatives can reach into new areas of the organization that might include publishing codes of conduct, new ways of thinking about repurposing products, looking for new and different kinds of partners, measuring decisions against job creation, and more, he added.

At the same time, it's important to prioritize efforts and choose the top five or ten that are most material to the organization. “There is a broad variety of issues and challenges, and so it's important to measure which are most material for you,” said Delaye. “In any electronics company, there are at least a hundred issues. You need to do a materiality assessment that prioritizes based on the impact of shareholders and stakeholders.”

In addition, organizations need to get beyond simply looking at risk in the supply chain when measuring sustainability measures. “You need to consider both the risk and the opportunities in the supply chain,” said Delaye. “Too many organizations focus completely on risk.”

To get traction with sustainability, it's critical to get support from all levels of the organization and across the breadth of leadership. First, focus on getting support for sustainability initiatives from leaders across the entire organization, said Delaye. “You need people from product, sales, and supply chain, at a pretty senior level, across the board in the organization to agree on the direction,” he said. “To do that, you need to communicate the business value up front using business terms.”

Once the leaders are on board and well aligned, then the goals should be communicated to the entire organization. “Setting goals is critical, and you should have financial and non-financial incentives for those involved,” said Delaye. “You need to regularly communicate on any progress. These are all good ways to get people mobilized behind it.”

Further, in the trenches employees need to clearly understand how to prioritize sustainability goals when confronted with conflicting goals. “You really need to help people at all levels of the organization understand the tradeoffs that they need to make on a daily basis,” said Brad Householder, operations principal at PwC. “The average employee is confronted with dozens of tradeoffs in the average day and they are under pressure to get things done, reduce costs, and more. Sustainability brings that to the forefront.”

(Editor's Note: We originally misidentified a member of the PwC team. His name is Nic Delaye. )

— Hailey Lynne McKeefry, Editor in Chief, EBN Circle me on Google+ Follow me on Twitter Visit my LinkedIn page Friend me on Facebook

2 comments on “The Benefits of Supply Chain Sustainability

  1. SP
    July 2, 2014

    Cost control is a very common way for organizations to show prosperity and bring business under financial control. But this must be done without compromising creativity of the engineerings and technical team.

  2. t.alex
    July 5, 2014

    I completely agree on the “think broadly” idea. Each and every process should be considered when it comes to supply chain sustainability.

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