The strongest link
In today’s global business environment, it is extremely rare for a company to own an entire product or service value chain. Business operations now rely heavily on external supply and resources. Driven by a wide variety of business sustainability goals and objectives, leading companies around the world are searching for value in greater supply chain transparency.
Procurement organizations are now placing an emphasis on environmental and social responsibility actions within in the supply chain. These companies are creating strategic sourcing and procurement guidelines to align supplier operations with business sustainability strategies. As a result, this has made the supply chain a critical component of business sustainability success.
Coupling supply chain best practices with business sustainability strategies, many companies are opening the door to improved consistency, reliability of supply and access to market. The question is, "how?'
One approach presented in “A Green Supply Chain Takes a Systems Thinking Approach – And Patience” suggests that by viewing the supply chain in a systematic or holistic manner, "organizations can apply that “big-picture thinking” needed to be truly innovative. Doing so can create leverage points that companies never realized they had before with their suppliers." Applying systems thinking through implementation, best practices include:
- Supply Chain Alignment - Evaluating business needs, market conditions, and sustainability value drivers (research / benchmarking) to improve supplier relationships or initiate sourcing.
- Procurement Guidelines and Policies - Improving sustainable material selection and supplier manufacturing processes as part of supplier selection criteria.
- Supply Performance Tracking - Establishing key supplier performance metrics to ensure continuous alignment with sustainability targets.
- Supply Chain Efficiency - Reducing inventory levels on non-critical supply resulting in lower carrying cost, waste and material obsolescence across the entire supply chain.
- Sustainable Logistics and Distribution – Refining transportation modes to make significant environmental and social impact reductions.
By adopting a systems thinking approach combined with supply chain best practices, companies can proactively address supply stability and quality issues from a different perspective.