Accenture released results of a research study focused on sustainability and supply chain strategy. This survey concludes that leading-edge companies recognize not only recognize the business imperative of incorporating sustainability activities in both product and supply chain practices, but make extra strides in linking the objectives of sustainability with cost effectiveness, customer service, and other objectives. The emphasis of the designated leading-edge companies is focused on pragmatic strategies vs. those that are unproven or bring higher risk.
This survey polled 245 cross-industry logistics, warehousing and transportation executives to identify the fulfillment capabilities that were most highly correlated with superior performance in both customer service and cost responsiveness. A number of questions surveyed supply chain sustainability and carbon footprint management. This study segmented the companies surveyed into three categories: masters, average performers and laggards. Masters were those organizations who achieved top-quartile performance on both cost effectiveness and customer service.
The study conclusions indicate that masters are:
- Designing products with sustainability in mind
- Actively managing their supply chain carbon footprint
- Choosing processes and systems that offer the best return
- Benefitting from an integrated view of sustainability across the supply chain
Masters are also twice as likely to model and actively manage their carbon footprint across all areas of their businesses. In addition to overall reduction in energy consumption, other pragmatic mitigation strategies cited by masters include introduction of energy-efficient lighting, material recycling, and proactive preventative maintenance.
Yet, this Accenture survey reveals that among the overall surveyed population, 37 percent of supply chain executives have no awareness of the level of supply chain emissions in their supply chain network, and only one in ten companies actively manage their supply chain carbon footprint. Obviously, there is a need for progress.
In a Supply Chain Matters posting in April of last year, I noted that green supply chain strategy makes sense from an overall business perspective, but data indicated that the vast majority of companies were in early stages of strategy development. European based companies had more momentum because of the financial and legislative environmental policies directed at carbon and waste reduction. This latest Accenture study seems to reinforce these observations.
Implementing an end-to-end green supply chain is an immensely complex problem and will require multi-year initiatives as well as technology-enabled analytical analysis and tracking tools. But that is no excuse to not to get started. The Obama administration is now strongly hinting that the U.S. needs to adopt stronger sustainability policies, including a potential carbon cap and trade policy similar to other countries.
Leading-edge companies are establishing their sustainability strategies, and are making progress with integrated and complimentary pragmatic approaches, even in the midst of severe economic recession. If as Accenture indicates, only one in ten companies actually take the time to measure their supply chain carbon footprint, than that would imply that that should be a first step in your own company’s supply chain sustainability strategy.
Do you agree? What about your company’s strategies in this area?