Posted by: Matthew Molinari | April 5, 2012

Join the Sustainable Supply Chain Conversation

Software Advice’s (click here) Michael Michael Koploy sent me a link to a recent post he did about how companies can start to move their supply chain towards sustainability. I think he has got some very interesting thoughts on the best way to implement greener techniques across a business while simultaneously ensuring that the bottom line stays green. Michael says there are 5 key questions we must all ask if we are going to move in this direction:

1) How can we better measure sustainability?

2) How can we instill sustainability into our suppliers?

3) How can we create more sustainable products?

4) How do we avoid socially negligent suppliers?

5) Who can we trust to drive sustainability?

     I think these are probably the most important questions to keep in mind when thinking about creating a sustainable business model. The focus of these questions is geared towards “green” sustainability but they can certainly be interpreted in terms of sustainable profitability as well.

     In many ways, I do believe that the answers to all of these questions stem from one main question: does your company believe in corporate social responsibility?  There is an ongoing argument about whether it is the responsibility of businesses to use stockholder money to help the community rather than reinvesting it back into the company to further increase profits. I think the answer is clearly yes and I believe that to be true because companies will actually make more money by being socially responsible.

     A recent post I read argued that sustainable supply chains must adhere to 4 principles and “they surround human rights, labor, environment, and corruption”. Many people see ideas like this and immediately point out that there is no mention of profit in these principles. However, these principles simply shape a way to make a profit in a more responsible way.

Take Cisco’s savings on packaging costs:

     There are so many examples just like this where the company can save millions in expenses while also creating a more sustainable supply chain. Cisco has reduced their impact on landfills by creating less packing waste while simultaneously reducing package weight and size so they can fit more boxes per truck load which cuts down on fuel costs. Sustainability is a win-win.

Overall, building a sustainable supply chain will take years and require a business to rethink their policies and search for suppliers who are willing to work within specific guidelines. However, I believe the only way to create a sustainable profit is to install a sustainable supply chain.

Leave me your comments.

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Responses

  1. Thanks for adding the conversation, Matt. I think Jim May’s comment on the 4 principles (“human rights, labor, environment, and corruption”) are directly inline with the other experts I spoke to for the article.

  2. Thanks for adding to the discussion, Matt. I think Jim May’s comments on the 4 principles (“human rights, labor, environment, and corruption”) are directly inline with the experts I spoke to for the article.


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