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If Sustainability Costs You More, You’re Doing it Wrong: The Do’s and Don’ts of Sustainable Value Chain Management
There is a lot of anecdotal information on what makes a sustainable value chain, but very little data, so we partnered with ASQ and ISM, with the help of Deloitte, earlier this year on a multi-year research study to identify proven management practices and cost-saving approaches, and the initial findings are out!
Since the supply chain is what separates “real” sustainability from “green washing” many businesses and NGOs are looking to this research to help them know the best ways to make their value chain (supply chain, distributors, partner organizations, etc.) more sustainable. While others have conducted research in this area, there are two unique aspects in this project that distinguish it from any other research available:
· Beyond focusing mainly on an organization’s suppliers, it encompasses the entire value chain from the moment something comes out of the ground and is put back into the ground, reused, or recycled, encompassing suppliers, distributors, partners, and the internal aspects of the value chain as well.
· Instead of looking at interest in sustainability and future plans, it looks at which concrete actions are most effective at increasing supply chain sustainability, where the outcomes will help direct organizations on where to put their time, energy, and resources to provide the greatest benefit.
The first phase of this research – a survey with almost 1,000 responses from corporate responsibility leaders and supply chain experts – identified ten management practices that can improve sustainable value chain effectiveness, measuring by just how much an organization saw an increase in this effectiveness:
· Organizations that engaged with suppliers at any tier saw a 38 percent increase in their sustainable value chain effectiveness
· Organizations that had sustainability embedded into their culture saw a 24 percent increase in sustainable value chain effectiveness
· Organizations that had worked with suppliers and others (such as distributors) as part of quality programs in the past experienced a 22 percent increase in effectiveness
· Organizations that engaged with or talked about sustainability with value chain members saw a 21 percent increase in sustainable value chain effectiveness
· Organizations that rewarded suppliers for sharing expertise and knowledge around sustainability recorded a 17 percent increase in effectiveness
The survey also identified five management practices that reduce operating costs:
· Organizations that engaged with suppliers at any tier saw a 46 percent reduction in operating costs
· Organizations that provided suppliers with monetary rewards for sharing expertise and knowledge around sustainability saw 45 percent reduction in operating costs
Click here to view the full set of findings!
One of the most astonishing finds is that the return on investment (ROI) for sustainable value chain initiatives is in the triple digits!
The next phases of the research involve interviews, case studies, and secondary research; let us know if you are interested in participating. And make plans to join us at the COMMIT!Forum taking place October 2-3 in New York City for a deep dive into the research results. Register by August 31st and receive 25% off your registration!