By Cheryl Scandale-Murnin, LEED AP
Think for a moment about how much material, information and money moves through the average supply chain between the initial source and the end user. Let’s also think about how many individuals or organizations handle the same product or service as it travels from one end of the chain to the other. Supply chains of even the smallest companies have a global footprint, and the impact it can have when it makes the commitment to applying sustainability to its supply chain can be significant. It reduces redundancies, streamlines the process, and increases end-to-end transparency, breaking down organizational silos. It is smart business.
Sustainability and green design is synonymous with high performance buildings in the built environment, but what exactly is a sustainable, high performance business supply chain? Li & Fung, Limited, a global supply chain management company suggests that a one-day improvement in their supply chain velocity nets as much as $60 million in their pocket. That’s high performance.
The average company can do much to increase its own performance but the commitment to do so must be at the most senior level of policy and decision makers. Some companies may find this evolution disruptive, but if companies do not evolve or disrupt themselves, they will be disrupted by the competition. Some companies hesitate to stay current because of the expense, but the competition is staying current buy using business intelligence and artificial intelligence tools, and will leverage that hesitation to gain a competitive advantage.
First and foremost, establish a corporate sustainability program. Research other companies. Every publically owned company has a great one on their website. Conduct an in-house assessment to identify where the company is on its sustainability journey. This is usually when a business grows up beyond the excitement felt by changing out old light bulbs for high efficiency ones. Next, develop realistic supply chain goals for the next one to five years and be sure these goals are aligned around the business’ core strategies. Any disconnect at this point in the process will ensure disaster. Focus on something attainable such as waste reduction by the business and all its venders, or increased cost savings per quarter, or reduced energy consumption by the business and all vendors. Perhaps improve fleet efficiency by a set percentage, or support human rights issues by avoiding sweat shops in emerging markets as a source for final products or raw materials. Communicate among all stakeholders, i.e., staff, vendors, investors, etc., the intention of your new policy and implement it fully; gain their buy-in. Review your progress in a well-defined way and pre-scheduled time table. It is only through complete implementation and review that problems and successes can be identified, and refinements deployed.
Lastly, make your supply chain tamper proof and encrypted. Invest in a data analytics-driven, automated supply chain tool that is smarter than your smart phone. Artificial intelligence has become commonplace in the robotic manufacturing process; it is finding its way into health care and has a strong foothold in supply chain management tools because of the volume and velocity of information, communication and currency that travels in both directions end-to-end. Increased visibility, the elimination of frictions between participants and traceability are pivotal in the tracking of sustainable characteristics and mid-chain policies. It allows data collection to effect decisions in real time and so cyber security is a very important consideration in the reduction of delays and fraud.
Businesses, in order to be truly sustainable, must innovate or become irrelevant. The traditional supply chain that buries vital information in silos, that does not consider the emissions and financial impact of redundant handling or transportation, or that places data as an obstacle rather that an intuitive decision-making tool, looks for yesterday’s answers. Positive environmental impacts, increased efficiency, increased profit and increased end-to-end visibility, on the other hand, are all components that help to find tomorrow’s business answers.
Cheryl Scandale-Murnin, LEED AP, is an adjunct faculty member in the School of Business and Global Innovation at Marywood University. As a LEED AP, she is an Accredited Professional in Leadership in Energy and Environmental Design, demonstrating a high level of professional expertise in issues of sustainability. She served both as a former V.P. of the Greater Scranton Chamber of Commerce and member of the Small Business Advisory Board of the Greater Philadelphia Chamber of Commerce.