Posted by: edwinrutten | November 25, 2010

Is sustainable SCM like opening Pandora’s box?

In Greek mythology, Pandora was the first woman to appear on stage. Her name meaning ‘all-gifted’, she was certainly gifted with a strong sense of curiosity. In the myth, spurred by curiosity, she opened a jar (not a box actually!), thereby releasing all the evils of mankind. Whereas some CEOs see their own supply chain as Pandora’s box, other (more gifted?) ones would like to open this black box and continuously improve company performance by learning from what they discover.

In the Accenture UN Global Compact CEO Study 2010,  ninety-six percent of CEOs, compared to just 72 percent in 2007, now believe  that environmental, social and governance issues should be fully integrated into the strategy and operations of a company. Also, these issues should be embedded into their global supply chain (88%). Although these are important and promising figures, embedding these issues in their global supply chain is showing the largest performance gap (difference between what companies should do and are doing). Now what is hampering these CEO’s most in meeting the execution challenge? According to the study, Rising concerns about complexity demonstrate how CEOs are shifting their sustainability focus from strategy setting to execution. Of particular issue for many of the CEOs we spoke to was the challenge of ensuring a consistent, companywide approach across large and increasingly complex supply chains as well as subsidiaries.”

Many of the CEOs interviewed, expressed concerns about whether they can effectively manage sustainability issues throughout such large, complex supplier networks. Maybe they are afraid that they might open a box of Pandora, finding unpleasant realities in their current business model and supply chain configuration…?

Well, as long as you’re not curious, you’ll never find out. But I’m convinced that it can be very rewarding to have a deep look into your supply chain wearing 3P-glasses. It will give you a head-start in the new competitive environment that is arising. According to these leading CEOs, this will be an environment with:

  • A broader sense of, and ability to measure, what value creation means to society as a whole, encompassing both positive and negative impacts.
  • New kinds of collaboration and partnerships with suppliers and distributors, civil society organizations and governments to drive sustainability outcomes.
  • More effective use of technology to drive transparency, resource efficiency and a transition to clean energy infrastructure.
  • New models of innovation that use an open approach to harness ideas and expertise from around the world, often at low cost and using collaborative technologies.
  • More effective business practices when operating in emerging markets to tackle different consumer and citizen needs and alternative distribution channels.
  • Sustainability leadership and culture that embeds sustainability issues into the way executives and employees think about strategy and execution.

Main question is: how to get there? The study identifies five enabling conditions (p.48) for integrated sustainability in general, but let me focus here on my suggestions for your supply chain:

  1. Draft your supply chain: map your product-, information- and financial flows. 
  2. Unravel it: identify the key variables in impact for Profit, People and Planet. 
  3. Simplify your findings (start with common sense) and envision what negative impacts on 3P can be avoided.
  4. Create measures to measure 3P value, helping to focus on things that make sense.
  5. Start understanding and improving your supply chain in an integrative and sustainable way.

Remember what finally came out of the box that Pandora opened? Hope.

Now let’s hope companies will be curious enough to open their black-box called supply chain. This will create hope in the first place, for a better profit and a more sustainable economy!


Responses

  1. Implementing all levels of common knowledge.

  2. Amazing !

  3. The Pandora’s Box illustration is copyright 2005 Howard David Johnson. Its used without permission from http://www.howarddavidjohnson.com My Pictures CAN be used like this if there is a credit. Post this reply and you have my blessing.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Categories

%d bloggers like this: