Collaboration is Key for Supply Chain Sustainability
by George W. Prest, Chief Executive Officer, MHI
Environmental and social risk management are among the greatest challenges facing companies today. Some have gone so far as to call it the topic of 2013, and it is the focus of the latest issue of MHI Solutions.
A focus on cost without an appreciation for environmental impact, resource availability and social factors expose supply chains and brands to increased risk. Events like the recent fire and building collapse in Bangladesh are impacting reputations of major brands and retailers two and three tiers into the supply chain.
To stay competitive, supply chains are being redesigned for maximum sustainability, efficiency and reduced risk. This means a fundamental and complex supply chain transformation for many organizations and embedding sustainability into core business activities.
What we see emerging is a new era for industry collaboration, which will become an important factor for future success. Collaboration can create cost savings, spark innovation and create win-win opportunities along supply chains and is essential to create sustainable supply chains.
Best-in-class supply chains and major brands have made measuring green efforts one of their top priorities. And they’re seeing significant positive environmental and bottom line impacts.
Last year, Nike implemented a new manufacturing scorecard that placed sustainable practices on equal footing with conventional metrics such as costs, quality and delivery.
Nike also works with suppliers to engage and empower their employees to know and believe they have the best insight on how to optimize efficiency within factories.
In February, Walmart posted a blog to their Green Room stating that a sustainable supply chain is their first priority. Ford Motor Co. was one of the first multinational companies to declare human rights to be a central component within its supply chain code of conduct.
General Motors was the first automaker among 40 U.S. corporations to sign a new climate declaration, asserting that responding to climate change is good business.
And just a few weeks ago Procter & Gamble announced that 48 of their manufacturing sites already have achieved a zero waste profile, meaning nothing leaves the plant as waste. These green initiatives have saved about $1 billion a year, according to Bob McDonald, CEO of Procter & Gamble.
Establishing effective systems for measuring and sharing sustainability performance across supply chains is a prerequisite for improving performance and mitigating risk.
Bottom line, sustainability is good business—and that’s what the latest issue of MHI Solutions is about.
Click here to view the digital issue of MHI Solutions.
