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Corporate perception of supply chain sustainability is changing as the benefits of transformation become both clearer and more achievable.
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As part of an ongoing study into the impact of sustainability on the C-suite, this paper looks at how sustainability is changing the chief supply chain officer’s strategy. We identify lessons for chief supply chain officers to consider as they ponder their roles in driving high performance.
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Over the past five years, the corporate view of supply chain sustainability has undergone something of a transformation. It has now begun to be considered a business imperative.
This transformation is being driven by a change in perception. There is a growing understanding that a focus on sustainability can bring wide-ranging benefits, such as innovation, efficiencies, better risk management, improved brand value and even new revenue-generation initiatives. While many supply chains are complex and a number of the necessary technologies are still maturing, it is clear that leading companies are already taking the first steps toward making far-reaching changes in their supply chains.
This report is one result of a year-long program of research on the sustainable organization, which seeks to open up a debate about the role of each major C-suite or executive function and the contribution they need to make to the implementation of sustainability. Each report draws on wide-ranging Accenture data and research, including collaboration with partner organizations including the United Nations Global Compact, World Economic Forum and Carbon Disclosure Project.
In consultation with Accenture’s overall leadership, as well as its Sustainability group, the reports profile the specific trends and insights that are affecting each role. To provide specific examples and current context, this report also draws on interviews with a number of supply chain executives and experts.
Across many businesses, bottom-line gains from supply chain sustainability initiatives are giving greater prominence to the role of the chief supply chain officer. As the role is becoming increasingly strategic, it is becoming progressively important to have a greater understanding of consumer needs and expectations, a vision about the economic outlook and the introduction of sustainability into all aspects of the function’s role.
As more supply chain leaders move their thinking away from simply ensuring compliance and toward better performance, other considerations come into focus. One broad issue relates to a far wider view of product stewardship—ensuring a lower environmental and social impact of products, considering how to turn obsolete and discarded products into a valuable raw material and ultimately turning a typically one-way flow of products into a circular loop. The overall aim here is to unpick, rethink and transform the entire product lifecycle, in the pursuit of simplicity and efficiency.
Done properly, this can enhance brand equity and market position. On the flip side, a failure to do so may one day threaten the company, given rising pressures on resource scarcity.
Another key trend being driven both by regulation and consumers is the need for greater transparency across the supply chain. Delivering this transparency represents a huge challenge, and many companies are switching to more sophisticated technologies. This, in turn, is requiring both new skills and external training.
Based on its research and interviews with leading supply chain executives, Accenture has identified several lessons for chief supply chain officers:
Integrate sustainability issues into both supply chain planning and operations.
Set a champion for supply chain sustainability at the board level.
Look to create an appropriate governance framework that can help guide implementation across the business, including decentralized branches of the supply chain.
Set out a supply chain charter to generate the greatest buy-in from the group you are trying to lead.
Setting meaningful, public goals can be a useful way to change mindsets within the supply chain.
Collaborate with the rest of the business, plus all other members of the supply chain.
Detail all the changes required within your plans and operational guidance.
Put clear numbers on your key raw materials and other critical inputs.
Look for opportunities to encourage suppliers to innovate, rather than simply penalizing them for failing to hit certain metrics.
Push the supply chain team to answer fundamental questions, such as: are there supply pressures on our materials?
Explore new opportunities for cradle-to-cradle or closed-loop supply chain systems.
Educate yourself and your team about what sustainability issues are most pertinent within your sector’s supply chain.
Ensure that the goals of your company’s internal sustainability strategy and external supply chain strategy are well aligned.
Acknowledge that different types of suppliers will have different risk profiles.
Closely review the resources needed to effectively manage a sustainable supply chain, including new skills, technologies and other resources.
September 6, 2012
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