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Greening The Supply Chain: Benchmarking Sustainability Practices And Trends
Greentech Media, Inc., Oct 2009, Pages: 70
Unlike the environmental movement a generation ago, sustainability today carries a strong connotation of win-win benefits, efficiency, high performance, long-term thinking and “getting it.” Despite the current recession, leading corporations across all industry sectors are increasingly making sustainability an integral element of their strategy, from product development to manufacturing and the supply chain to marketing and communications. For many companies, sustainability is expanding to supply chain sustainability.
A survey of 74 supply chain executives was conducted to build a quantitative picture of current sustainable supply chain practices and plans. We found that despite its growing prominence, sustainability is not a core part of most companies’ strategies today. And it is not a prime driver of their supply chain agendas. Sustainability lies in the middle of the pack of supply chain priorities today, behind cost cutting.
Key findings from the survey include:
- Three-quarters of respondents believe that their company’s environmental stance will have a material impact on customer relationships within the next three years, though just over a third of them feel the issue is material with customers today.
- The quest for energy effi ciency is more popular than any other sustainable supply chain activity this year.
- Some 70 percent of respondents said they had already implemented a commitment to recyclable and upgradable product design.
- Fewer than half of the respondents are using effi cient, low-emission vehicles, are working with transportation providers that do, or are tracking the environmental impacts of transporting their products. Many companies have plans to invest here in the next one to two years.
- Many companies have not yet integrated the systems that manage their environmental information with those that manage their supply chain activities, presenting a hurdle for those companies seeking to make environmental concerns a factor in supply chain design and operations.
- A minority participate in third-party sustainability reporting initiatives such as the Carbon Disclosure Project. But 80 percent of respondents say they will be reporting in the next 12 to 24 months.
- Companies cite a lack of a defensible fi nancial rationale and a challenge sorting out confl icting priorities as the biggest barriers to greater sustainability in the supply chain.
- Nonetheless, a signifi cant majority of companies believe that greening their supply chains will pay off over time, in some combination of brand enhancement, effi ciency gains and cost savings.
- Overall, supply chain spending plans remain fairly fi rm this year. A majority of the respondents to our survey said that their 2009 supply chain spending will increase versus 2008 spending levels, by an average of 11 percent. In aggregate, respondents are increasing spending by 3.8 percent.
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