Sustainable Supply Chain: Ensuring Business Continuity 

These days, practically every Fortune-listed company has some level of formalized sustainability agenda and actively shares these goals publicly. But for the most part, sustainability is seen as a "feel-good" cause aimed primarily at the company’s socially-conscious customers, or for watchful third-party institutes and NGOs. Only recently, sustainability measures have been looked at through a more strategic lens, as measures that can give companies a competitive edge among the growing dearth of natural resources.

In a recent HBR Blog Cast, Jib Ellison, coauthor of The Sustainable Economy, mentioned the total evaluation of all available natural resources (oil, forests, water, land…) on our planet is evaluated at approximately $44 trillion. Putting this kind of value on natural resources shifts the perspective of any supply chain manager and forces them to look at their supply chain from a new angle and ascertain that the supply chain of the company is managed with a sustainable perspective.

Companies that rely heavily on rare earth materials (like those involved in manufacturing high-end electronics, energy-efficient lighting and hybrid batteries) need to have insight into their supply chain to safeguard against any potential disruptions. Mining and chemical manufacturing companies, which rely on heavy use of water, are now scrutinized for their management and reporting of their "water footprints." Companies that are not actively tracking and managing their supply chain from a "cradle-to-cradle" perspective are increasingly seen as industry laggards and rated as more prone to financial risks. These ratings and indexes have a negative effect on a company’s equity.

Properly managing and reporting your company’s sustainable agenda can have a multitude of positives effects and directly impact a firm’s bottom line. In fact, steps to reduce a company’s carbon footprint start with optimizing a company’s supply chain. Methods such a network optimization, better DC and warehouse management, packaging and transportation optimization have all been seen to positively affect a company’s carbon footprint and incur cost reductions in the process.  Reporting of such efforts through independent organizations such as CDP or CERES, portrays a company’s strategic awareness about its operations ecosystem and recognizes continued efforts to ensure positive shareholder value.

With the ever-growing delta between demands / supply of resources and changing stakeholder expectations, it’s becoming increasingly important for companies to increase their sustainability involvement, not from a "feel-good" perspective, but from a business-continuity perspective.

CGN has continuously helped clients forge strategic visions in terms of end-to-end supply chain readiness. Our global experience, in supply chain optimization, supplier assessment and reporting has helped clients transform their business with sustained returns.

-Saum Sharma, Manager