The FINANCIAL — A new report from the World Economic Forum, written in collaboration with Accenture, identifies 31 proven practices to help companies achieve a “triple supply chain advantage” of increased revenue, a reduction in supply chain cost and added brand value.
The practices also help companies shrink their carbon footprint and contribute to local development, including the health, welfare and working conditions of the communities in which they operate.
The report, Beyond Supply Chains – Empowering Value Chains, reveals that companies included in the analysis have improved their competiveness through increases in revenue (five to 20 percent), a reduction in supply chain costs (nine to 16 percent) and a boost in brand value (15 to 30 percent). Their operational risks were also reduced. Additionally, the practices, which span product design, sourcing, production and distribution throughout the product lifecycle, can help companies shrink their carbon footprints by 13 to 22 percent.
The report outlines 31 practices that can help companies realize the “triple supply chain advantages” that were identified through interviews with 25 corporations, including Nestlé, SAB Miller and UPS — non-government organizations and other sustainability experts.
“We are committed to accelerating growth and social development in our value chain. We have hundreds of thousands of customers and suppliers that are small-scale businesses at the heart of their communities. But they often face barriers to survival and growth, like a lack of access to financing and business advice,” said Anna Swaithes, head of Water and Food Security Policy at SABMiller. “Supporting them to prosper is a key part of our business strategy.”
“Sustainability must become a higher priority in supply chain management, given the scarcity of natural resources, rising commodity prices and greater consumer expectations for responsible sourcing and production. Those who act now and capture the market opportunity of more sustainable supply chains can differentiate themselves and generate higher margins,” said Mark Pearson, senior managing director, Accenture Strategy. “This is not about trade-offs; it is about behaving in a socially responsible way that can also deliver a competitive edge.”
“Part of the difficulty to date has been the decision-making process itself as it relates to sustainability,” said Wolfgang Lehmacher, head of Supply Chain and Transport, Mobility Industries, World Economic Forum. “Our hope is that this report will empower companies to act now and place an emphasis on the maintenance and creation of responsible supply chains.”
In addition to outlining practices that others have successfully used, the report offers guidelines executives can apply to evaluate the value-creation potential of their organizations’ supply chain practices and prioritize sustainability investments. It also provides guidance for businesses to commit to engaging in practices of ethical commerce.
Discussion about this post