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The Shifting Dynamics of Sustainable SCM

In an update to its 2008 study, the Accenture 2011 High Performance Finance Study, Delivering Value: The Next Battleground for the Finance Organization, the well-respected professional consulting firm introduces its research by describing a world in flux and set to experience even more change in the coming years. As the study describes, companies will have to rethink their focus on finance cost reduction and selectively invest in capabilities to respond to challenges, meet the expectations of their internal customers, and deliver greater value to the enterprise.

Moving forward into 2012, our sustainability consulting practice believes the next generation of ‘sustainable’ supply chain management will continue to evolve as we transition to economic stabilization. Focused on a new level of responsibility across all supply chain activities, we foresee continued efforts to drive deeper into category value by addressing more pointed supply questions:

• What is the source of our materials and manner in which it is obtained?

• What are the business practices and standards by which our supply partners conduct their business?

• What are the environmental and social impacts of our supplier’s operations?

• What are the environmental and social impacts of our supplier’s supply chain?

“Leading companies direct the bulk of their cost management resources toward long-term operational efficiency drivers, often tolerating a moderate amount of G&A drift across cycles. When reducing costs, how and where matters more than how much you can cut. Intelligent Growth companies link costs to revenue so that they can easily track their variation over time.” –Procurement Strategy Council

Over the last few years the essence of business sustainability for most organizations has been to “cut to the bone and hope to survive”. As we move towards better economic times, our sustainability consulting agrees with the above firms that there is a need for a transition in focus. We believe post economic recovery business improvement and sustainable supply chain management will drive for a broader exploration of business sustainability value.

Article by Julie Urlaub, Founder and Managing Partner at Taiga Company; appearing courtesy 3BL Media.