Chains, levers and webs: supply chain sustainability’s strange mix

GEMI appreciated Scott Nadler sharing his insights on supply chain sustainability strategy at our supply chain sustainability workshop in June of last year, and wanted to share the following blog detailing Scott’s thoughts on this important subject. This article originally appeared on Nadler Strategy LLC.


I was drafted into the corporate environmental world.

One January morning over 25 years ago, I was called up to the executive floor at the railroad where I worked. The Chairman had realized we were 5 years behind our competitors and 10 years behind our customers and that we needed a corporate environmental program. I was it. I was pulled from my roles in marketing, development and real estate to create and run the corporate environmental program.  The Board of Directors was meeting in an hour to confirm my appointment. The only guidance I got was: “Go figure out what you do.”

Ruthlessly, I went out to track down industry leaders (especially from our big customers) and squeeze every bit of insight I could from them. At the time, those leaders were all involved with GEMI. I glommed onto them.

After their GEMI meetings, my new mentors often gathered at the bar to commiserate. They complained about regulators who told them what to do and what not to do, without understanding their business. They went off on NGOs who demanded lots of information without knowing what they would do with that information.

Once I timidly asked these wise men and women how they dealt with suppliers (especially since I was one). They all boasted of their supplier management programs: “We tell our suppliers clearly what they can and can’t do, and we demand a lot of information.”  They didn’t seem to appreciate the irony.

Fast-forward 25 years and a lot has changed – but maybe not enough. Companies like Nike, Walmart and P&G, and industries like electronics and apparel, have put in place major supplier programs that no one dreamed of back then. Emerging platforms like the US BCSD’s Materials Marketplace create innovative new customer-supplier relationships. [Disclosure: I serve as Program Director for US BCSD.] But then I participated in two meetings last year that plunged me deeply back into the world of supply chain sustainability.  Between GEMI’s Supply Chain Sustainability Workshop and US BCSD’s “Expanding the Circle” meeting with Ohio State University, I talked with dozens of companies and trade associations about this.

Concerned with what I saw, I checked in with a colleague who brings a very different perspective. His firm, Ibis Consulting, is based in Africa. [Disclosure: I am a Non-Executive Director at Ibis.]  He works with companies at the other end of the supply chain, as well as firms who have their own supply chains to worry about.

We agreed that there are three competing supply chain sustainability approaches now which can be summarized as:

  • Chains, not much different than 25 years ago, that limit action and impose a burden to be carried by suppliers;
  • Levers which are still linear but open the potential for two-way collaboration; and
  • Webs that recognize and utilize the non-linear nature of many commercial relationships.

We published our thoughts last week.  That article includes a quick test you can take to see if your program is made up of chains, levers or webs – if you’re brave enough.

[Opinions in this blog are solely those of Scott Nadler and do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in the post. To share this blog, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]

Developing Common Principles for Supply Chain Sustainability

We have heard from many corporate sustainability leaders regarding the challenges they face in efficiently managing a wide variety of different expectations for addressing supply chain sustainability.

Many are seeking ways to better understand the sustainability performance of companies within their supply chain while responding to similar requests from their own customers.

While the overall objectives of such efforts are often similar, their format, content and value are typically quite different.

Earlier this year, we worked with the Global Environmental Management Initiative (GEMI)’s Supply Chain Sustainability Work Group to evaluate different supply chain sustainability principles established by various industry organizations (including industries such as aerospace, apparel, chemical, consumer goods, electronic, pharmaceutical, plastics and utility) and third-party organizations (such as CDP, Ecodesk, EcoVadis, Manufacture 2030, Sedex, Sustainable Purchasing Leadership Council, The Sustainability Consortium and others).

GEMI’s goal in this work was to develop a simple framework that companies and industry stakeholder groups can use to guide the process for engaging suppliers regarding sustainability, advance strategic collaborations and promote increased alignment across industry-focused supply chain sustainability initiatives.

GEMI workshop (2017)

To better understand which principles for evaluating supplier sustainability performance may be most relevant across industries, GEMI convened a workshop this past summer and facilitated engagement with a variety of companies, industry associations, and 3rd party providers. Through that workshop and various follow-up discussions, we began to identify a core set of common elements that business leaders across industries reported to be essential when engaging their suppliers on sustainability.

We’re excited to now share the following GEMI Responsible Supply Chain Guiding Principles which are a direct result of those conversations. We continue to see a proliferation of new and different expectations for supplier sustainability performance, and believe there is an opportunity to promote further coordination across efforts while enhancing focus on tangible results that drive long-term business value. Our hope is that these Guiding Principles will provide a useful framework for GEMI members and other organizations in furthering such efforts.

We’re looking forward to working with GEMI on the next phase of this work in 2018, and welcome your thoughts and ideas on the following Responsible Supply Chain Guiding Principles.

GEMI Responsible Supply Chain Guiding Principles

Accountability: The buyer/supplier relationship is a partnership and should be built on shared responsibility and commitment to exemplary/good practices.

Collaboration: Engagement with suppliers should focus on actionable outcomes, and be viewed as an opportunity to drive innovation and continuously improve the sustainability performance of both buyers and suppliers.

Commitment to Shared Value: It is important to clearly define the strategic purpose for engaging suppliers, while being mindful of culture and maturity, and seeking opportunities for mutual value creation throughout the process.

Inform Decision-Making: Information gathered through buyer/supplier engagements should inform business decision-making, and be utilized to reduce risk, differentiate, innovate and add value for all involved stakeholders.

Relevance: Customers and suppliers should identify those aspects of sustainability performance most relevant to both the buyer’s internal goals and objectives, and those most applicable to the supplier given its sector, size and location.

Scalability: For solutions to be scalable across global supply chains, it is important that they be aligned with existing systems/standards, and provide a usable framework that promotes sustainable outcomes. Opportunities to reduce duplication and increase shared value through mutual recognition of assessments and/or audits should be considered whenever possible.

Transparency: Buyer/Supplier relationships should be built on trust and require clear communication and education on sustainability expectations, including expectations around traceability of data, while maintaining confidential and proprietary business information


View this post from GEMI Program Manager Kellen Mahoney on LinkedIn.

2018 Project Invitation – Supply Chain Sustainability Work Group

Working to drive the next evolution in buyer/supplier engagement on sustainability by identifying and promoting leading industry-driven supplier engagement approaches that are built on shared responsibility, focused on actionable outcomes and aligned with global systems/standards.

CHALLENGE
Corporate sustainability leaders face challenges related to the wide variety of expectations for assessing supply chain sustainability. Many are seeking ways to better understand the sustainability performance of companies within their supply chain while responding to similar requests from their own customers. While the objectives of such efforts are often similar, their approaches are typically quite different. GEMI believes there is strong potential to enhance coordination across efforts and further home in on data that drives action while increasing value for both buyers and suppliers.

GEMI SCS MISSION
To address these concerns, GEMI has worked to build a cross-industry coalition of leading companies and industry trade associations to promote increased alignment across industry-focused supply chain sustainability initiatives while advancing strategic collaborations that drive innovation and continuous improvement in the sustainability performance of both buyers and suppliers. The Work Group leads a variety of internal research and external communication and education activities to advance its vision.

GEMI SCS Workshop (2017)

GEMI SCS WORK GROUP – 2018 OBJECTIVES

  • Increase awareness of existing industry-focused SCS solutions, and promote activities in support of those issues identified in GEMI Responsible Supply Chain Guiding Principles.
    • Deliverable: Develop GEMI Q&A Profiles on Industry Approaches to SCS. Publish bi-monthly blog feature interviewing project members and/or other organizations nominated by members, that will be shared on GEMI website and social media.
  • Enhance communication between buyers and suppliers to improve understanding of buyers’ sustainability expectations (why / how supplier data used) and awareness of suppliers’ experiences.
    • Deliverable: Organize an SCS Workshop on April 11-12 in Houston. Facilitate discussion with key buyers regarding their supplier sustainability expectations as well as supplier pain points. Develop executive summary highlighting insights and opportunities shared through workshop.
    • Deliverable: Develop GEMI Quick Guide on Strategic Buyer / Supplier Collaboration. The GEMI Responsible Supply Chain Guiding Principles may serve as a framework for the document. The document will highlight best practices and strategies to promote strategic buyer/supplier collaboration and innovation, and include company case studies examining successful programs.
  • Promote dialogue with SCS data collectors (3rd party providers / industry-specific coalitions) on opportunities to streamline data collection, promote mutual recognition, and enhance focus on value-driven outcomes.
    • Deliverable: Organize an SCS Workshop in Fall 2018 to continue discussion with key buyers on sustainability expectations, while also engaging 3rd party data collectors regarding opportunities to streamline and enhance value of data collection efforts. Develop executive summary highlighting insights and opportunities shared through workshop.
    • Deliverable: Develop and publish 2-3 case studies examining why and how data in selected harmonization efforts is used for business-decision making, and highlighting opportunities to enhance coordination across efforts.

VALUE
GEMI offers a unique platform for companies and industry trade associations to engage with corporate leaders, fellow industry groups, NGOs and 3rd party providers on industry-focused supply chain sustainability issues, and promote increased alignment across initiatives. We welcome representatives of companies and industry trade associations to join GEMI’s efforts in 2018.

Please contact us if you would like to learn more about participation in GEMI’s SCS Work Group, including 2018 participation fees and expected deliverables.

Interested in Participating?

Complete the short form below to receive more information on participation

Project Invitation – External Future Forces That Will ‘Disrupt’ the Business of Sustainability

What four or five external future forces are most likely to ‘disrupt’ the business of sustainability for companies, the industry, and society at large—thinking ten years ahead? 

In 2007, Institute for the Future created a 10-year custom forecast for GEMI focused on external future forces likely to disrupt sustainability. The forecast was quite accurate and it gave GEMI project members unusual foresight that contributed to their business strategy. Now, we are looking ten years ahead again at a very different future in a very different world. In this world, it is too late to have just a sustainability strategy. Now, companies must have a strategy that melds sustainability and business.  Click here to review the 2018 project proposal.

GEMI/IFTF 2007-2017 Sustainability Map

Opportunity
GEMI is seeking a preliminary indication of interest from organizations wishing to participate in and contribute to a new custom forecast that will point a ten-year lens on external future forces—including both threats and opportunities—that will disrupt sustainability, with a focus on business choices and business strategy.

The goal of the project is to use foresight to awaken, engage, and drive change in the present. Urgent future disruptions are looming and this project will provide the grounding to engage with and win through the most important external future forces.

This project will focus on this research question: Over the next ten years, what four or five external future forces are most likely to disrupt the business of sustainability for companies, the industry, and society at large?

We will focus in particular on the links to digital transformation and the impacts on the business of sustainability. This new forecast will help leaders glimpse and understand the future disruptions in the environment within which they will be required to win. It will help companies heighten their game, and it will give a rigorous, provocative futures perspective to inform business strategy.

Cost
GEMI’s goal is to raise funding for this project from a range of companies / organizations, all of whom are interested in successfully navigating the major future forces that will affect the business of sustainability over the next decade. This cost-shared model allows project partners to receive the map and presentation at a much lower cost than commissioning this foresight individually. Active GEMI member companies will be invited to participate at no additional cost.

The fee per partner company is $15,000 USD and GEMI’s goal is to secure commitments from a minimum of 10 organizations. If GEMI is successful in securing a minimum of $150,000 in funding commitments from interested organizations, the project will be kicked off in 2018. If there is not a sufficient response to GEMI’s project solicitation, GEMI and IFTF will work to be prepared to execute the project in 2019.

Deliverable
IFTF will develop a new custom forecast map for project partners in pdf form to allow partners to focus strategic conversations on the four or five most important external future forces. The 2007 map was a very accurate forecast, but as the speed of business has increased, maps like this are just too busy to engage many top executives. This map will be just as content rich, but more clear and actionable.

In addition to the map, IFTF will create an annotated PowerPoint presentation that summarizes the forecast in a form that can be used easily by the sponsor companies, even when IFTF is not present.

IFTF will offer presentations of the forecast at sponsor location at a cost depending on which staff members are involved in that presentation. The new custom forecast map will be available to project partners first, but then will be public after an agreed upon period.

Timeline
The target kick off for this research project is March 25, 2018, with the final map and presentation delivered six months thereafter.

Action
If you would be interested in learning more about how you can participate in and contribute to this project, please click here to express your interest . Please contact us with any questions.

Interested in Participating?

Complete the short form to receive more information on participation