In this webinar, GEMI and IFTF share a new project proposal to develop a 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. Learn more about this project at gemi.org/newsletter/project-invitation-external-future-forces-will-disrupt-business-sustainability/
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.]
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.
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.
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.