Sustainable supply chain: From compliance to strategic management

supply chain
July 16th, 2019
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Most company risks and opportunities lie at the heart of their supply chain. At present, adopting a sustainable approach to supply chain management is a key lever that enables companies to reduce risks, identify new ways to make savings and boost innovation.

Drawing on its expertise, BSR[1] highlights supply chain sustainability through two topics:

The evolution of supply chain sustainability

The notion of supply chain sustainability emerged in the 1990s in the form of a compliance-based approach that involved creating supplier codes of conduct and conducting audits for compliance.

In the 2000s, the supply chain began to play a strategic role within the company and sustainable supply chain management started to become applicable to all stakeholders. From then on, suppliers fully integrated this criterion into their strategy and engaged with their customers. A new dynamic took over, superseding the focus on ensuring compliance.

Company supply chains have seen a real transformation in the last few years. This transformation is largely due to technological advances that offered excellent prospects: the visibility, monitoring, collection and analysis of data.

Today, CSR (Corporate Social Responsibility) is increasingly integrated into the company strategy, and is therefore also a key consideration for the supply chain.

The four-level maturity model for supply chain sustainability

Using its "Supply Chain Leadership Ladder" methodology, BSR assesses the maturity of companies in terms of supply chain sustainability. It defines four levels of maturity based on the actions implemented by companies:

  1. Building awareness
    Developing internal management systems to implement a sustainable approach within the supply chain.

  2. Assuring compliance
    Focusing on risk mitigation by ensuring supplier compliance and defining a strategy that promotes supply chain sustainability.

  3. Managing priorities
    Moving the emphasis from risk mitigation to the identification of opportunities by defining the strategic priorities for the supply chain.

  4. Driving impact
    Fully integrating supply chain management into the company's strategy and CSR directives. This involves addressing the root causes of issues and building a strong collaboration between the different stakeholders.

BSR believes that, currently, most organisations are at level 2 — at the level of assuring compliance.

Various steps can be taken to reach the next level, such as:

  • Defining necessary internal roles and responsibilities
  • Increasing stakeholder involvement both internally and externally
  • Categorising expenses

 

[1]BSR (Business for Social Responsibility) is a global network of companies and experts dedicated to sustainable development.

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