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July 18, 2009

Study Reveals Companies Lack Supply Chain Sustainability

Nearly two-thirds of supply chain and operations professionals say they have marginal or no visibility across all tiers and levels of their value chain, although 90 percent say their management subscribes to enhanced trading partner visibility, flexibility and sustainability across the entire supply and demand chain, according to a new report from BPM Forum and E2open.

However, study results indicate that consumer awareness and increased regulation will put added demands on companies to drive green initiatives and efficiencies in the supply chain.

The report, Acceleration of ECO-Operation: Achieving Success & Sustainability in the Supply Chain, covers the priorities, progress and pitfalls that supply chain and finance executives are facing in product development environments. The report also provides perspectives from more than 20 corporate and faculty leadership committee members, which includes best practices for implementing environmental sustainability into their supply chains.

Key findings include the following:

• Seventy-eight percent of companies rate the level of synergy and accountability in their global trading network as suboptimal.
• The top benefits achieved through better ECO-Operation, or optimal visibility, programs include more environmental responsibility, better sustainability compliance, more efficient product manufacturing and better customer responsiveness.
• Lack of leadership, visibility and standardized sustainability metrics are holding companies back from achieving bottom line benefits.
• Forty-two percent of companies do not include supply chain partners as part of the carbon and energy footprint.
• Seventy-six percent said their customers have not yet asked them to reveal their carbon footprint, but two-thirds expect customers to demand this in the next year.
• More than half of respondents say that their competitors use green or ECO-Operation practices for competitive advantage.
• Eighty-five percent of respondents say they are actively involved in new programs that drive operational efficiency, corporate social responsibility and cost-savings across supply and demand chains.

Other findings indicate that sustainability is becoming an increasingly important consideration to supply chain management executives, although most companies are still struggling with obtaining verifiable, consistent data to measure value chain effectiveness and environmental responsibility.

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