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Supply Chain Lacks Tools to Measure Sustainability

With the development of emissions regulations and company carbon footprint goals, commercial pursuits are tilting towards sustainability -- or are they? A new study by Business Performance Management Forum and E2open has found that while businesses understand the need for sustainable supply chain management, the necessary changes have yet to be made.

While respondents were positive, professionals are having difficultly without metrics or any available measure of sustainable achievement to create structured goals towards neutrality. Only 38 percent of respondents strongly linked environmental initiatives to operational efficiency, however an overwhelming majority were actively involved in new efficiency programs.

With the automation of the supply chain facing challenges on the global scale, the BPM Forum conducted a study in mid-2009 with 125 professionals worldwide, 35 percent of which had more than 1,000 trading partners to manage in their value chain. 80 percent of companies also were found to recognize the value in standardized environmental scoring, though two-thirds still did not currently use metrics or scorecards for tracking sustainable supplier and vendor efforts.

The report suggested the advantages provided by a centralized eHub, a benefit that only 20 percent of respondents utilized. Some of the companies cited as using an integrated global control platform successfully were Cisco, Dell, Seagate and Xerox.

The Acceleration of ECO-Operation is a "management mantra" aimed at creating verifiable sustainable changes in the value chain. The Business Performance Management Forum is looking towards a Greenscape Score, which calls for sustainable transparency and verification from all suppliers, regardless of size.

60 percent of companies have "none, very low or marginal visibility" across all supply levels and tiers as well as the value chain. "The lack of transparency into the operations of dynamic, multi-tiered supply chains may be severely hampering business performance," the report authors advised.

ECO-Operation practices are already in action, as more than half said that green or ECO-Operation practices provided a competitive advantage. However, companies have received little in the way of customer demands for carbon footprint transparency.

The faculty board perspectives, included at the end of the report, emphasized green efforts as necessary in the competitive marketplace. Wal-Mart received multiple mentions due to its recent pursuit of supplier greenhouse-gas disclosures.

Efforts by the financial industry -- in a time where poor economic conditions are forcing companies to consider innovative improvements -- recently became noted, as even more industries create carbon goals. Recently, a mutual fund pioneered the first release of a carbon investment portfolio footprint, finding that it was two-thirds less than the S&P500.

The report can be found here.

Comments By Readers

Interesting article. There's a company out of Michigan that helps companies in managing their carbon options. It's called www.viabilityonline.com

James on August 28, 2009 at 11:38 AM

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