Savvy corporate managements recognize that the supply chain of their company represents a huge opportunity for cost savings, more efficient management of procurement, and the extension of important health & safety practices beyond their own operations. And, that addressing the inherent risk within their global supply network of partnering organizations (suppliers large and small) is a critical risk management consideration, taking the supply chain to the company board room (that is, the directors’ responsibility to oversee enterprise risk management approaches).
Compared to just 30 years ago or so, and the end of the Cold War, the network of suppliers (and their many locations) represents an astonishing change in corporate strategy, operations and management oversight for the average large-cap and mid-cap company. There are important drivers for these changes.First is the trend toward globalization of numerous elements of operations for virtually all businesses. Even a small retailer today can attract and service customers that are 7,000 miles distant, and the “store” can be totally on line. The second critical driver is the technology that makes this possible, with the foundation being the reach of the internet, and use of the World Wide Web. And the third major force for change over the past several decades is the global consumer thirst for ever-lower priced goods and greater competition within the retail space.
In that regard, we are truly entered into the Age of the Internet of Things. And so the focus of corporate management on the supply chain is of critical importance to business enterprises — from large-cap public companies all the way down the value chain to their smallest (independent) suppliers of goods and services.
Companies in developed nations — USA, Canada, Europe, and United Kingdom — have a plethora of compliance regulations to follow. Moving to less developed economies for their outsourcing, early on the suppliers in far off lands could have less safe and even unsafe operations. It was “out of sight.” No more! Stakeholders are looking more closely these days at the source of goods and considering the working conditions at those sourcing points. And so the growing emphasis on “supplier performance management models,” as described by Pierre-Francois Thaler, co-CEO of the EcoVadis organization, who shares importance perspectives in our Top Story this week.
EcoVadis provides “sustainability scorecard ratings” for major customers to evaluate their supply chain partners. (There are 21 CSR performance indicators, 150 commodities, 110 countries in the EcoVadis scoring system.) At G&A Institute, we assist our corporate clients in responding to the EcoVadis surveys – these are very comprehensive. There is important information for managers of all sizes of business organizations in the interview published by Supply Chain Digital.
Corporate sustainability leadership companies understand the importance of “effective supply chain management” to their top and bottom lines, the company brands and reputation, and the risk factors presented by global sourcing. An example is Johnson & Johnson, the giant healthcare products company (for “health, wellness and fitness”). Addressing supply chain management, the J&J web site notes: “Taking responsibility for the environmental and social impacts of our products begins with product design and development, and then extends to the sourcing, manufacturing and delivery of our products to our customers. For many years, we have been implementing and improving environmental and social measures in our own organization. As a natural progression, we are focusing on promoting sustainability throughout the supply chain.”
“By doing so, we can improve our own performance, as well as influence the performance of our supply chain partners. We look to partner with suppliers who are transparent about their sustainability programs, can assure us that they are sustainably producing the goods and/or services we are buying, and can verify the legal and regulatory compliance of their supply chain. With annual spending of approximately $30 billion, we are able to leverage our purchasing power to set sustainability expectations beyond our own operations.”
Theresa Ragozine, VP of Procurement Citizenship at J&J, will lead a CSR Executive Panel discussion for the two-day CSR Certificate Program presented by The Institute for Ethical Leadership at Rutgers Business School and Governance & Accountability Institute at the Newark, NJ campus of the Rutgers University School of Business on Wednesday, September 28th (2016) at 1PM.
The course agenda includes a session focused on exploring J&J’s own world class sustainable supply chain best practices. Joining Theresa Ragozine will be Cindy Bush, Director-Environmental Health & Safety at Tessy Plastics (J&J supplier), and Toby Simpson, Program Manager-EcoVadis (J&J partner). Professionals in companies with a global supply chain benefit from the knowledge shared in this session. So, too, will men and women pursuing the dream of playing a role in the “sustainability journey” of companies that seek to gain a more effective supply performance management strategy and action plan. There is more information about the Rutgers/G&A Institute CSR Certificate Program at this link: https://www.eventbrite.c
Read the story below:
The necessity of sustainable supply chains
(Tuesday – September 13, 2016)
Source: Supply Chain Digital – Financial support for sustainability can only go so far. To make a real difference in supply chain sustainability, global companies need to leverage their influence and resources to drive true change.