The Sky’s NOT Falling: New Supply Chain, Logistics Surveys Cite Positive Benefits of Sustainability, Challenges Ahead

Geesh.  You’d think by the Twitter chatter that erupted from this weeks article in the Environmental Leader that the sky was falling.  The headline “Supply Chain Chiefs: Sustainability Isn’t Key” caught readers’ attention, but perhaps the messaging was taken a bit too negatively.

The article was focused on two recent surveys by eyefortransport (EFT), a very knowledgeable and (in my view) a marquee market research entity focused on the transportation industry.  In the survey, chief supply chain officers were asked what key challenges they saw for 2011.  Well, a majority that responded did not view sustainability as a key challenge in 2010/2011.  According to the survey, “supply chain officers identified the “biggest business challenges driving their supply chain agenda” as variability and forecasting (42 percent), cost containment and reduction (39 percent), and supply chain visibility (35 percent). Sustainability strategies and practices only ranked 11^th in the list of concerns, with just over 15 percent.”

A second EFT survey of logistics service users’ ranked sustainability only 15^th in importance out of 24 challenges they face, behind such factors as the economy, cost control and fuel price fluctuations.  Meanwhile, the survey noted that respondents from third-party logistics services, “ranked sustainability sixth, with the economy, cost control and demand forecasting coming tops.”

The two surveys results yielded no real surprises. And where some may see this as a sort of “green Armageddon”, I only view this as a “teachable moment”.  One of the comments to the post rightly noted that “supply chain sustainability is a powerful means of supply chain streamlining, cost reduction and agility enhancement, and the topic can be used to improve communications and business relationships through the supply chain.”

Because the principal question posed was “what are the biggest challenges that supply chain managers’ face”, I’ll go out on a limb to say that “first mover” supply chain managers are already getting a handle around this issue and maybe the “concern” level is not as great as in the past. In fact, the survey results suggested that in the past couple of years, organizations are generally acting in a more proactive, sustainable manner. As the survey went on to indicate, well over 60 percent of those companies surveyed had implemented or were initiating sustainability focused efforts in 2010- ranking around 10^th out of nearly 40 supply chain management project categories- that’s actually a pretty good number!   In the logistics survey, most respondents noted a far higher level of positive environmental performance in 2010 compared with 2009.

You see- it’s all about how you look at a situation- greening of the supply chain through sustainability is not looking too shabby in my book, compared to just a few years ago.

If I had to call foul on the two surveys, perhaps EFT erred in recognizing sustainability as its own category.   Perhaps that was by design, but given the embedded nature of sustainability, I could easily link sustainability with a number of other categories that did rank high on supply chain officers “concern” lists, namely: cost containment and transportation and logistics constraints; also lower ranked issues such as product lifecycle, government mandate compliance.  In reality, sustainability is an overarching business approach that cuts across many business silos.  Supply chains by nature are systems-based networks that require dynamic management of internal and external inputs and outputs throughout a products value chain.  Supply chain sustainability is a powerful tool to identify and manage supply chain inefficiencies, reduce waste and optimize business performance.

As I suggested in an earlier article, the supply chain enablers are those who lead through innovation and don’t procrastinate.  These organizations have vision– for the short term and long-term.  These are the organizations I spend time evaluating and from which I share success stories.  It’s still valuable though to understand why some businesses hesitate in acting on sustainability or supply chain greening.  If you are a supply chain officer or logistics manager that is not paying attention to sustainability focused innovators yet, I suggest you take a closer look at what your peers or competitors are doing.  These leaders are changing the way business gets done- and more sustainably I might add.

Clearly by the EFT survey, much more work remains in 2011 but I am confident that supply chain greening and sustainability is here to stay.  Read why on my last post “Five Reasons that Sustainability and Supply Chain “Greening” Will Stick in 2011”.