Instead of using a supply chain solely to provide a competitive business advantage, companies also need to focus on creating supply chains that provide socio-economic and environmental benefits, too, says a new report from the consulting firm Accenture and the World Economic Forum.
It is unlikely that supply chain organizations could fulfill all three of these goals all of the time, but the report, titled Beyond Supply Chains: Empowering Responsible Value Chains, identifies 31 practices that would help supply chains to achieve this "triple advantage."
Some of the suggested practices include:
- Reducing the weight or size of packaging materials
- Establishing supplier auditing and control
- Considering sustainability when selecting the location of a production facility
- Selling through "micro-retailers"
- Sharing network facilities and transportation services
For each of the 31 suggested practices, the report outlines the value it can create and provides real-world examples. For example, the report says that companies that share network facilities and transportation can see a 10- to 20-percent reduction in transport costs and a 0.1- to 0.8-percent reduction in their carbon footprint. It points to the example of Amazon and Procter & Gamble, which have achieved measurable benefits from sharing several joint-venture distribution centers.
The report's authors say the benefit of implementing all of these initiatives is huge. They claim that supply chain costs could be reduced by 9 to 16 percent and revenue could increase by 5 to 20 percent, while improving customers' health, local welfare, and labor standards and reducing and organization's carbon footprint by 13 to 22 percent.
The full report is available here.
