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Supply Chains Need Standardized Sustainability Metrics

July 29, 2009 - Business Performance Management Forum (BPMF) has found that while businesses understand the need to manage the sustainability of their supply chains, they just aren't doing it.

The study, conducted in mid-2009, included 125 supply chain professionals, of whom 35% had more than 1,000 trading partners. While BPMF found that the majority of respondents in the study reacted positively to the idea of supply chain sustainability, they expressed concern about a lack of standardized, applicable metrics that they can apply to their respective businesses. The report also outlined 3 areas where there was a clear disconnect between businesses understanding the benefit of sustainable practices and operational procedures.

Almost all of the participants in the study were involved in newly created efficiency programs in their businesses but only 38% of those same respondents believe that environmental and sustainability initiatives are directly linked to operational efficiencies. Secondly, More than 65% of companies did NOT use any form of metric or scorecard to measure the sustainability of their value chain, while 80% recognized the inherent value in standardized metrics and reporting. And lastly, more than 50% of companies believe that a sustainable supply chain is beneficial to their business, and can even create competitive advantage; at the same time, 60% have either no, very low, or marginal visibility beyond the first tier of their value chain.

Because these results portray a need for standardized metrics in the supply chain space, BPMF is looking towards a Greenscape Score, which will be an all encompassing metrics tool for supply chain sustainability and transparency. Other large companies such as Wal-Mart and UPS have bypassed this issue and have developed their own standards and metics.

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