Sustainability is a word you’ll find in every annual report and mission statement. Sometimes it’s heartfelt. Sometimes it’s the whole point. And sometimes it’s bandwagon-jumping. But when it comes to SCM – Supply Chain Management, the core of fulfilling your business needs – what is sustainability, really?
One thing’s certain: it’s not just about green policies. It’s about sourcing the best inputs, at the best price, that produce the best outcomes for your business – and for the planet and its people, without engaging in wasteful, unproductive, or dubious practices at any step. Because even in our post-globalized world, most of the sustainability metrics you need to meet aren’t collected within your four walls.
The good news: you can influence events up and down your chain of suppliers by making effective use of data. In this blog, you’ll see how leading multinationals are using data to make sustainability a pillar of their sourcing strategies, with three real-world examples.
Forward with Ford: how an automaker sees the big picture
Few companies are as global as carmakers. The vehicle on your driveway may contain parts from factories in Mexico, Thailand, and France, licensed intellectual property from Germany and Japan, and specialized components from industries as diverse as chipmaking, software development, and academic research. That’s a big ask for any sustainable supply chain management strategy.
All in, over 10,000 suppliers may contribute to your family SUV – and Ford has several initiatives for dealing with them, with names like CDP (Carbon Disclosure Project), PACE (Partnership for a Cleaner Environment), and the RBA (Responsible Business Alliance) audit process. What these have in common: they address the key concern of a heavy industry like autos, namely reducing emissions of greenhouse gases like CO2.
Data analysis revealed most of the emissions risk lay with top-tier suppliers – so Ford audited 31 of them, accounting for a huge percentage of total emissions.
The takeout from Ford? “Fish where the big fish are” – work out who’s responsible for the greatest impact, and work with them to bring their practices into line with your sustainability policy. But it’s only with data that you can find out where those fish swim.
IKEA’s big IDEA: assembling a new kind of plan
Hailing from Sweden, a world leader in international development, IKEA’s brief for sustainable SCM is unusually broad. Its IWAY framework – inspired by the UN Guiding Principles on Business and Human Rights, the 10 Principles of the UN Global Compact, the UN Sustainable Development Goals, and the ILO Centenary Declaration for the Future of Work among others – goes beyond the sourcing of milled-lumber primary inputs (trees!) to include child labor, animal welfare, and protection of human rights.
Like a piece of software, IWAY is in continuous development, now at Version 6. And every release is driven by data. IKEA incentivises suppliers to share information, and supports them on implementing IWAY policies. It’s two-way.
That’s the takeout thought here: the company recognizes that issuing “edicts from above” creates a master/slave relationship, rather than the collaborative one it wants. So it gathers a range of metrics, gleans insights from the data, and uses those findings to update its own thinking – not just lay down the law.
From a Dell to a sell: making waste make money
Last, let’s look at the company that practically invented the modern supply chain: Dell. Back in 2017 the company realized how a beneficial business strategy – high efficiency to reduce prices and fast product cycles to sell more stuff – were creating vast volumes of unrecyclable e-junk, perfectly good technology lying around unused. It resolved to make a change.
Today, Dell is a leading light of the “circular” supply chain. When a product is sold, there’s a concrete plan for recovering it 3-5 years later, recycling its components, and – metaphorically speaking – selling it again, thanks to sustainability policies that promote easier reuse and refurbishment. Less than a year after starting, Dell had processed 50m lbs (23m kg) of used technology this way; the policy now affects design choices for everything from casings to disk drives. And, of course, it’s data that aids those choices and tracks technology over its lifecycle.
The takeout from Dell? Don’t think of supply as a chain, but as a circle, recovering outputs and turning them into inputs again. It’s a recipe for sustainability success.
CONCLUSION: Sustainable SCM = sustainable procurement model
The ultra-competitive supply chain … and procurement profession’s desperate search for sustainability. As these examples show, they aren’t in opposition. Good policy is powered by good data. The sort of data Scoutbee can help you find, and turn into actionable insights for your own sourcing.
If you’re ready to learn more about how our products enable you reaching your sustainability goals, see our Supplier Discovery and Supplier Intelligence pages. Or schedule a call with one of our sales representatives via our contact form.