1.3 Supply Chain Management Is at the Heart of Sustainability

SCM is the value-creation engine of every organization. What does this mean? As a SC professional you will play a key role in designing and managing your company’s value-creation processes from new product design to delivering outstanding customer experiences. Simply put, you will greatly influence whether your company can compete and win in today’s marketplace—or not! How you design and manage these processes will also have an outsize impact on your company’s sustainability footprint. Let’s briefly explain why.

The Association for Supply Chain Management (ASCM) depicts SCM via its SCOR (supply chain operations reference) model. The SCOR model emphasizes six value-added processes: Plan, order, source, transform, fulfill, and return (see Figure 1.2). Orchestration, a seventh process, synchronizes these value-added processes into a holistic value-creation system.

When each value-added process performs at high levels, working well with each other, your company is capable of delivering great customer experiences. By considering sustainability issues across all processes, you can improve your company’s sustainability footprint. With this goal in mind, ASCM has embedded sustainability into the orchestration process.

Now, a key point: Four of these processes—source, transform, fulfill, and return—have a huge impact, good or bad, on your sustainability performance.

1. Source. Sourcing focuses on acquiring the goods and services you need to make products and operate the business. The question is, “Are you sourcing in a socially responsible way?” You don’t want to source from suppliers that exploit labor or the environment.

2. Transform. Transformation turns inputs into products and services customers desire to buy. Again, the question is, “Are you managing your transformation processes in a socially responsible way?” Waste of any kind raises your ecological footprint.

3. Fulfill. Fulfill involves getting product from source to customer efficiently and in a timely way. You’ll recognize the question: “Are you delivering in environmentally sensitive ways?” This means reducing emissions and respecting human rights.

4. Return. Return involves activities associated with the reverse flow of goods—e.g., customer returns as well as repair, reuse, and recycling. Here, your question is a little different: “Are you leveraging every opportunity to reduce waste?”

One final thought: You need to manage these processes efficiently and effectively to bring winning products and services to the marketplace. Almost as important, you need to avoid blunders. If one of your suppliers gets busted for child labor or one of your transportation providers is caught dumping chemicals, your company’s image will take a hit. If you want to survive and thrive in today’s marketplace, you must manage your supply chain sustainably.

Now, let’s get back to the sustainability story.