It’s all too easy to find examples of malpractice in extended supply chains – dodgy employment practices, use of child labour, or for that matter the Bangladesh fashion factory fire in 2012.
But, there is a real financial advantage to taking a proactive approach to these issues, according to a report published by the World Economic Forum in collaboration with Accenture.
The report, Beyond Supply Chains, highlights “the triple supply chain advantage” – where companies achieve profitability while benefiting society and the environment.
It examines how companies strive for this triple advantage and looks at how they intend to achieve it.
The report identified 31 practices that can be used by companies to codify their own specific portfolios of measures. And using a model of consumer goods supply chains the report comes up with some significant benefits:
* Profitability: Revenue uplift of 5-20 per cent; supply chain cost reduction of 9-16 per cent, brand value increase of 15-30 per cent, significant company risk reduction
* Local development and societies: Improved customer health, local welfare and labour standards (wages, working conditions)
* Environment: Carbon gas reduction of 13-22 per cent on overall footprint.
“It is our goal that the results of this report guide future supply chain decisions towards creating more responsible supply chains for tomorrow’s customers and consumers,” says Wolfgang Lehmacher, head of supply chain and transport, mobility industries at the WEF.
That’s not a bad ambition.