2Sustain

In Jason Busch’s recent posting on Spend Matters Your Supply Chain Carbon Footprint — Measuring it Ain’t Easy I think he really hits the nail on the head when he speaks to the need to "put science and process into measuring supplier practices." In my estimation, process standardization is the key to successful sustainable supply chain management.

Sustainable supply chain management is all about reporting data, monitoring compliance, and improving performance in areas ranging from toxics to emissions to packaging to logistics. But only by standardizing how we gather, analyze and report on this data can we begin to implement viable improvement programs and move up the maturity continuum.

The need for standardization also ties back to Jason’s first point around whether we are in a “hype phase” for sustainability and socially responsible procurement practices. Jason may be surprised to find that I agree with him that we are, indeed, in a hype phase. However, I think I have a slightly different take on what is causing the hype. The easy answer to “Why are we in a hype phase?” is that businesses are simply responding to the “green frenzy” based on their market position — for startups this frenzy is a business opportunity (e.g. rampant market entry) and for existing, larger firms it is a sales opportunity (e.g. cause related marketing/promotions).

I take somewhat different approach though and believe we are in a hype phase because of two very disconnected “realities” –

1. REALITY 1: We face hugely pressing problems and are deluged by daily magazine covers and TV news reports about melting glaciers, dying oceans, burning forests etc…this is big time crisis stuff and people are starting to get a bit freaked. We want answers, we want solutions, and we want them now, especially from businesses who seem to be a large part of the problem.
2. REALITY 2: Business are big, complex animals and nearly ALL of them are  in the nascent stages of actually getting their hands around sustainability. In terms of standardizing business processes for sustainable supply chain management we’re in the top of the first inning here and have years of work ahead of us.

So in my opinion therein lies the disconnect, and the reason we get hype. Companies are forced to address Reality 1 in their press releases, CSR reports, and marketing campaigns while the truth is that that they are stuck in Reality 2 – the middle of the first inning of their sustainability program planning and implementation. For example, if company X has a massive ERP vendor master cleanup issue on their hands (duplicates, bad data, etc) how can they even begin to think about forcing their suppliers to do carbon footprinting and integrate with their backend systems for global reporting etc? They can’t (yet). Or if company Y has no business processes in place to maintain basic supplier profile or compliance data on the front end how can they really expect to be successful rolling out a toxic substances monitoring program on the back end? They can’t (yet).

But given the mounting pressures from the public, media, Wall St, regulators, etc. these companies have to say SOMETHING… they have to show they “get it” and are actively working on these issues. So we get hype… because Reality 1 and Reality 2 are just so far apart that hype fills the gap while companies play catch up.