2Sustain

How can you distinguish a sports fan from a true procurement pro? Easy. Take the person in question aside today and mention one word: “Accenture.” The sports fan will start rattling off details about Tiger Woods’ triumphant comeback in yesterday’s first round of the World Golf Championships (WGCs)-Accenture Match Play Championship. The true procurement pro, on the other hand, will reply with something like, “Accenture? Sure, they’re in the news. They just published a report on balancing cost, customer service, and sustainability to achieve a high-performance supply chain.”

I’m guessing you know how I would respond.

Yes, Accenture has, in fact, just released a new report, titled “The Sustainable Supply Chain: Balancing cost, customer service and sustainability to achieve a high-performance supply chain.” The report analyzes data from a 2008 survey of 245 supply chain executives representing a wide range of industries and nearly all global regions, and it shows once again that, contrary to popular belief, implementing sustainability processes and technologies does not have to be costly. In fact, Accenture found that the best-performing organizations on cost and service are typically also leaders on implementing sustainability across all parts of their supply chain.

Accenture segmented the surveyed companies into three categories: masters, average performers, and laggards. And, masters –organizations that have achieved top-quartile performance in both cost effectiveness and customer service –proved to be more than twice as likely as non-masters (20% versus 9%) to actively model their supply chain carbon footprints and implement successful sustainability initiatives. I found that result quite intriguing.

Breaking it down even further, the Accenture findings show that masters are:

• Designing products with sustainability in mind

• Actively managing down their supply chain footprint

• Seeking the most pragmatic solutions to their environmental challenges

• Choosing systems and processes that offer the best possible return on capital

• Benefiting from an integrated view of sustainability across the supply chain

Accenture also found that masters are increasingly likely to assess the value of supply chain projects based on a relatively new, sophisticated three-dimensional business model. They’re optimizing ROI by considering a project’s sustainability improvement, in addition to the more traditional cost and service implications.

When it comes to warehouse operations and transportation, the survey found that masters take a pragmatic view of integrated sustainability and tend to select the most cost-effective and straightforward supply chain solutions. For example, masters are about 30% more likely than the laggards to implement a practical solution, such as natural lighting in their warehouse.

Interestingly, though, a full 86% of respondents have undertaken at least one green initiative in their warehouses:

• Recycling (52%)
• Use of energy efficient bulbs (52%)
• Lighting management systems (40%)
• Use of natural light (38%)
• Storm water retention and grey water use (17%)
• Environmental considerations in build –topsoil relocation, environmental landfill, etc. (17%)
• Solar panels (7%)
• Wind turbines (6%)
• Other (2%)

And, 38% of all respondents said they have undertaken at least one green initiative in their transport fleet:

• Green fuels (16%)
• Hybrid engine vehicles (16%)
• Streamlined vehicle design (15%)

Accenture boils all of this down to five key steps for integrating sustainability within a high-performance supply chain:

1. Develop an integrated view of the end-to-end supply chain.
2. Measure performance against the three headline measures of cost-effectiveness, customer service and sustainability improvement.
3. Calculate the carbon footprint of the supply chain, then consider carbon as an integral part of the business case for projects.
4. Maximize ROI in the supply chain by adopting pragmatic solutions to environmental issues and considering the total cost of ownership.
5. Selectively deploy the most cost-effective, proven technologies.

For more details on Accenture’s research with sustainable supply chains, check out their website.

And, for all you procurement pros who also love golf, updates on Tiger’s performance at the World Golf Championships (WGCs)-Accenture Match Play Championship Match are available here.