For the last three years global corporations have added "green" and "sustainability" to the supply chain agenda, in particular with respect to climate change and carbon footprint reductions. This trend coincided with unprecedented economic growth and record-breaking energy prices. With recession looming, supply chains will face their true commitment to the environment as they adjust operations.
For those who maintain that companies have no business getting involved with responsibility-driven endeavors because, after all, "the business of business is business" there is often a lack of awareness of the business benefits-and practical imperatives-associated with responsibility-driven endeavors. Likewise, critics who point out that it is only for shameless cost or reputation-related motives that companies adopt responsibility-driven platforms often fail to acknowledge the many positive social and environmental outcomes even of initiatives with top or bottom line-driven goals. Case study interviews with firms of all sizes indicate that these critiques illuminate an outmoded way of understanding the social, economic, and environmental imperatives of this historic moment.
To be honest, I'm a bit "greened out" at the moment. I feel like I did a few years ago, when RFID was all the rage. The first few months of RFID were exciting, learning about the technology and listening to executives at Walmart, Gillette (now P&G), and other early adopters talk about their ambitious plans. But as the months went by, there were fewer and fewer new developments to discuss or analyze. Every conference had the same set of speakers, and all the case studies (what few there were) started to sound the same. I think we've reached a similar plateau with green supply chain management.
Aberdeen's research shows point-of-sale transaction data from retail locations is still a hurdle for 66 percent of manufacturers. The low levels of transaction data sharing cause increased complexities in tracking promotion effectiveness at the store or field level.
Consumer products companies were early adopters of supply chain planning and supply chain execution. Most implementations are mature; yet in 2009, 24 percent of companies are considering switching supply chain planning vendors.
Globalization and the economics of purchasing technology will continue to catalyze the growth for network platform and applications. Out of the rubble of the internet have come real industry solutions that address the ever complex supply networks that the enterprise must cope with. A new generation of savvy tech buyers will continue to be the primary purchaser for the networked solutions option.
The lengthening of supply chains at both the supplier's and the customer's side of the equation has resulted in an increased need for collaboration of all kinds.
Corporate responsibility agendas revolve around a triple bottom line (TBL) framework geared to benefit: people, planet and profit. A great deal of business-focused, sustainability research emphasizes a transformation of business processes that support the goals of planet and profit and neglects the centrality of people in making it happen.
There is a tendency to begin discussions of supply chain optimization from the perspective of available business process management software. But to attain real success, companies should base their technology choices on the ability to manage those issues that really matter. In other words, the real starting point requires isolation and prioritization of the most important needs and variables.
[The views expressed herein are those of the author and do not necessarily reflect the views of Ernst & Young LLP]
Business process management will continue to be a topic of interest to supply chain companies in 2009. Because process change can be implemented without significant cash investments, BPM will stay fashionable in lean economic times. Adoption will be compartmental for a number of reasons: the economy, organizational politics and the lack of any vendor solution that completely meets business requirements.