sustainable global
supply chains
Framework and Best Practices
Prepared by
Dr. Stephen Brammer
Dr. Stefan Hoejmose
Dr. Andrew Millington
nbs.net and NBS
Supply chain
disruptions can
be devastating
for operations
and share price.
3%
7%
CUSTOMERS
1% attraction
3% 26% retention
reputation
brand
access
COMPLIANCE
14%
regulation
social pressure
COSTS
risk management
2% efficiency
productivity
COMPETITIVE
ADVANTAGE
19%
14%
CONSCIENCE
moral obligation
1% 2% or values
8%
Examples of each are given below (the italicized examples appear most often in the literature).
INTERNAL LEVERS
PO
T
PAR
W
financial resources, training and workshops,
ER
incentives, transparent and measured outcomes
Purpose
Pu
urpose
rpose
People: leadership/management support,
Policy
Poli
oliic
icy supportive organizational culture, change
agents, staff with strong personal commitments
Pe
eople
ople
People and capabilities
EXTERNAL LEVERS
Certification
Certification
2
Sets
Sets expectations
expectations of of Commonly used
used as
legitimacy with local stakeholders required conduct Commonly asaa
required conduct screening device in
throughout thethe screening device in
• Codes of conduct are relatively static throughout supplier selection &
supplysupply
chainchain supplier selection
development
and unresponsive to new issues or & development
changes in stakeholder expectation
• Third-party certification (e.g. SA8000 or
SELECTT
CTT
ISO14001) imposes substantial costs
EC
REJJE
on suppliers
• Monitoring and auditing undermine trust and
commitment in buyer-supplier relationships
• Intensive monitoring can promote unethical
practices such as suppliers hiding issues Monitoring/
Monitoring/ Selection
Auditing
Auditing Is the primary
from supply chain partners Ensures
Ensures process forSelection
reducing
• Lack of contract security undermines compliance
compliance Is the primary
supply risks
withexpections
with expections process for reducing
suppliers’ willingness to invest in more supply risks
sustainable practices IN S
SP CTT
PEEC
4 3
• Suppliers may lack resources to implement
new approaches, and competing pressures
(e.g. for timely deliveries) undermine the
conditions needed for compliance
*Note that different organizations may implement the practices in a different order.
For instance, third-party certification may be requested/sought concurrently with
selection, prior to selection, or after selection, in response to different needs.
S CONF
ION I RM
TAT SU
PP
C
PE
1 2
LIE
EX RS
L &
FU
AG
IN
Measurement,
RE
AN
Code of Certification &
E
ME
Conduct Development
UP
E of KPIs
ON
AT
CRE
TAR
Environmental
Scanning Supplier
GETS
Selection
Supplier
Development
NCE
Data Capture,
MA
Supplier
EV
Evaluation &
OR
Learning
AL
Auditing
RF
Monitoring
UA
PE
4 3
TE
N
AN
AI
D
H
IM C
PR Y
OV P PL
E
E SU
S UR
MEA
Mountain Equipment Co-Op (MEC), an outdoor gear retailer, uses their Supplier
Code as the standard all vendors must adhere to. All suppliers are briefed on
the standards and their obligation to meet them. Afterward, they must sign a
Vendor Agreement formalizing their commitment. In return for their dedication,
MEC works with factories to improve practices instead of walking away.
Factories in turn must be willing to improve, and demonstrate positive results.
Source: Mountain Equipment Co-Op website.
http://www.mec.ca/Main/content_text.jsp?FOLDER%3C%3Efolder_id=2534374302883571
The Coca-Cola Company invited top global suppliers to discuss the need to
embed sustainability in their operations. Rather than set top-down directives,
the company sought suppliers’ input to ensure long-term mutual success.
Following the summit, Coca-Cola received nearly 200 proposals from suppliers,
including ideas and strategies related to sustainable packaging, logistics,
sustainable agriculture, water stewardship and portfolio innovation.
Source: UN Global Compact, The Coca-Cola Company: Supplier Sustainability Summit,
http://supply-chain.unglobalcompact.org/site/article/70
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