Sustainability and profits rated equally important by supply chain managers

15th January 2019


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  • Manufacturing ,
  • Technology ,
  • Supply chain ,
  • Sustainability

Author

Caitlin Hafferty

Three in five senior executives at retail and manufacturing organisations believe sustainability is just as important as profitability when managing supply chains.

That is the headline finding of a global survey by the Economist Intelligence Unit (EIU), which also found that a quarter of supply chain decision-makers believe sustainability is more important.

And this view is particularly prevalent among senior managers, with 67% of C-suite respondents saying sustainability comes first, compared with 55% of the others surveyed.

However, economic performance is still seen as the top ranking corporate sustainability priority for most organisations, with growth opportunities and cost savings cited as the main drivers of sustainable supply chains.

“We see respondents possibly 'saying the right thing' when asked in the abstract about the importance of profitability and sustainability, but saying something different when it comes to specific organisational priorities,“ EIU technology editor, Jeremy Kingsley, said.

Despite driving corporate action, the survey of 250 organisations found that firms are divided on whether supply chain sustainability has a positive or negative impact on cost or not.

Costs were cited as the largest impediment to supply chain sustainability and responsibility by 38% of those surveyed, especially managers representing small businesses.

Difficulty in monitoring complex supply chains and organisational structures were also cited as barriers by 29% and 24% respectively.

In Europe, the survey found that supply chain decision-makers believe that reducing operating costs has been the top supply chain priority over the last five years.

Over the next five years, however, reducing environmental impact is seen as the number one priority for European firms.

“Making the right decisions that can accomplish these dual objectives requires both a big picture view and a granular understanding of the end-to-end supply chain,“ said Razat Gaurav, CEO at LLamasoft, which sponsored the research.

“Global organisations must turn to technology to build 'digital twins' of their real world supply chain, providing a risk-free environment in which to play out many scenarios, from the expected to the unlikely, giving them the confidence that the changes they make will deliver the desired and expected outcomes.“

Image credit: iStock

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