Who has the power to green the supply chain?
One of the issues we explored in our recent Corporate Sustainability Mastermind Group meeting on supply chains was who in the organisation has the power to drive or constrain the greening of the supply chain. I’ve been developing that line of thinking since for an exciting new project (watch this space), and I’ve come up with a hierarchy of constraints that you can see above.
- Trying to green the supply chain by simply choosing the greenest option available is the easiest place to start, but it will only ever lead to incremental improvements.
- By setting a procurement policy which, say excludes certain substances or certain suppliers, you will have more influence, but you are still constrained by the way the rest of the organisation operates as that is where demand comes from.
- The design of operations – whether that’s manufacturing, logistics or even office processes – will determine which materials you need and in what quantities.
- Above that, the actual design of your product and service will drive operations and the levels below. Will this product be designed to be made out of recycled materials? Does it require rare earth metals?
- The business model is the next influential – are you going to produce a physical product at all or a digital product or a product service system where you lease rather than sell?
- And overarching everything else is your corporate philosophy – are you prepared to invest in the supply chain you need? Do you want to be a pioneer of the circular economy? Or collaborative consumption? Are you going to use your buying power to effect change on a transformational level?
Of course in practice, the boundaries blur and they may not all apply to all organisations. But the overall principle is that the higher in the hierarchy you effect change, the bigger the impact on your supply chain footprint.