Lately we’ve been shining a spotlight on the best ways to track and measure sustainability metrics and to start integrating corporate sustainability programs into your operations for 2013.
Some of your options include standardized sustainability reporting programs like the Global Reporting Initiative (GRI) or finding an industry-targeting program like The Global Automotive Declarable Substance List (GADSL) or one of the GRI’s sector supplements.
There’s also the method that we believe will be having a big impact in the years to come: involving supply chain management from an environmental perspective in your overall sustainability tracking.
We’ve gone in-depth with the concept of supply chain management as a winning sustainability tactic in a handful of previous articles - including bridging gaps in supply chain data management, applying GRI metrics to your supply chain management, and how to start using supply chain management techniques – but the bottom line is that your supply chain is absolutely full of sustainability information that has an impact on your business’s sustainability potential.
Essentially, if you’re not paying attention to your supply chain’s sustainability, you’re only seeing the tip of the iceberg.
This article will tackle one of the big issues that many manufacturers face when they just begin to implement supply chain management techniques to increase their sustainability reporting ability: lopsided sustainability tracking data stemming from gaps in your supply chain management.
All or Nothing?
When it comes to tapping into the flow of data that runs through your supply chain, a single broken link can bring your entire sustainability reporting program down to the ground.
Ideally, you’ll be collecting data from every single one of your suppliers, and then all of their suppliers… all the way back to the moment raw resources are extracted from the Earth if possible. But for most businesses, especially those at the far end of the manufacturing supply chain, it’s typically more realistic to expect that sustainability data get tracked down to tier I and II suppliers.
However, even though you don’t need to intensely monitor every single tier III and IV chain link, you will run into issues if you’re only getting half the picture from your tier I and II suppliers.
For example, an automotive OEM is bound to find sustainability tracking difficult if they get all sorts of data from their tire supplier but nothing from their paint vendors or from their engine manufacturers. All they’d really know is how sustainable the tires of their finished goods are.
That Scenario is What ERA Calls having Lopsided Data
And while knowing the sustainability of any component in your products is never a bad thing, it won’t bring you any closer to achieving your goal of capturing a comprehensive, complete environmental footprint of your own products that will allow you to benchmark against the rest of the industry, make continuous improvements to your processes, and then market yourself accordingly and honestly.
It’s like holding a single jigsaw puzzle piece: it’s an essential place to start, but you’ll need the rest of the pieces to put together the whole picture.
While you should not think of sustainability tracking as an “all or nothing” affair (after all, projects would never get started if you had to tackle every conceivable angle all at once), when it comes to supply chain management it is important to implement a system and policies that focus on entire tiers at a time rather than cherry-picking data sources.
Planning for Supply Chain Management Success
It is no small task to start collecting sustainability data from your vendors in the supply chain, let alone create a system that tracks sustainability metrics evenly from your supply chain tiers. Currently there are some large and international OEMs taking on the challenge, but that doesn’t mean your business shouldn’t start implementing sustainable supply chain management techniques right now.
Some of the methods we’ve helped manufacturers implement aren’t as complex as you think:
- Make it company policy to work with vendors who already disclose sustainability data in their company documents and/or participate in voluntary sustainability reporting programs.
- Start by asking your suppliers to track and disclose something simple to calculate or something they already track internally, such as their carbon footprint. You’ll be able to report your total carbon footprint until you get the rest of your sustainability data.
- Take initiative and create a secure online portal for sharing data back and forth with suppliers. The easier you make it for them, and the more confident they feel in their data’s confidentiality, the more likely it is that suppliers will be on board.
- Ask your vendors what their sustainability goals are and how you can help them achieve that. Just like selling a product, focus on what they’ll get out of it, not you. This could open up the stream of sustainability data that is otherwise hard to access.
Fixing Lopsided Data
No matter how well you plan or how compelling your case is, there’s no guarantee that all your suppliers will participate in sustainability tracking with you. Hopefully, there’s just one or two weak links in your chain, but at first you might have more opt-outs than opt-ins.
If you have one or two stellar examples of suppliers that help you out with your sustainability metric tracking, we suggest that you hold them up as examples to your other vendors.
Demonstrate the value and benefit they are experiencing by getting more involved in their own sustainability, as well as how little effort it requires on their part. Some businesses have preferred vendor awards and other recognition systems that could come into play in this scenario. There’s also nothing wrong with replacing an uncooperative vendor if you have the option and an equivalent alternative supplier lined up.
Image credit: Rachel Coleman Finch, some rights reserved
February 11, 2013