Companies look to their supply chains to meet sustainability goals

Global manufacturers seem to agree that enhanced visibility, flexibility and sustainability efforts are central to improving operational performance within the supply chain.

While pressures have mounted in recent months to reinforce supply networks in the wake of last year's slew of environmental disasters, many companies already seem to acknowledge the bottom line benefits of continuous improvement and Lean Manufacturing.

This week, Henkel, a manufacturer of soap and detergent products, outlined plans to triple efficiency across its business and supply chains by 2030. The company plans to use only one-third of its current inputs for every euro it generates over that timeline.

Henkel's efforts reflect a wider trend in manufacturing to improve operational performance and efficiency as means of cutting costs and boosting the bottom line. For many companies, the imperative of environmental sustainability has only strengthened this resolve

“We must find ways of achieving more with less,” said Henkel CEO Kasper Rorsted. “We are convinced that not only do we have a duty to future generations to pursue sustainable development, sustainability also makes economic sense for us and is an important competitive factor. It reduces costs, drives innovation and strengthens our position in the markets of the future.”

Over the past ten years, the global brand has managed to reduce its energy and water consumption by 42 percent and its waste footprint by 50 percent per metric ton of output. These sustainability improvement efforts may even indirectly curtail workplace hazards, as the number of occupational accidents plummeted by 85 percent over the same period.

Also this week, Texas Christian University's Neeley School of Business, Supply Chain Management Review and CSC published a report touting the need for enhanced flexibility in the supply chain to drive financial performance. The 9th annual Global Survey of Supply Chain Progress concluded that firms with more visibility and higher quality data consistently outperform their rivals. Leaders also tend to be early adopters of new technologies and planning systems.

“In 2010, CSC pulsed supply chain near the bottom of the economic downturn and found that supply chain managers were key contributors to stabilizing the abrupt economic down draft by aggressively managing costs and crafting a flexible supply chain to retain market share through increasing customer service,” the report explains. “In the 2011 study, the results show the continuing importance of supply chain managers as the economy rebounds.”