SCM sostenibilidad - cost impact
2
Supply Chain experts have, for many years, balanced conflicting priorities of quality, cost, and risk. In today’s world, decisions often need to incorporate environmental, social, and economic considerations. A major British department store estimated that they have a direct influence on less than 10 percent of the life cycle of their products. Sustainable supply chain is about ‘managing the impact’ of the remaining 90 percent. Cost Cost Quality/ performance Quality/ performance SUPPLY CHAIN VALUE EQUATION SUPPLY CHAIN VALUE EQUATION = Risk profile Risk profile + + + Seek to offset potential increased pricing through lower consumption; consider increases in revenue by taking sustainable option; build disposal into the total life cost model. Seek to offset potential increased pricing through lower consumption; consider increases in revenue by taking sustainable option; build disposal into the total life cost model. HOLISTIC APPROACH TRADITIONAL APPROACH Sustainability considerations Sustainability considerations Sustainability considerations – management of key risks and opportunities Sustainability considerations – management of key risks and opportunities Sustainable Supply Chain Overview Where are the economics of the Value to an Organization?
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Transcript of SCM sostenibilidad - cost impact
Supply Chain experts have, for many years, balanced conflicting priorities of quality, cost, and risk. In today’s world, decisions often need to incorporate environmental, social, and economic considerations.
A major British department store estimated that they have a direct influence on less than 10 percent of the life cycle of their products. Sustainable supply chain is about ‘managing the impact’ of the remaining 90 percent.
CostCostQuality/ performance
Quality/ performance
SUPPLY CHAIN VALUE
EQUATION
SUPPLY CHAIN VALUE
EQUATION=Risk
profileRisk
profile+ + +
Seek to offset potential increased pricing through lower consumption; consider increases in revenue by taking sustainable option; build disposal into the total life cost model.
Seek to offset potential increased pricing through lower consumption; consider increases in revenue by taking sustainable option; build disposal into the total life cost model.
HOLISTIC APPROACH
TRADITIONAL APPROACH
Sustainability considerationsSustainability
considerations
Sustainability considerations – management of key risks and opportunitiesSustainability considerations – management of key risks and opportunities
Sustainable Supply Chain OverviewWhere are the economics of the Value to an Organization?
Sustainable Supply Chain OverviewWhere are the economics of the Value to an Organization? (C´ntd)
The value proposition of sustainable supply chain management:
Other potential benefits to be gained: Improved communication with shareholders on material sustainability risks and
opportunities Improved management of issues associated with resource scarcity and/or resource
substitution Improved confidence and knowledge to respond positively to critical media reporting.
Cost reduction
Revenue growth
Reputation enhancement
Risk management
Increased resource efficiency; rationalization of assets and suppliers; reduction in waste; reduction in packaging; reduction in disposal costs from removing hazardous materials from design; compliance with regulatory requirements can remove potential cost of non-compliance.
Introduction of environmentally or socially responsible products and services; penetration of new ‘responsible’ consumer markets.
Protection and enhancement of corporate reputation as a socially and environmentally responsible enterprise; improve employee morale and retention. Create collaborative relationships with supply chain partners.
Improved transparency in identifying and managing supply chain events and risks; respond to regulatory changes appropriately; protect brand and reputation.
