‘Triple Supply Chain Advantage’ Yields Quantifiable Benefits in Revenue and Brand, As Well As Risk and Cost Management
World Economic Forum Study includes Toolkit full of best practices, guides procurement practitioners
The business case for sustainable supply chains has been confirmed and elaborated with a library of best practices in a recent study from the World Economic Forum (WEF). This paper is an excellent resource for any procurement organization to inform and inspire sustainable supply initiatives.
Also, EcoVadis congratulates our clients including Nestle, Henkel, Nokia, Bayer Healthcare, and Coca-Cola who contributed many of the case examples used in the study.
Here’s a brief review and link to this valuable resource:
The study, called “Beyond Supply Chains: EmpoweringResponsible Value Chains” was created in collaboration with Accenture. The results show positive, quantifiable business outcomes for companies who engaged in what the study calls a “triple supply chain advantage” approach. For example:
- Revenue uplift of 5-20%;
- Supply chain cost reduction of 9-16%
- A brand value increase of 15-30%
- Reduce GHG’s by 13-22%
- Significant company risk reduction
These results echo some the results found in the “EcoVadis – INSEAD study on the Value of Sustainable Procurement Practices” (find it here in our white papers library), which also analyzed positive impacts for sustainable procurement initiatives in terms of results as a % of revenue, and potential ROI. For example, the EcoVadis study found that cost savings average 0.05% of revenue (up to 6 times payback), risk reduction (primarily in protection from supply disruptions and brand damage), an average return of 0.7% of revenue (up to 85 times payback), and revenue growth of up to 0.5% (up to 58x payback).
WEF’s Triple Supply Chain Advantage
The “triple supply chain advantage” described in WEF’s “Beyond Supply Chains” study is an approach that balances positive impacts in profit, environment, and social/local community in business decisions. Initially focused on the consumer goods sector, the study identifies a collection of 31 “value chain best practices”, most of which are applicable or easily adaptable to other sectors. Six of these best practices are focused on sourcing, production, materials and supply chain and related cross-functional practices.
The study’s framework identifies four sustainability strategy ‘maturity’ phases: Compliance-driven, Efficiency-led, Legitimating, and ultimately Holistic. Further, it distinguishes two broad categories of “Cost leaders” vs. “Differentiators” and the paths each take through the sustainability journey. Although they follow different paths, valid best practices are revealed in each.
Chapter 3 (of 4) in the paper is “beyond the business case – committing to human rights” tackles the difficult topic of addressing wages in the supply chain, and challenges companies to rethink in a broader human context what it means to be “competitive”.
This paper is an excellent resource for any procurement organization to inform and inspire sustainable supply initiatives. You can download the study here at the WEF website.