Managing global supply chains is a highly complex exercise, and capable green leaders are working to successfully shape their supply chains with an eye to enhancing their organization’s sustainability and that of their suppliers.

Steering supply chains toward sustainability requires champions, a business case, and an understanding of the long-term management strategy. Maximizing each of these components ensures supplier, management and employee buy-in during transition and ‘new normal’ supply practices.

The rationale for sustainable supply chains, the “baseline” for their success and best practices were captured in a May, 2010 report from the Network for Business Sustainability. The analysis found that firms should justify responsible and responsive supply chains because their stakeholders are raising concerns about social and environmental issues in a globalization context.

New research also suggests the key for effective, profitable supply chain management is “collaborative supplier ‘networks’” over centralized control. The report highlighted the success of Nespresso, a division of Nestlé, in building personal, trusting relationships along its supply chain to achieve long-term stable supplies, mutual financial benefits and quality assurance.

Nespresso created the AAA Sustainability Quality Program in 2003 with 3 partners. The group grew to 14 partners by 2007 while Nespresso’s sales grew over 350% in the same time period.

Nespresso, and companies like it, find sustainable supply chain success through various tools. They choose strategic partners, focus on quality products, frequently and openly communicate, and introduce policies as the strategy grows outside the initial trust relationships.

Of course, subsequent to developing a sustainable supply chain is its daily operations. The modern supply chain executive is likely responsible for both his or her own company’s operations, and the upstream activities of its suppliers. To succeed in this role, companies may wish to engage innovative leaders with a global awareness of sustainability issues, conventional business acumen related to commodities training and procurement (which may be leveraged in carbon markets), understanding of corporate citizenship, and, of course, excellent communication skills to enhance internal and external relationships and operational success.

By Cheryl Johnson, cjohnson@delphi.ca