MHI Solutions


Sustainable Supply Chains Requires Effective Supply Management Capabilities

MHI-Q0116_L_Final-35Globilization has created the emergence of sophisticated supplier networks, creating management challenges as exposure to volatility and complexity of global sourcing has emerged. While Western organizations have met shortterm cost reduction and flexibility goals through outsourcing, it has been at the expense of lower transparency into suppliers’ operational processes within these far-flung areas of the globe.

Many enterprises have limited or no visibility into their second-tier or third-tier suppliers, due to subcontracting activities that occur without their knowledge. Opaque supplier networks leaves supply networks exposed to environmental or labor practices that are non-compliant with enterprise sustainability objectives and codes of conduct.

Increased risk to the brand, and associated financial impacts due to consumer reactions, has occurred in such cases. Wal-Mart, Nike, Gap, BP, Baxter, Apple, Aldi and others can attest to the dramatic impact of sustainability risks on their brand image and customers. This has brought about a recent understanding of the role of transparency in sustainable supply chains, in support of a diverse set of stakeholder needs.

It has now become clear that simple monitoring through a self-managed set of narrowly defined evaluative activities is no longer enough to meet stakeholder demands for accountability in the supply chain. Organizations must move towards a multi-faceted view of stakeholder accountability through increased transparency of activities in its extended supply chains.

By Robert Handfield

Click here to read the full article.

This issue of MHI Solutions tackles the important topic of digital technologies in the supply chain industry, especially as it relates the transportation and logistics. Transportation plays a central role in supply chains, whether they are local or global enterprises. And just like the overall supply chain, transportation is facing a digital revolution including new solutions for tracking road, rail, sea and air freight and parcel transportation. These digital technologies are disrupting the industry, but they are also providing im-portant new solutions for transportation inefficiencies and urban logistics challenges. They are also creating new digital business models that enhance transparency and sustainability and contribute to end-to-end supply chain visibility. Like the innovations impacting supply chains, these trends are being driven by the growth of e-commerce and the consumers’ never-ending need for better, faster and cheaper. Ignoring them is done at your own peril.

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