SUPPLY CHAIN
“ For most CEOs , an urgency to act is encountering the reality that turning sustainability aspirations and commitments into measurable results is easier said than done ,” it notes , identifying four groups of CEOs ( see box ).
More than half ( 51 %) of chief supply chain officers surveyed in a separate IBM report said they would be willing to sacrifice profit – 5 % on average – to improve sustainability outcomes , equating to US $ 22bn for US Fortune 500 companies in one year .
" The confluence of post-COVID challenges , inflation , supply issues , cyber security , and sustainability has led to the most complex operating environment in modern business . This has forced organisations to rethink and rebuild their supply chains to be more agile , efficient , and sustainable ," says Jonathan Wright , managing partner , finance and supply chain transformation , IBM Consulting .
" Technology and data-fueled automation and intelligence are key to not only evaluating current workflows and inefficiencies , but in identifying new opportunities as well ."
Concentrating on select priorities might be more advisable than juggling a long list of requirements that may , or may not , transition from bullet points to reality .
It is not enough to launch individual initiatives sporadically and hope for success . The ‘ dartboard ’ approach to sustainability has been consigned to the pre-COVID , pre-COP era .
Instead , sustainability must be seen for what it is : a transformation of company operations spanning the entire supply chain , according to McKinsey .
McKinsey highlights four crucial elements to the transformation of company operations :
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Set the right target level The first step begins with a realistic outside-in assessment : what are regulatory expectations ?; where are competitors raising the bar ?; and what are the expectations of customers and other stakeholders , including investors ?
It is usually strategically advisable to take the lead in a small number of relevant dimensions and determine what the future minimum requirements will be in all other dimensions , advises McKinsey .
The level of the targets and the speed of their achievement should be based on realistic assumptions and plans . Knowledge of the levers and the technical possibilities to arrive at a realistic ambition is of particular importance .
80 July 2022