- A third of respondents lack a business case to support the development of sustainable supply chains.
- Nearly half of respondents struggle to measure progress.
- The report outlines five recommendations for making your supply chain more sustainable.
New York, September 22, 2022 /PRNewswire/ — A majority (80%) of senior supply chain executives are increasingly focused on environmental, social and governance (ESG) initiatives. However, a new report from Ernst & Young LLP (EY US) released today shows that many companies are finding a business case for achieving their sustainable supply chain goals, end-to-end supply chain visibility. I don’t have the technology yet.
The EY 2022 Supply Chain Sustainability Report includes North, Central and South America Despite articulating a long-term vision, 33% were found to lack a business case to support the development of a sustainable supply chain. Additionally, nearly 1 in 5 of them either don’t have a sustainability strategy or don’t know where to start, and half of the executives have an integrated scorecard for measuring supply chain sustainability results. i don’t have
The report outlines five recommendations for leaders to jumpstart their supply chain sustainability programs.:
- Estimate the target gap: Understand your current sustainability performance and examine how your current supply chain design supports (or does not support) your organization’s overall sustainability efforts and goals.
- Improved visibility and traceability: Adopt technology and improve processes for extensive data sharing with suppliers.
- Expand your business case. Include drivers other than cost savings, such as increased revenue, market share, risk mitigation, customer loyalty, and talent recommendations.
- Broaden your focus and prioritize: When it comes to sustainability, look beyond procurement to other functions of the supply chain such as manufacturing, logistics and product design.
- Take advantage of incentives: Leverage available tax incentives and subsidies to fund future initiatives.
Raj Sharma, EY Americas Consulting Vice, said: Chair. “Today’s customers aren’t just asking why products aren’t on store shelves, they’re asking tough questions about sustainable sourcing for companies, working conditions for suppliers, and more.”
In response, supply chain leaders are prioritizing improved end-to-end visibility (58%) and resilience (47%), according to the report. As consumer, investor, regulator, and employee expectations drive increased demand for supply chain disclosure, the report seeks to ensure that visibility across the supply chain is in line with the recommendations of the U.S. Securities and Exchange Commission or other countries. necessary for companies striving to comply with climate disclosure regulations.
Despite the emphasis on increased visibility, cost reduction is the primary motivation for improving supply chain sustainability, according to 61% of those surveyed. Reducing water usage, using renewable energy and minimizing material waste are key focus areas for improving efficiency.
“Cost savings are not the only benefits supply chain leaders should expect from sustainability initiatives. Summit Datta, EY Americas Supply Chain and Operations Markets Leader. “Profitability, risk management, customer loyalty, brand reputation, innovation, employee quality of life, and talent retention create the strongest business case.”
The EY report also found that sustainable supply chains can:
- Contribution to profit growth: 70% of executives have already experienced or expect to see increased revenue from sustainability supply chain initiatives in the next 1-3 years.
- Better risk management: 55% expect to improve their operational risk management within one to three years.
- Contribution to business intangibles: Within the next three years, 40% of those surveyed expect improved employee quality of life, 44% expect improved customer loyalty, and 31% expect lower employee turnover. I think.
“The leading supply chain executives we call trailblazers are seeing positive results from sustainable supply chains,” says Dutta. “They are seeing earnings growth and expect the stock price to improve over the next few years.”
Trailblazers are also driving digital networking by sharing data in the cloud with key stakeholders and working to increase end-to-end visibility across supply chains. Today, they are embracing cloud-based sustainability applications, Internet of Things (IoT), and machine learning. A near-autonomous supply chain with fully automated planning, fulfillment order robotics, and driverless trucks and forklifts is the future goal of supply chain leaders, according to the survey.
The full EY 2022 Supply Chain Sustainability Report is available at https://www.ey.com/en_gl/supply-chain/supply-chain-sustainability-2022.
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