Sustainable Supply Chain: The Backbone of Business

Friday, November 13, 2020

Directory Photo of Professor of Supply Chain Management Simon Croom
begin quoteOur groundbreaking research has found that being socially responsible leads to significant improvements in operational performance and leads to a more productive work environment.

If we talk about social responsibility and sustainability, what role does the supply chain play in organizations? Simon Croom, professor of supply chain management at the University of San Diego School of Business, reflects on this topic.

If we compare an organization with a human body, could we say that the supply chain is its backbone?

I would say it is the nervous system! Nothing works if the nervous systems fails and if your supply chain fails so does your business. Supply chains convey the data about demand, about performance, about risks and about opportunities. So, if the economic system is the human body, the supply chain is its nervous system. We have seen how often businesses become paralyzed when their supply chains fail.

Supply chain is a complex network, involving various actors and interests. How can companies implement sustainability in this network? Where to start? Who does it depend on?

Well, 95% of the environmental impact of most products occurs upstream in the supply chain, so working with suppliers is the first step since they have a major responsibility for your environmental and social performance. Second, having a means to audit and measure environmental and social impact is key. Can you identify the water footprint of your products? Do you know the distance traveled by every ingredient or component in your supply chain? Is waste measured? Can you convert your metrics to a carbon footprint? What about pollutants and toxicity of your processes and supply chain processes? Third, support this with a clear strategy to reduce waste, pollution, unnecessary resources and explore alternative materials and processes to cut greenhouse gas emissions.

Why do most companies resist being sustainable? Are they not thinking about future of generations? What really happens?

In many cases, sustainability efforts save money since waste is reduced (and thus cost is saved) and consumers see the value. But, there may be a need to invest in order to reap the rewards and for many organizations it is difficult to see the return on investment due to lack of awareness of benefits. Our groundbreaking research has found that being socially responsible leads to significant improvements in operational performance and leads to a more productive work environment – there are sound business reasons to be sustainable but often executives cannot see these due to their lack of knowledge and vision.

Is it possible to combine profitability with sustainability? What is the value for a company that implements sustainable supply chain over time?

Absolutely. There is strong evidence that there are financial benefits from sustainable practices. Reducing material use, waste processing, having fewer errors, recycling materials, reducing energy costs, improving logistics efficiencies, saving on purchase costs and impacting labor efficiencies through a better workplace environment.

According to the previous questions, what role do business schools play?

Our role is to educate, develop and train current and future decision makers who have the skills and vision to drive efforts aimed at improving the planet while making their organizations more profitable. Supply chain management is seen as one of the critical competencies for any organization’s success, and we aim to produce supply chain professionals with an all-around set of skills and tools.
 
Based on your experience, what does the future of organizations hold? Something good? Sustainable?
 
I am hopeful for a positive future due to ethical and rational decision making. But I also accept that with COVID and climate change, we have limited time before either our systems fail, or we compel change through stringent regulation and constraints on business operations. I do see more evidence of attention to ‘doing the right things’ in business but there is a need for key actors in supply chains to compel their upstream and downstream partners to adopt more sustainable practices.Maybe supply chains will save the world! Certainly, political will is far from where it needs to be, but looking at what the Fortune 100 companies are trying to do to drive sustainable and responsible practices across their complex global supply chains, I remain positive!

 

Simon Croom, PhD, is a professor of supply chain management at the University of San Diego School of Business. He is one of the most cited professors in his field with a long list of publications including Integrating Sustainable Practices Within Supply Chain Management: A Systems Perspective and Impact of Social Sustainability Orientation on Operational Outcomes. Professor Croom is also the founding executive director of the USD Supply Chain Management Institute and served as the academic director of USD’s master’s in supply chain management program for five years. He currently teaches supply chain classes in USD’s MBA and in the Master’s of Supply Chain Management program.

Contact:

Renata Ramirez
renataramirez@sandiego.edu
(619) 260-4658