Supply Chain Sustainability and the Scorecard

This post is sponsored by the University of San Francisco’s Supply Chain program. Learn more about the program and their focus on sustainability at the end of the post.

Don’t Let Suppliers Rack up Bogeys on Your Sustainability Scorecard

A sustainability scorecard is a system for companies to measure the sustainability of their different suppliers.  These scorecards typically measure recyclable materials, water and energy use, greenhouse gas emissions and various forms of waste for the complete supply chain.  Companies with high marks on their scorecard are demonstrating their commitment to supply chain management best practices to their stakeholders.

At this point a sustainability scorecard isn’t required of businesses, but more and more companies expect that as time goes by, more and more of their customers will be requesting information on the organization’s carbon footprint. Those that do collect data and analyze their supply chain will certainly see some benefits.

Who is Leading the Way?

Wal-Mart

Wal-Mart has implemented a broad, corporation-wide sustainability initiative called the Wal-Mart Packaging Scorecard.  This software tool grades the company’s packages on how environmentally friendly they are, and buyers can now use this online tool to help with their purchasing decisions for all the store’s products.

The environmental impact of the package is now as important as the product inside it, and through this initiative, Wal-Mart plans to reduce its supply chain packaging by five percent over the next two years. This type of scorecard is available to all buyers, and allows them to make informed decisions about their purchases.

Proctor and Gamble

This company is using a new scorecard that will help pinpoint the areas where increased effort is necessary to achieve long-term sustainability.  Proctor and Gamble’s ambitious vision contains several objectives that will help its sustainability score grow:

• To have all its plants powered by 100% renewable energy
• To use 100% recycled or renewable materials for all its packaging and products
• To have zero waste going to landfills from its factories and consumers
• To manufacture products please consumers while also maximizing conservation of resources

Proctor and Gamble’s scorecard is an excellent example of how a sustainable initiative can begin with the retailer then move down the supply chain.

IKEA

IKEA recently introduced its Sustainability Product Score Card, which helps the company stock its shelves with the greenest furniture products possible.  This method rates the individual products and not the suppliers; however, if the products themselves are sustainable, then the supply chain would tend to be more or less sustainable as well.

IKEA’s Score Card contains a list of product criteria, such as renewable energy during production, energy efficient production, recycled material and other more general requirements.  Unlike Wal-Mart, IKEA customers will not have access to the score card; instead the company will use it internally to measure its own progress and the sustainability of its products. Over the next several years, IKEA hope to be able to label its entire inventory of home furnishing products as 90% sustainable.

Why are Sustainability Scorecards Important?

Scorecards allow organizations to clearly define, measure and communicate their sustainable vision to the public.  They identify how their sustainable goals are an integral part of the organization’s larger mission, and provide a means to monitor sustainability in a formal, measurable and ongoing way.

A commitment to sustainability sends a clear message to your consumers that you care about your company’s impact on the environment. Supply chain analysis can lead to exciting new innovations, cost savings, reduced energy use and waste streams, better brand reputation and increased business opportunities for your company.

University Alliance submitted this article on behalf of The University of San Francisco’s online program. The University of San Francisco provides all the tools and resources necessary to gain a sustainable supply chain management certification online.

For further information please visit http://www.usanfranonline.com.