Report: Businesses need 'net positive' supply chains to thrive
- Businesses should push forward goals to achieve "net positive" supply chains, to help global industry thrive in the long term, a report from The Wharton School of the University of Pennsylvania, the Initiative for Global Environmental Leadership (IGEL) and CHEP found.
- The concept of net positive is to not only reduce the carbon footprint of the supply chain, but also to actively restore and regenerate resources critical to business operations.
- The report said collaboration with suppliers and within organizations is essential for gleaning net positive results, but each company will have its own approach and strategy related to its unique supply chain.
Supply chain managers working for companies advocating for the net positive supply chain are in an enviable position to effect progressive environmental impact. Yet, the pressure of these largely public companies to meet their financial and operational benchmarks is critical.
This balancing act may result in companies finding themselves at odds with the very suppliers on which they depend. The pressure to adopt net positive strategies is pushed through the supply chain, forcing at minimum tier one suppliers to adapt their business strategies to meet the needs of the large customer.
This causes significant tension within the supplier community. Do they adopt their company strategies to meet the new needs of their large customer, or do they continue on with their own business strategy?
When Motorola won the first Malcolm Baldrige National Quality Award in 1988, it required all of its tier one suppliers to apply to win the award or risk losing the customer's business. The theory was that overall supply chain quality would increase if companies adopted the MBNQA framework as Motorola had.
As an employee of a prime supplier that acquiesced to Motorola’s demand, I notified my prime suppliers of their need to embrace it as well. I was not prepared for the negative response. My suppliers were more loyal to their own businesses models and rejected changing their strategies to curry favor with a customer’s mercurial request.
While the net positive supply chain effort may be broad based and have increasing business and societal support, supply chain managers should be aware of the impact on the supplier community. Resistance to cause based initiatives may be stronger than they suspect.