Jonathan Thatcher, CSCP | November/December 2012 | 22 | 6
Bridge the shop floor and upper management to meet green goals
Reader V.M. writes, “My company is trying to build a greener supply chain and has brought in outside auditors to assist. However, many of us feel the goal is just to generate more business rather than become sustainable. What’s the right approach?”
An organization’s inability to carry out meaningful sustainability goals could be a symptom of immaturity—the uncertainty of performing in an unfamiliar area. Additional hurdles include competing priorities and managing trade-offs among stakeholders. For example, a focus on a greener supply chain might divert focus from a cheaper or more agile supply chain. Outsourcing is a common result, which puts demand for oversight on partners, whose capabilities often are already stretched thin.
The rewards for implementing a greener supply chain are the positive impacts to the triple bottom line of people, profit, and planet. This includes reductions in energy and raw materials, increased transparency, boosts to skills and productivity of staff, and less pollution. It also might mean a better alignment of strategy and tactics.
APICS research points to a gap between senior management and the factory floor, where strategy from the top is not executed seamlessly at the tactical level. One approach that can help keep the vast scope manageable and bridge the gap between strategy and tactics is to examine opportunities in the three time horizons of the short, middle, and long term.
The short term: tactics. In this stage, the focus is on tangible elements, such as reducing supply chain waste, overcoming inefficiency, and eliminating unnecessary tasks. This also is the time for investigation and analysis, brainstorming among team members, and redesigning supply chain functions and tasks according to best practices and predictive data.
In the short term, goals include making sustainability more visible on the factory floor. Map tasks and functions against strategy, essentially auditing tactics and the purposes they serve. Here, the biggest question is this: How well do your tactics serve organizational and green strategy?
The midterm: tactics and strategy. In this stage, examine investments in plant and equipment, attainable requirements and specifications, contracts, and the end-to-end supply chain. Explore the goals and results of projects and budgets. Reexamine the logistics of inventory locations, service levels, and more. Sustainability reporting is important: Examine industry standards such as ISO 26000, ISO 14000, and the Global Reporting Initiative.
Look at the supply chain network in terms of priorities and trade-offs. Ask yourself: Do your supply chain partners match your priorities? Is the supply chain making full use of existing strengths? Are lesser strengths creating blind spots?
The long term: strategy. In the long term, focus on engaging senior management and attaining their support, leadership, and resources. Green goals should become aligned with organizational strategy and the supply chain strategy that serves it. Further coordinate sustainability activities with forecast markets, future product families, and planned facility capabilities and locations. Leverage the long-term information technology systems needed to get the job done. A little help from your friends
One key discovery from the 2012 APICS sustainability survey is that organizations successful in implementing sustainability strategy have a sustainability champion to drive change. These champions find allies in the company to help them achieve green goals. Individuals from groups involved in lean, risk, finance, marketing, and others with an interest in green supply chain advancement make the best candidates for becoming allies.
Allies bring the most benefit by
- gathering supporting information across the supply chain
- creating strong lines of communication among supply chain partners and stakeholders
- finding opportunities to lend resources to green projects
- aligning business unit and supply chain strategies.
What works best for you will depend on opportunity, capability, and your organization’s strategies. By tightly aligning your plans with organizational strategy and the tactics on the shop floor, you will be in a good position to make a tangible difference, now and in the years to come.
Jonathan Thatcher, CSCP, is director of research for the APICS professional development division. He may be contacted at firstname.lastname@example.org