You Need to Start Planning Your Supply Chain KPIs - Yesterday

Published : January 16, 2015

business-people-planningIt's time for a quiz on your current sustainability / supply chain KPIs (key performance indicators) statisticss.

  • Do you know what type of boxes you're using to ship materials or finished products to your end consumer?
  • How about the average miles per gallon of your logistic provider's delivery trucks?
  • Does your warehouse use any energy-saving operational procedures?

Chances are you'd have to dig for these bits of knowledge, but they may currently be having a surprising impact on your supply chain KPIs / metrics, thanks to an increasing customer focus and demand for sustainability. Transparency isn't just for supply chains anymore, and customers are carefully scrutinizing their choices in providers— a crowded marketplace in virtually every industry gives them plenty of options, so give them a reason to choose you.

Assess Where You're Already Excelling

Did you pick up post-consumer content packing materials because they were inexpensive? You've stumbled into your first green bullet point, so give yourself a pat on the back!

Chances are you've already set something in motion— or your supply chain providers have— that makes an appealing case for your company as an eco-friendly option. The idea is to take this starting point, be it idea, procedure or material, and build your sustainable framework out from it. One action does not make a revolution, so you'll still need to put some effort into finding new and creative ways to stay green while staying in the black, but once you find your starting point you won't feel the struggle of starting from scratch.

Make Sure Your Sustainability Is... Sustainable

Sure, new packing peanuts created from, say, soy-based organic industrial castoff sounds great on paper, but if there's a change to the industry processing or a soy shortage, your impressive new sustainability efforts are in the wind. When looking for new ways to show off a green mindset to win over customers, don't go so far afield that you open yourself up to a shortage or PR liability— stick with tried-and-true to balance risk with reward.

Battery backups for solar energy, secondary material providers on standby and corporate phrasing that speaks to efforts rather than oaths— these will all give your company the flexibility to put your money where your mouth is on sustainability without betting the farm and tossing supply chain KPIs under the bus. 

Sustainability Isn't Just About Sacrifice

Will Green quotes HP's James John in a Supply Management article, citing his reminder that certain sustainability practices— such as using cloud computing to cut back on physical computerscan actually help a company while still giving them attractive talking points on green efforts. Additionally, Joe Gallick of Ameriquest points out that consumers have signaled that they're willing to wait longer for their product shipments if eco-friendly transport methods are being used. This willingness on the part of the consumer can be leveraged to close the cost or time gap sometimes associated with putting sustainability practices in play, provided it's properly communicated to the customer to begin with.

Sustainability has gotten a bad rap— thanks to clunky methodology in its infancy— as being a hurdle or obstacle that companies need to 'deal with' to stay competitive, but the truth is that it can help a company as much as the business it deals in.

There are a growing number of reasons to incorporate sustainable production and shipping practices, and a conversely shrinking number of reasons not to. Don't put your supply chain KPIs on the line by piecing out or paying lip service to sustainability instead of giving it the attention it deserves; you'll likely be pleasantly surprised at the positive difference it can make when it's properly in place in a supply chain.

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Topics: Supply Chain Logistics

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