Global supply chains will deliver the shared value revolution
What does supply chain have to do with CSR and shared value ?
In many of my recent conversations with supply chain practitioners, an interesting question came up: ‘Where is the connection between global supply chain, corporate social responsibility and shared value?’
While the question itself is very good, it indicates that operating a corporate supply chain footprint is too often approached with narrow focus.
Connecting the dots
The major external challenge for gobal supply chain managers is demand volatility and proactively dealing with market uncertainties (both from customer markets as well as supply markets). Internal requirements to manage the supply chain in a more transparent, cost efficient and integrated way have led to supply chain transformation initiatives across a number industries. Transparency through better end-to-end planning processes, assurance of critical component supply and speeding up product launch processes have been high on the agenda. Given the current turbulence around government debts and the future of certain currencies, many corporate leaders are reverting to scrutiny around the inventory deployment practices.
To be able to provide the requested level of operational flexibility, a thorough review of the entire end-to-end supply chain is required. The starting point needs to be from a suppliers supplier through the entire organization to the end point of a customers customer. Only if all of the entities within this so-called ‘extended enterprise’ are understood, interdependencies and opportunities can be clearly addressed. So ‘connecting the dots’ with subsequent alignment of targets with capabilities, is a pre-requisite to be flexible and competitive.
Understanding and addressing both sides of the coin
From a sustainability perspective many companies have initiated Corporate Social Responsibility (CSR) programs, based on pressures/expectations from customers, NGO, interest groups and governments. While there are obvious differences in the level of CSR maturity across companies and industries, it is clear that the number of companies adressing sustainability in a reactive qay outweigh by far the ones that a proactive. This is a lost opportunity. Eventually addressing global supply chain issues and corporate social responsibility are really two sides of the same coin. It doesn’t make sense to look at them in isolation or to only address parts. Operations performance is closely intertwined with sustainability – both interface to the same touch points, across the globe and within local communities. A number of leading companies has understood this relationship and started initiatives to improve both operational performance as well as social reponsibility, creating shared value. Proactively integrating suppliers, partners, NGO, Foundations, Communities and Governments as stakeholder into the discussion provides an invaluable opportunity.
Move towards a proactive way of addressing shared value in your organisation
Moving towards the ‘shared value sweet spot’, where the interests of corporations, communities, NGO, Foundations and Governments are balanced, should be engraned into a companies mission and way of operating the business.
Be proactive about creating shared value – it is no longer optional, but essential for both economic and societal progress.