PwC and the US association for supply chain and operations management (APICS) have surveyed its 37,000 members in a new study entitled ‘Sustainable Supply Chains: Making Value the Priority’, which details a number of benefits, such as cost reduction and lessened environmental impact, and identifies barriers to adoption such as a lack of boardroom support.
According to PwC and APICS when corporates broaden their perspectives on sustainability and adopt clear strategies to tap ethical, economic, social and environmental levers across their extended supply chains, new sources of value can emerge.
Barriers continue to impede widespread adoption, however, with a lack of leadership support a prime concern. Only 30% of APICS membership identified as operations executives surveyed late last year by US PwC – with the results only now being released – said that their company had a clear supply chain sustainability strategy, falling to 17% for managers. As a result, mid-level corporate managers, treasury and finance professionals are not able to take the steps needed to drive meaningful change in the supply chain, concludes APICS research Foundation, co-authors of the report with PwC.
More than a third of professionals (38%) also identified an inability to measure and monitor targets and goals as a further impediment to success, while 40% believe employee performance measurement and incentives are not properly aligned to supply chain sustainability results, perhaps engendering a lack of motivation.
The major barrier cited in the survey was that leadership does not supply the mandate, incentives, or resources to turn sustainability strategies into action. Supply chain professionals are also frustrated by inadequate sustainability education and training, according to the PwC / APICS analysis, and suffer from significant confusion about the scope and company goals surrounding supply chain sustainability. A perception that the impact on shareholder value for such practices is difficult to measure is also an on-going problem.
More encouragingly, despite the disconnect about sustainable supply chain strategies between the C-suite and mid-level management, 76% of operations respondents said their company focus on the field will increase over the next three years. Already, 43% of operations professionals attributed cost reduction to supply chain sustainability initiatives, while 35% reported improvements in their company’s environmental impact. Additionally, a quarter of all respondents reported improved customer satisfaction as a result of programmes tied to improving supply chain sustainability.
“There is a clear correlation, and in some instances causality, between sustainability and supply chain performance,” speculates Nic Delaye, a report author and director in PwC’s Sustainable Business Solutions practice. “Companies should aim to better understand the major dynamics of supply chain sustainability and how to overcome the obstacles that traditionally arise, in order to both improve their impact on society and create tangible business value in new ways.”
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