The mounting pressure to conduct business in a sustainable fashion comes from various stakeholders – customers, shareholders, boards, employees, governments, and NGOs – and most corporations respond in a reactive and piecemeal way.
They demand that suppliers change their materials to environmentally friendly ones. They ask suppliers to move manufacturing operations closer to end market to reduce transportation-related carbon footprints. And they tweak their own operations by replacing ordinary light bulbs with compact fluorescent lamps, recycling more of their materials, refurbishing and reusing products, using more energy – efficient equipment, and so on.
These actions are called substitutions’: swapping one material, vendor, location, production step, or mode of transport to another. Although each change might seem worthwhile, such actions can, when you factor in the unintended consequences, end up raising financial, social, or environmental costs and lead to chaotic supply chains or supply chains that are not actually sustainable.
Instead, companies-throughout the supply chain, not just at the end- should take a holistic approach to sustainability and pursue broader structural changes than they typically do. This is where DGS comes in. We assist our customers to engage in sustainability through a holistic approach. These may include sweeping innovations in production processes, the development of fundamentally different relationships with business partners that may evolve into new service models, and even collaboration with multiple companies to create new industry structures. DGS’s experienced consultants will work with you all through the way to ensure your sustainability initiatives and projects are not reactive and piecemeal, but rather sustainable and value adding.
“Clearly, sustainability issues are adding complexity and risks to the already daunting challenge of managing global supply chains. This suggests that companies need to pursue structural change much earlier than most currently do.” Hau .L. Lee (Professor @ Stanford Graduate School of Business)