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Measuring Supply Chain Sustainability

sustainability-picOne of the mantras of modern management, ‘you can’t manage it if you don’t measure it’, certainly applies to supply chain sustainability. However, sustainability is often a moving target since everyone's supply chain is different. A good way to find some commonality as a basis for understanding the term is to take a look at how businesses measure it.

I reviewed supplier evaluation questionnaires from a couple sources, WalMart and Ceres. WalMart is a well-known supply chain master, and Ceres is a non-profit organization focused on improving supply chain sustainability. WalMart developed their tool to evaluate individual suppliers, while Ceres created theirs for use by any organization that needed it. There were many parallels between them.

At the highest level, Walmart focuses on Energy and Climate, Material Efficiency, Natural Resources, and People and Community.  Ceres’ covers much of the same ground with these categories: General Company Information, Environment, Social, and Governance. The Ceres document is far more detailed and has almost the feel of an audit checklist, while WalMart sticks with more general questions.

One key difference is that WalMart includes a section that explains why they ask the questions, what the tie is to their mission, and what positive effect the subject would have on the environment. It’s very instructive to see how this mega-retailer thinks as well as to note the scale of the impact of its suppliers. One example they provided was “By selling only 100% concentrated liquid detergent, suppliers will help save over 400 million gallons (of) water, 95 million lbs. of plastic, 125 million lbs. of cardboard and millions of dollars in transportation costs over 3 years. “ That’s pretty powerful and gives the supplier a good feel for how they can contribute to those goals.

Check out these examples of tools that organizations use to measure and evaluate supply chain partners on sustainability. They will help you understand why this topic is so immediate and important. The WalMart survey is located here and you can access the Ceres document here.  

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