Wednesday, 25 November 2015

What are the ingredients of a sustainable supply chain strategy? Part 3

(Ingredient 3 - Implementation of Economic, Environmental, and Social Objectives)

In adapting “new” supply chain objectives on environment and social goals, it is necessary to implement integrated long term objectives into the short term operational goals. The implementation process usually involves a KPI system which is used to implement the strategic goals into the operations of the company.

The KPI system is a quantitative tool which can influence the strategy implementation but the challenge for the supply chain managers is to break down the goals into the correct KPIs and set targets for set time periods. It may be necessary for trade-offs to be made if the new goals conflict with other goals. Having the ability to translate strategic goals into operations via an adaptive and intelligent KPI system is something that is achieved by the best practice companies. These KPI systems will look at the trade-offs between the social, environmental and economic goals.

In order to be successful, it’s necessary for the top management to commit to the decided goals. Social and ecological goals and financial figures are linked. Sustainability practices require it to be fully financed and be able to pay back the finance in an approved time span. The sustainable strategy should not to be confused with the social strategy of the green strategy as they are all separate.

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