The Mystery at the Center of the Sustainability Universe

Nowadays, no self-respecting company is without a sustainability strategy, and at the center of these strategies lies the supply chain. 

Yet, we’re not sure exactly what constitutes a sustainable supply chain. Moreover, it’s not clear what resources companies are devoting to sustainability in their supply chains and the extent to which they are under pressure to disclose and achieve their goals in this area. 

End-to-end influence

These anomalies are all the more puzzling when one considers the full scope of the supply chain’s involvement in promoting sustainability at the corporate, societal, and even planetary levels. 

As I state in my book Balancing Green, When to Embrace Sustainability in Business (And When Not To), (The MIT Press, 2018), “Implementing sustainable practices falls on the shoulders of supply chain managers. The design and management of supply chains play a dominant role both in creating and in mitigating the environmental impacts of sourcing, manufacturing, transportation usage, and the disposal of all products that sustain and improve peoples’ lives.”

The critical role that supply chain management plays in sustainability programs pitches the profession into the endless debate over the viability of a sustainable future. Again, I cover this ground in my book: “Supply chain management processes are caught in the crossfire between the tensions of economic performance, natural resource stresses, societally acceptable practices, and regulation.”

For most companies, the majority of greenhouse gas emissions are generated in their supply chain. Poor labor conditions, the employment of child workers, and human trafficking are among the social ills that lurk in supply chains.  Daily newspaper headlines and various reports call out these growing and often hidden practices, inflicting substantial reputational damage on companies. Moreover, supply chain management is at the center of critical resource issues, such as how to reduce the ever-growing mountain of plastic waste that clogs our oceans. 

Under the microscope

A vast amount of research is carried out to gain a better understanding of these issues and to help companies improve the performance of their supply chains. Here are some examples from my organization, the MIT Center for Transportation & Logistics.

MIT CTL is engaged in a research project for a major manufacturer that wants to reconfigure its supply chain to support its goal of recycling more plastic. The project is looking at the opportunities offered by e-commerce to return used packaging and end-of-life products. In another project, the center is investigating how companies are increasing transparency in the supply chain to minimize or even eradicate illicit practices. This work links with a joint research project between leading manufacturer P&G and the Malaysia Institute for Supply Chain Innovation, a member of the MIT Global SCALE Network, that is enabling greater visibility into the raw material supply chain and helping small-holder palm farmers to improve sustainability. 

Companies are translating work like this into ground-level changes. An example is Coppel, one of Mexico’s largest retailers. Coppel is rolling out a program to reallocate its last-mile delivery fleet. A pilot project based on MIT CTL research showed that by matching vehicles to different types of delivery routes, the company could improve the fuel efficiency of vehicles by as much as 20% (see the MIT CTL blog post An Alternative Route to a Fuel-Efficient Last Mile for more information on Coppel’s plans). 

New spotlight on sustainability

In combination, projects like these make contributions to sustainability worldwide, but we need more information on their effectiveness. For example, which actions and projects deliver the most bang for the buck, and how much are companies investing in supply chains that minimize their environmental impact and support positive social conditions? At what point do such investments render a supply chain sustainable? 

These are not just academic questions. Companies, policymakers, and researchers would benefit from more precise information on the nature of supply chain sustainability and the best routes to take in meeting related goals. Such information also would help us to position supply chains in the broader sustainability movement. Although sustainability in its myriad forms generates intense interest across the globe, the role of supply chains in moving the planet towards a sustainable future is ill-defined.

MIT CTL has taken a step towards providing more clarity. The center has teamed up with the Council of Supply Chain Management Professionals to launch the annual State of Sustainable Supply ChainsReport. The report will tackle questions such as those described above, and help companies gain a better understanding of the importance of supply chain sustainability to their enterprises, industries, and the planet. And it will track supply chain sustainability activities annually. 

The data collection phase of the report kicked off on October 7th, 2019, with the posting of a 10-minute survey aimed at supply chain professionals across industries, regions, and positions. Practitioners who complete the survey will receive an advance copy of the report once available. The survey will remain open until November 1st, 2019, and the report will be available to respondents and collaborators in early spring 2020 and the general public by late spring. 

The results will make for interesting reading for stakeholders within and without supply chain management.