May 16, 2019
No matter the industry, managing sustainability in supply chains continues to increase in importance. The majority of companies’ risks and opportunities are often in their supply chains, and companies with supply chain sustainability programs have a leg up against competitors to mitigate risk, find cost savings through resource efficiency, drive innovation through supplier collaboration, and access finance and improve working capital. To take just one example of the link between supply chain sustainability and business risk, the WHO, ILO and UNDP have found that productivity losses related to heat-related workplace disruption and injury could rise above US$2 trillion by 2030.
As supply chain sustainability—also known as responsible sourcing, sustainable sourcing, responsible supply, or sustainable procurement—continues to evolve, companies must also stay abreast of the trends regarding best practice in order to build or maintain a competitive edge. At BSR, we have seen the shift from a compliance-based approach which started in the 1990s, to going beyond monitoring in the 2000s, and into supply chain transformation today. These trends align with overall management trends in the evolution of procurement and supply chain management, and companies need to navigate how to evolve with the times.
Evolution of Supply Chain Management and Supply Chain Sustainability
In order to help companies either start their journey in implementing supply chain sustainability or improve their existing programs, BSR developed the Supply Chain Leadership Ladder in 2017. The Leadership Ladder is a maturity model for companies to evaluate and evolve their approach to supply chain sustainability. Today, we are pleased to announce the launch of its update, the Supply Chain Leadership Ladder 2.0.
The Leadership Ladder helps illuminate a path to improved supply chain sustainability performance in the following ways:
- Providing a true assessment of the level to which a company’s existing supply chain and procurement practices integrate sustainability and are providing value across internal and external dimensions
- Ascertaining the company’s own level of ambition in driving supply chain sustainability: Does a company want to be driving impact, managing its most important priorities, or is it comfortable at the level of assuring compliance?
- Identifying concrete actions that the company can take to improve its program and approach, and to align with peers or leading practice.
The Leadership Ladder has four levels, reflecting the actions of companies across industries, as well as BSR’s informed vision for impact.
The BSR Supply Chain Leadership Ladder
Through anonymized assessment data of 32 companies, BSR found that the most common level of maturity across company programs is Level 2, Assuring Compliance. We work with companies at the Assuring Compliance level and help them identify opportunities to improve their programs. This can include identifying how to achieve better visibility of the most critical issues, categories of spend, and sourcing geographies in its supply chain; identifying the roles and responsibilities needed internally; or determining how best to engage suppliers and the supply chain workforce towards better outcomes.
The Leadership Ladder 2.0 incorporates learnings from our work with businesses across industries to assess and benchmark their approaches, as well as an external benchmark of the Leadership Ladder against other global frameworks.
We encourage companies to take a hard look at the opportunities to develop and evolve their approach to supply chain sustainability. As always, we welcome feedback and conversation on the new version of the Supply Chain Leadership Ladder.
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