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Lessons from Apple and Walmart: 4 ways to really cut supply chain risk
April 9, 2015
Lessons from Apple and Walmart: 4 ways to really cut supply chain risk
Sumit Kumar
Thursday, April 9, 2015 - 2:00am
Recent history has presented many examples of well-known companies — Apple, Walmart, Target, Primark and Tesco, to name a handful — facing the ire of customers, investors and governments due to flaws in their supply chains.
As a result, it is increasingly clear that unsustainable supply chains can have negative reputational, as well as financial, implications. That realization is now elevating the sustainability of supply chains for organizations worldwide.
Part of the credit for this increased awareness also goes to organizations such as the Carbon Disclosure Project and Global Reporting Initiatives for sharpening the focus around these topics.
Unfortunately, however, the approach to achieving sustainable supply chains has become a stereotype, as most organizations end up only meeting baseline compliance.
Purchasers go by clichéd “sustainable procurement guidelines” that list expectations from suppliers on common sustainability parameters and act as a screener at the time of on-boarding a supplier. But this approach defeats the purpose, especially for critical suppliers, because of its inherent limitations:
1. A straitjacket approach for all suppliers results in weak guidelines, which mostly seeks basic compliance to environmental, labor and human rights laws.
2. Once that weak guideline is met, there is little incentive for the suppliers to improve their performance.
These shortcomings then create a situation where neither the buying organization nor its suppliers are focused on improving the sustainability performance of suppliers beyond basic certifications.
Read more at GreenBiz.
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