Recently, the American Productivity and Quality Center (www.apqc.org) completed a supply chain planning benchmarking study on the characteristics of supplier-focused carbon management programs. Interestingly, APQC reports that almost one-half of the companies in its study reported that they do not have a strategy for making supply chains more environmentally responsible through supplier selection and contracting strategies. Even in the carbon-intensive transportation supplier vertical, only 17 percent of companies said they strictly evaluate this supply category for carbon emissions, energy consumption and carbon mitigation strategy (fully 41% said they don’t evaluate or evaluate “to a little extent”).
On the other hand, the study did show that supply chain management costs and staffing levels varied greatly with the intensity of the company’s focus on supplier carbon management practices. While companies that focused on supplier practices had more full-time equivalent employees in their supply chain management (SCM) team, they actually spent less on SCM per $1,000 revenue than those that had no focus on suppliers’ carbon capabilities. And, interestingly, companies that focused on transportation providers, specifically, got better shipment delivery time than those that did not (granted, they also spent more on logistics management).
What does this study show? APQC claims that the evidence points to the benefits of having visibility into supplier practices. Maybe, they say, the companies that integrate analysis of carbon management practices into supplier relationship management have better, collaborative relationships with their logistics and other suppliers. Although the APQC study did not ask this question specifically (and, therefore, drawing these conclusions about causality is a stretch), it does seem plausible that SCM teams that dive into supplier carbon practices probably learn more about supplier capabilities and limitations, build deeper relationships and, for long-term relationships, choose to work with suppliers that are amenable to meeting strict customer demands.
The APQC study can be accessed here: APQC study.