In a recent article Mark Pagell and Anton Chevshenko (2014) argue that where sustainability used to be a fringe topic within (or outside) SCM, it should become an integrated part of SCM. Research tells that it’s not clear whose responsibility it is to do this: is it SCM, purchasing or procurement, CSR department...? Is it something that can be outsourced to third parties?

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Supply chain monitoring: strategy, organisation and competence challenges

From the researchers' point of view, it could be interesting to observe two separate streams of literature that examine similar supply chain problems but often in a disconnected fashion: on the one hand supplier assessment and development and on the other hand supplier monitoring and mentoring. The first is about how companies assess the operational performance of their suppliers using (typically) cost, quality and delivery metrics and the programmes they then put in place to try to improve supplier performance. The second is about how companies assess and improve suppliers' sustainability (or CSR) performance.

Supplier monitoring usually involves supplier audits and questionnaire filling and is normally divided into environmental and social criteria. The focus is on how companies help under-performing or non-complying 'at-risk' suppliers to root out any problems and create a change of supplier mind-sets (the mentoring part). So, traditional supplier assessment/development and supplier sustainability monitoring/mentoring are very similar challenges and the methods are quite similar but it’s often unclear where the organisational responsibilities lie and how the two challenges can be tackled as one rather than two separate challenges.

Where traditional supplier assessment and development practices are well developed and well documented in research, there is still a lack of knowledge about how to do supplier monitoring and mentoring. There are lots of standards and frameworks around but also much uncertainty about these and it’s a field in constant development.

In a keynote presentation at the 2014 IPSERA conference, Professor Mark Pagell made the point that researchers need to shift the focus from why companies should engage with sustainable SCM (supply chain management) to how they can implement sustainable supply chains. Interestingly, it's often why companies want to implement a sustainable supply chain that determines how they go about it. In other words, if the motivation is simply damage limitation, monitoring through audits and questionnaires is probably sufficient. However, if the motivation is more ambitious than that it seems that a more advanced strategy involving a more concerted collaborative effort is required.

In a recent article Mark Pagell and Anton Chevshenko (2014) argue that where sustainability used to be a fringe topic within (or outside) SCM, it should become an integrated part of SCM. This is mainly about academic field development but the same problem exists when we consider whose job it is to implement sustainable supply chains. Both research tell that it’s not clear whose responsibility it is to do this: is it SCM, purchasing or procurement, CSR department...? Is it something that can be outsourced to third parties? Nevertheless, it’s still a minority of companies that include sustainability as a core part of SCM and likewise few purchasing or procurement people see sustainability as their job.

Part of the challenge is the competence gap, so the best way to tackle this problem is to use a combination of both company practice wise and education wise.

 

This article originally appeared on Thomas Johnsen's LinkedIn profile. Thomas Johnsen is a Gianluca Spina Professor of Supply Chain Management at Politecnico di Milano. For the last 15-20 years his research has revolved around buyer-supplier relationships and supply networks.

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