Come, join the data chain
You won't be surprised to hear that much of your company's environmental impact is outside your control. On the face of it, that's probably good news. However, many of the potential associated cost saving opportunities are also hidden somewhere in your supply chain. Tim Dowling, AEA Technology, on information shared.
EHS managers are increasingly being required to look outside their own companies
and to the environmental risks and cost-saving opportunities within their supply
Unfortunately, it’s unlikely that EHS managers will be able to secure more
time for supply chain management – so they should consider using software to
manage the information more effectively.
EHS managers are now facing growing pressure to reduce the environmental impact
within their supply chain and to reap some of the cost benefits for their organisation.
What do EHS managers understand by Supply Chain Management (SCM)? It’s about
managing and reducing risks to you, the ‘host’, from suppliers, contractors
and, increasingly, customers. Whilst there’s undoubtedly a handful of blue chips
engaged in social and ethical SCM, for now the majority of companies appear
to be looking at environmental issues first before moving on to the more controversial
and less well-trodden ground of social and ethical.
Past relationships with suppliers have primarily been built around a ‘purchasing’
model: host companies have specified ‘green’ criteria for incoming materials
and service which suppliers and contractors have contractually had to meet.
Now, as companies reduce their supplier lists, outsource core activities and
use eco-efficiency to drive customer cost-savings, the emphasis is shifting
to sharing knowledge and expertise with suppliers and contractors to improve
supply chain performance. But where do you start?
- identify the risks posed by suppliers/contractors and the cost-reduction
- clearly identify the issues to be managed;
- get senior management commitment; and
- agree approach with selected supply chain partners: the issue(s), the performance
objectives, joint communications, confidentiality.
At the outset, the type of issue to manage is likely to be akin to
those already being addressed in-company: production and disposal of wastes;
transport and logistics; packaging; energy and water. But the other steps shouldn’t
be rushed in order to ‘get something moving’. Experience shows that lasting
SCM projects are based upon a good mutual understanding of the issues and benefits
and a relationship built around openness and trust.
So far so good. Where many companies seem to falter is in getting
the project rolling and generating benefits before the rug is pulled from beneath
the EHS manager’s feet. This is often due to the inability to access and use
data and information for setting a baseline and for subsequent measurement and
reporting of improvements.
Issues to consider in SCM data management:
- Is data collected and stored in a consistent format?
- Can all relevant parties in partner organisations rapidly access data?
- Can the data be easily and professionally presented?
- Is shared data controlled and secure?
- Is the data auditable?
Using the structured approach of management systems such as ISO 14001 will
help manage supplier questionnaires, but will provide little hard data to see
how effectively issues are being addressed. This information gap is now being
filled by software that reduces the time EHS managers need to spend to make
the SCM process work and helps focus on achieving the benefits that both parties
initially sought. Environmental Data Management Systems (EDMS) now give companies
the ability to draw into a single point large amounts of data, from where users
can rapidly check and report upon performance.
Technology developments also mean that traditional geographical or organisational
barriers no longer exist and data can be entered and accessed remotely, including
via secure websites. Such systems can save more than 75 per cent of the time
As for the future? As companies become more sophisticated, the numbers of SCM
partners a ‘host’ has will be expanded and software will enable supply chain
benchmarking. This will most likely be followed by a move to incorporate the
social and ethical dimension into SCM, and finally to SCM developing a specific
focus around products rather than overall performance.
SCM is not new to industry. It is, however, only relatively recently that experience
of managing environmental issues in the supply chain has shown that taking time
to address its hidden risks and locked-up value can help your company realise
the next wave of real environmental and cost benefits.
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