Come, join the data chain

EHS managers are increasingly being required to look outside their own companies

and to the environmental risks and cost-saving opportunities within their supply

chain.

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.

Past relationships

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

  opportunities;

• 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.

Traditional barriers

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

normally taken.

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.