Simple Steps to Tackle Complex Supply Chain Sustainability Issues

Philips-Van Heusen has what Kiku Loomis, its Director of Operations & Licensee Compliance, Global Human Rights and Social Responsibility, calls a "medium-sized supply chain." This despite the fact that, as the world's third-largest apparel company, parent of brands like Calvin Klein, Van Heusen, Izod, Tommy Hilfiger and many others, PVH has 750 active vendors, 1,750 active factories, and conducts around 3,000 audits per year.

It can, as you might imagine, become quite a burden to manage the daily activities of this supply chain, but whether your supply chain is significantly larger or significantly smaller than PVH's, the same challenges persist: Gathering all the relevant data from suppliers, auditing suppliers' performance, and working with stragglers to protect a company from operational and reputational risks.

In order to take a look at the ways that PVH and other companies are managing the increasingly complicated supply chains driving the global economy, GreenBiz.com last week convened a free webcast on reducing supply chain risks and achieving environmental, social and regulatory compliance.

The webcast, sponsored by Enablon, brought together Paul Baier of Groom Energy; Kiku Loomis; and David Hoffman, Enablon's Responsible Supply Chain Specialist. The three talked about the main drivers of supply chain management across industries, and then looked at how Philips-Van Heusen has put Enablon's RSC software to work in its global supply chain.

To begin, Baier laid out the five key drivers that are still moving companies toward comprehensive supply-chain management -- despite the negative impacts on the market from the recession, climategate, the lack of cap-and-trade legislation, and a general diminishing of consumer green sentiments. The drivers are:

  • Requests from top customers (Walmart, P&G, Pepsi, etc.)
  • Improved brand- and company-level images
  • Cost savings -- energy and carbon are the flip sides of the same coin
  • Investor pressure
  • GHG regulations, like California's AB32

A poll of the the audience of the live webcast (the presentation is archived and still available for free viewing for a year) found that the top driver for supply chain performance management is to identify and mitigate supplier risk (50 percent), followed by enabling cost savings (36.3 percent) and reducing your carbon footprint (31.8 percent).

Enablon's David Hoffman walked the audience through the challenges, old and new, around increasing transparency within an organization's supply chain. Whether employees are facing old challenges like a lack of resources and overwhelming complexity or new challenges like carbon footprinting or product traceability, the latest generation of supply chain software can help make the project more manageable.

But more than anything, the first step to addressing the challenge of supply chain management is to change how your company focuses on sustainability.