Forging New Links:

Enhancing Supply Chain Value Through Environmental Excellence

Supply chain management is evolving from a traditional focus on purchasing and logistics to a broader emphasis on value creation. Leading companies increasingly view supply chain excellence as a source of competitive advantage, with the potential to drive performance improvement in customer retention, revenue generation, cost reduction, and asset utilization. Cross-functional teamwork is essential to orchestrate the core supply chain business processes - managing relationships with suppliers and customers as well as managing the flow of goods, services, and information along the supply chain.

At the same time, the emergence of globalization, outsourcing, and corporate social responsibility, along with regulatory changes and security concerns, has made EHS excellence a key success factor. The scope of EHS is expanding beyond compliance toward value creation, and EHS issues can no longer be addressed in a reactive fashion. For example, manufacturers are increasingly expected to take responsibility for the end-of-life disposal of products and packaging. Likewise, anticipating safety and security risks and developing contingency plans is critical for assurance of business continuity.

Forging New Links demonstrates opportunities for EHS to create business value in the supply chain across a broad variety of industries. To realize these opportunities, companies need to foster improved collaboration between EHS and supply chain management professionals. Wherever appropriate, the EHS function needs to be integrated into cross-functional teams that are managing SCM business processes. Rather than EHS issues placing constraints upon the supply chain, EHS performance improvements ideally should be natural outcomes of a company's efforts to increase supply chain speed, efficiency, and continuity.

GEMI, June 2004