For manufacturing companies who want to advance sustainability across their operations, their supply chain and procurement processes are the key place to start.
Yet results from The Sustainability Imperative: an Agenda for Change, a report from Skill Dynamics, show that 38% of manufacturers admit that after traditionally prioritising cost over sustainability in decision making, there is a barrier to making improvements. 60% agree that it’s easier to focus on financial savings than sustainable initiatives.
More supply chain professionals in manufacturing are pushing for sustainable policies
The report surveyed 50 supply chain and procurement professionals across the UK and the USA who are working within the manufacturing sector.
Results showed that:
- 98% are implementing sustainability initiatives
- 80% believe sustainability is a part of their role
- 74% say they feel energised by the opportunity to advance sustainability improvements
- 58% entered their profession for this purpose
- However, 60% admit that prioritising sustainability above cost in decision making is difficult because the benefits are hard to track
- 46% of supply chain and procurement professionals feel they have a high level of responsibility for setting sustainability strategy and targets
Leaders in manufacturing need to invest in sustainability initiatives
Sam Pemberton, CEO of Skill Dynamics, is pleased that the data shows manufacturers are keen to grow more sustainable - but leaders need to do more work to move their business.
“Our data clearly indicates that manufacturing organisations are trying to become more sustainable. Of those supply chain and procurement leaders surveyed, 76% are implementing initiatives to reduce waste, and 60% initiatives to reduce energy consumption or switch to renewable energy sources. These percentages are the highest out of all the sectors we surveyed.
“However, leaders are also struggling against the same barriers to sustainability progress that we see across sectors. Chief among these is leadership reticence to invest in more complex sustainability initiatives or those where it is difficult to project ROI. Indeed, just 44% of the professionals we surveyed said that leaders were willing to sacrifice some profit to improve sustainability, compared to an average of 60% across all sectors.
“While this caution around jeopardising profit is understandable – especially as raw material and energy costs continue to increase – manufacturing leaders need to treat sustainability investments as intrinsic to business continuity. Supply chain and procurement teams are clearly ready to improve the sustainability of their organisations. Leaders need to recognise this enthusiasm as an asset, and do everything they can to equip and enable this group to drive progress in this area. This includes giving them the licence and resources to try new initiatives, and the training they need to make informed decisions.”
Professor Omera Khan, who authored the report, is the Executive Strategic Advisor to Skill Dynamics and the Professor of Supply Chain Management at Royal Holloway University of London.
“Supply chain and procurement professionals are being asked to improve the sustainability of manufacturing organisations, but few are formally being given responsibility for this, or being incentivised to drive progress. The vast majority (80%) say sustainability is an increasing part of their role, yet just 32% are rewarded for achieving sustainability targets. Manufacturers need to address this, because if supply chain and procurement professionals are not clear on their new sustainability remit, how are they supposed to fulfil it?”