Sustainability across the Supply Chain

The enterprise software leader SAP recently hosted a roundtable to discuss the challenges and opportunities for companies to extend their sustainability strategy across the entire supply chain. Hosted by SAP’s Chief Sustainability Officer Dr. Peter Graf, Executive Vice President and Chief Sustainability Officer, the panel included John Gagel, Manager of Sustainable Practices at Lexmark, Kevin Myette, Director of Product Integrity at Recreational Equipment, Inc. (REI) and Dr. Jay Golden, Assistant Professor, Duke University and Co-Founder/Co-Director, The Sustainability Consortium.

The panelist agreed that sustainability is an opportunity for companies to drive innovation and competitiveness.

Peter Graf, Chief Sustainability Officer at SAP, outlined three key reasons for companies to drive sustainability across the entire supply chain: win market share, find new sources for innovation, and decrease risk through better compliance.

Kevin Myette, Director of Product Integrity at REI agreed that “sustainability is the next quality and the next platform for innovation.” The discussion focused on the path that companies need to take to drive sustainability across the entire supply chain, including provide transparency, define common benchmarks and measurement.

“The challenge of sustainability is that it is very complex. You tug on one thing; you are pulling on something else,” stated Kevin Myette. According to Dr. Jay Golden, Assistant Professor, Duke University and Co-Founder/Co-Director, The Sustainability Consortium companies need to look at the science and analytics to verify claims that a product is greener than the ones of their competitors.

“Sometimes it can take digging down six or seven layers into a company’s supply chain to make changes,” stated John Gagel. For example, the U.S. financial legislation signed in July 2010 made it necessary for companies to disclose whether or not they use “conflict materials” in their products. Lexmark makes sure not to source tin, tungsten and tantum (key components of many hardware products and gadgets) from the Congo.

There are approximately 400 eco-labels in the market today. “Companies need a consistent way of measuring sustainability. They cannot afford to do it in twelve different ways,” said Jay Golden.

“Information technology is on the path to find solutions that can help companies cope with sustainability challenges. It can help create transparency, optimize processes and create life cycle analysis,” said Peter Graf.  According to Graf, today’s software technology can to track more than cost, time and quality; it can add specific sustainability criteria, such as carbon, water, and waste.