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Beyond Supply Chains Empowering Responsible Value Chains

 
Sectors : Entrepreneurship, CSR and Sustainability,

Published by: World Economic Forum

Publication type: Report

Published on: 2015

 
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The supply chain development of multinational companies can impact both the environment and local economies, especially in emerging markets. This impact can be positive or negative depending on factors including: market pressure to lower costs and the extent to which companies are focused on responsible supply chains. To ensure the impact is positive, leading companies are looking to adopt what we call “the triple supply chain advantage” – where companies achieve profitability while benefiting society and the environment.

Our report, Beyond Supply Chains examines how companies strive for this triple advantage and looks at how they intend to achieve it. The report identified a comprehensive set of 31 proven practices, underpinned by industry examples that provide guidance for companies looking to codify their own specific portfolio of triple advantage improvement measures. By implementing these triple advantage practices, we show significant potential benefits achieved (modelled initially on consumer goods supply chains):

– Profitability: Revenue up lift of 5-20%; supply chain cost reduction of 9-16%, brand value increase of 15-30%, significant company risk reduction

– Local development and societies: Improved customer health, local welfare and labour standards (wages, working conditions)

– Environment: Carbon gas reduction of 13-22% on overall footprint Beyond Supply Chains has developed a decision framework that prioritizes the identified practices by their potential to create triple advantage.

Although the model uses consumer goods companies as a reference, it can be tailored according to the conditions of a specific industry or an individual enterprise (e.g. its “social archetype”). But even the triple advantage has its limits because the concept implies a supporting business case. Yet when talking about human rights, a commitment to ethical principles should outweigh financial justification. In this context, the report discusses how to ensure fair wages throughout supply chains and looks at policy changes required to support companies looking to optimize across the three advantage areas.

Download the Full Report Here

- World Economic Forum and Accenture
 

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