Executive Briefings

Supply Chain Sustainability Important, Survey Finds, But Execs Say Cost Outweighs Environmental Benefits

While most executives recognize the importance of supply chain sustainability, cost is still a major factor and trumps environmental impact as a driver of behavior, according to a survey of 150 C-level and senior leaders at U.S. and European companies, according to AlixPartners, a global business-advisory firm. However, those that can implement cost-effective sustainability strategies and effectively market them to customers will have a competitive advantage.

Supply Chain Sustainability Important, Survey Finds, But Execs Say Cost Outweighs Environmental Benefits

Among the findings of the survey:

"¢ 84% said that cost is the "top inhibiting factor" when it comes to implementing more sustainable supply chain initiatives. In fact, 70% said that they could pay no more than 2% for sustainable supply chain initiatives.

"¢ For companies that made efforts to "green" their supply chain in 2012 the top three methods were: (1) expansion of programs to recycle raw materials [42% did this in 2012], (2) consolidation of LTL shipments to truckload shipments [42%], and (3) introduction of energy conservation programs or solar energy [32%].

"¢ Financial ROI is key in the U.S. (less so in Europe). Only 31% of U.S. executives said that they would be willing to invest in "green" logistics initiatives that do not produce positive financial ROI, while 62% reported a willingness to invest.

"¢ However, lack of ROI is the largest obstacle to achieving greater supply chain sustainability. Sixty-five percent cited this as the greatest obstacle.

"¢ Fifty-three percent of executives see (1) freight consolidation and (2) network optimization as the sustainable supply chain initiatives with greatest opportunity for financial ROI.

Source: AlixPartners

Among the findings of the survey:

"¢ 84% said that cost is the "top inhibiting factor" when it comes to implementing more sustainable supply chain initiatives. In fact, 70% said that they could pay no more than 2% for sustainable supply chain initiatives.

"¢ For companies that made efforts to "green" their supply chain in 2012 the top three methods were: (1) expansion of programs to recycle raw materials [42% did this in 2012], (2) consolidation of LTL shipments to truckload shipments [42%], and (3) introduction of energy conservation programs or solar energy [32%].

"¢ Financial ROI is key in the U.S. (less so in Europe). Only 31% of U.S. executives said that they would be willing to invest in "green" logistics initiatives that do not produce positive financial ROI, while 62% reported a willingness to invest.

"¢ However, lack of ROI is the largest obstacle to achieving greater supply chain sustainability. Sixty-five percent cited this as the greatest obstacle.

"¢ Fifty-three percent of executives see (1) freight consolidation and (2) network optimization as the sustainable supply chain initiatives with greatest opportunity for financial ROI.

Source: AlixPartners

Supply Chain Sustainability Important, Survey Finds, But Execs Say Cost Outweighs Environmental Benefits