What’s Better, Economics or Sustainability? Supply Chain Execs Are Divided

by | Jan 21, 2019

What’s more important to supply chain decision-makers: economic performance or sustainability? A new report indicates, at first glance, that profitability is the most important of all corporate sustainability objectives. However, when directly asked whether profitability or supply chain sustainability was more important, 60% gave equal priority to these objectives, with another 25% leaning towards sustainability.

Conducted by the Economist Intelligence Unit, the research, and analysis division of The Economist Group, and sponsored by supply chain software provider LLamasoft, the survey aimed to explore supply chain approaches and priorities in relation to manufacturing and retail sustainability.

The survey of senior executives in 250 manufacturing and retail organizations across the US, Latin America, EMEA, and APAC regions also found that:

  • Higher-ups are more likely to say cost is less important than sustainability; 67% of C-suite respondents said sustainability comes before profitability, while 55% of other respondents said sustainability comes first;
  • Growth opportunities, cost savings, and the importance of responsible business practices are the top drivers of supply chain sustainability, at 36%, 34%, and 33%, respectively;
  • Largest impediments to supply chain sustainability included increased costs (38%), difficulty in monitoring complex supply chains (29%) and organizational structure (24%).

LLamasoft CEO Razat Gaurav says making the right decisions in terms of a responsible supply chain requires both a “big picture view and a granular understanding of the end-to-end supply chain.” By using technology to build “digital twins” of their real-world supply chain, companies can see how the changes they make will affect outcomes, the supply chain design software executive says.


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