E&M Supply Chain Sustainability Remains a Key Trend

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Sustainability has been a growing trend in recent years, and according to a new report from DHL, it’s not going away anytime soon. Supply chain sustainability will remain a key focus among supply chain managers in the engineering and manufacturing (E&M) sector for another decade, the report, titled “Engineering & Manufacturing 2025+ – Building the World,” stated.

In the next 10 years, sustainability will increasingly become a means of remaining competitive. E&M sector leaders surveyed for the DHL report said sustainable management will continue to be looked at as a source of competitive advantage, instead of simply being a “matter of compliance,” the report said.

The demand for higher sustainability practices is hitting these E&M companies from all sides. Consumers want more efficient products that leave less of an impact of the environment. In response, the government is issuing more stringent carbon emission standards. Company shareholders, too, see sustainability as a means to improve efficiency and possible cut costs, the DHL report pointed out.

“With global warming reaching previously unseen levels, virtually all stakeholders are putting increasing pressure on E&M companies to become ‘greener,’” the report said.

Because of this pressure, the report said that by 2025, the E&M sector will have adopted environmentally friendly manufacturing processes and taken other sustainable approaches like green purchasing and using more fuel-efficient machines. Energy efficient practices for industrial production alone would have a significant impact. Industrial production accounts for 30% of the world’s total energy consumption. But by adopting more energy efficient practices, the DHL report said industrial production could reduce its energy use by 26 exajoules a year by 2030, which is “the equivalent of today`s annual electricity consumption of the U.S. and China combined.” The report again pointed out the driver for companies to take steps in energy efficiency is the rise in consumers demanding more products manufactured in sustainable ways.

Sustainability Plays a Role in Staffing, Too

As the DHL report and many others have shown, consumer demand for more sustainable products is continuing to rise. And, to remain competitive, smart supply chain managers are taking a closer look at sustainability practices. However, another report, this one from Yale University, the World Business Council for Sustainable Development and the Global Network for Advanced Management, found companies need to move toward sustainable practices to attract top talent, too.

The survey of more than 3,700 students at top business schools showed nearly half would chose a lower salary if it meant working for a company with better environmental environmental practices. About 20% also said they would not work for a company with bad environmental practices despite what the salary was.

As the labor shortage in the supply chain and procurement world continues into 2016, it’s clear supply chain managers would be wise to consider making sustainability a focus for the new year and beyond.

First Voice

  1. David MCCLINTOCK:

    This makes me wonder: What indicators are those prospective recruits using to make their judgement on “sustainable practices’ at those companies? Two other key Corporate Responsibility criteria are human rights and ethics – where do they stand on those issues?

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