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Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Editor-in-Chief
Dr. Arindam Chaudhuri
A.Sandeep Editor's Desk
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Is your Supply Chain On The Right Track?
In Order to be Truly Sustainable, Supply Chains have to Operate within a Realistic Financial Structure as well as Contribute value to The Society
Issue Date - 28/07/2011
More than ever before, supply chain managers are confronted with dynamic, complex and interrelated global supply chains, increasing the strategic importance of management decision-making. In order to respond to the environmental and social challenges and yet remain competitive, supply chain managers need to be able to identify and understand new developments and their potential impact on their company and customers, as well as the wider environment. While there is much greater access to advanced technology, corporate performance measurement systems still largely focus on local, economic measures, rather than wider social or environmental measures. There is significant scope for improvement here but the cost of introducing new, all-encompassing systems is expensive and prohibitive for many within a supply chain network.

There is no doubt that well-educated and talented supply chain managers exist, but high labour costs in developed parts of the world such as Europe, combined with a cost focus in supply chain management, potentially constrains the overall level of talent involved. The modern supply chain manager does not just manage logistics processes, but also people, products, knowledge and infrastructure. Perhaps more importantly, such issues must be managed across the supply chain, within and between companies, for the goal of sustainability to be achieved.

Although infrastructure development may act as a constraint on all competitors equally, legally enforceable standards may constrain poor performers from operating when such standards are relevant but constrain good performers when they are not. There are always opportunities to improve on existing standards and these may prove hugely important in the drive towards greater sustainability across all supply chains, whether legally mandatory or voluntary. However, this greatly depends upon the relevance of such standards. Irrelevant standards threaten the progress made towards sustainable supply chains, especially in cases where the standards are not easily visible or exposed. For example, when non-legal standards are imposed upon a supply chain by a dominant player, they may make good sense for the dominant player but not for the overall supply chain.

Thus, issues of standards and infrastructure development require firms to be aware of and anticipate the attitudes and actions of other relevant actors, including suppliers, service providers, customers, governments, local communities and NGOs. Managing for such externalities is an extremely complex process. The regulatory environment of supply chains has become highly complex and increasingly challenging for supply chain managers. The best practitioners regularly modify and adapt the management and design of their supply chains to reflect these changing conditions.

In conclusion, the need to develop sustainable supply chains is widely recognised – the challenge is how to make this happen! It cannot involve a wish-list of impractical choices. It will result from the aggregation of decisions taken by all those involved in supply chain management today, from the raw material extractor to the consumer.

Coordinated By : Sanchit Verma


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