This offering draws on IBM's own experience running one of the largest, most complex supply chains in the world, including development of an expansive database covering 30,000 supplier locations in 60 countries to help collect and analyze data on a wide range of sustainability issues. This will allow clients to improve supply chain efficiency, lower costs, and reduce waste and environmental impact, and reporting sustainability information to business partners, regulators and other key stakeholders.
"A global supply chain with thousands of partners exposes a company to increased risk, waste, inefficiency, environmental impact and cost," said Eric Riddleberger, IBM's business strategy consulting global leader, who heads up the company's corporate social responsibility consulting efforts. "Being able to set sustainability standards and truly measure performance against them across such a large network is an enormous task, particularly in industries such as consumer products, retail and healthcare."
Companies are under tremendous pressure to continuously improve business performance and sustainability, and that extends to their entire supply chains. Inefficiencies and inconsistent practices can cause excessive use of energy, water and materials, increased environmental impact, variances in quality, product safety concerns and poor labor practices throughout the supply chain. These can lead to increased cost, compliance issues, and disenfranchising key stakeholders, such as customers, shareholders, partners, and current and prospective employees, who care about these issues.
To improve efficiency and consistency and reduce environmental impact, companies must use new "smart" technologies and processes that allow them collect and analyze large amounts of information from across their supplier networks. This allows them to apply uniform standards, measure compliance and performance, and take corrective action where necessary. IBM estimates that doing this effectively could improve supply chain efficiency by a minimum of 8 to 12 percent or more, with corresponding reductions in cost, environmental impact and risk.
But most companies are not equipped to do that kind of data collection and analysis, either within their own operations or across their supply chains. In IBM's 2009 global survey of c-level executives on green and sustainability, 29 percent of the respondents said they aren't collecting any of this data at all from their supply chains. Eight in 10 aren't collecting supplier data for CO2 emissions and water usage, and six in 10 aren't checking supplier data for labor standards.
Half the respondents said supply chain partners are requiring that they adopt new standards for carbon management, but only 19 percent are collecting CO2 emissions data often enough to effectively manage it. And three-quarters said supply chain partners also require they adopt new standards for energy management, waste and ethical labor standards.
IBM's Sustainable Supplier Information Management offering is designed to help them develop processes and systems for:
- Part number management, to ease part and product traceability;
- Process change management, to improve response and reduce costs associated with changing requirements;
- Supplier audit management, to ensure compliance on issues ranging from cost and quality to business ethics and environmental practices;
- Qualification management, to vet new suppliers for performance and sustainability standards;
- Supplier problem management, to ensure quick response when problems arise;
- Real-time quality management, to reduce cost, improve quality and ensure continuity of supply;
- Predictive quality management, using automated systems and virtual supplier auditing to head off problems before they occur.
The Sustainable Supplier Information Management offering can be used with IBM's Sustainable Procurement offering, which helps companies define cost, efficiency and sustainability measurements and goals for their procurement activities. This covers all supplies, materials, ingredients, components, finished goods and services they purchase to run their operations and to develop, manufacture and deliver their own products or services.
To learn more about IBM's green and sustainability consulting offerings visit: www.ibm.com/gbs/sustainability
For more information on IBM's full portfolio of energy and environment offerings and products, go to: www.ibm.com/green
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