How do I incorporate sustainability into my supply chain strategy?
Environmental responsibility is no longer just a regulatory burden; it has become a driver of business value that includes efficiency gains, waste reduction, risk avoidance, new product opportunities, and cost control. By far the best way to formally incorporate sustainability into supply chain strategy is to employ a strategic supply chain design tool with full mathematical optimization as the solution engine. The user then has several options: (1) maintain the traditional focus on cost minimization but also obtain energy and carbon audits across the entire supply chain; (2) change the objective to profit maximization and obtain the energy and carbon audits; (3) formally incorporate cap-and-trade restrictions into (1) or (2); (4) formally incorporate by-products of manufacturing processes into (1) or (2); (5) change the objective from cost minimization or profit maximization to energy or carbon minimization, this time obtaining a cost audit. In addition, such analyses can shed entirely new light on critical decisions with respect to facility location, outsourcing, mode selection, and so on. For over 35 years the Insight product SAILS has served as the industry reference standard for strategic supply chain design and is ideally suited to address the complex tradeoffs associated with sustainability. In short, SAILS can identify optimal sustainability strategies that minimize cost, maximize profitability and favorably impact return on shareholder equity.