Pick A Service Provider That Shares Your Green Business Strategy

Corporate responsibility guru John Elkington may have coined the term “triple bottom line” some 20 years ago, but it has become a guiding principle for corporate strategists of the 21st century.

The underlying elements of the triple bottom line are profit, planet and people: Companies are striving to achieve success through financial means, environmental/green/sustainability efforts, as well as through social channels.

Although triple bottom line has its advantages, many companies struggle with implementing the ideals throughout their end-to-end processes. From a supply chain perspective, businesses are finding that the triple bottom line has added another dimension to outsourcing service/reverse supply chain activities.

Consider the reasons for outsourcing service/reverse supply chain activities. Most companies typically do it because the practice enables them to focus on core business, rely on technology and expertise of a third-party and manage risks and control along the reverse chain.

But for companies pursuing the triple bottom line philosophy, the service provider selection process must take into account additional criteria. These measures ensure that the customer and service provider relationship increases sustainability efforts for both parties, as well as enhances the value network—both upstream and downstream.

When selecting a service provider and working to achieve a successful triple bottom line, consider the following areas:

1.) Alignment of vision: Is there an alignment of corporate vision between the customer’s and service provider’s organizations? Both need to have an aligned social and environmental agenda, along with financial objectives.

2.) Brand equity: Is the service provider known for its sustainability efforts in the industry? Will the company’s association with a service provider have positive, neutral or negative impact on its brand image? How will the market perceive this relationship?

3.) Processes: Do the processes of the service provider promote sustainability efforts, such as reuse of material, minimal usage of energy and water, as well as environmentally friendly final disposal of the product?

4.) Supply chain/value network: Will the service provider enhance the cause of sustainability both upstream (i.e., primary customer/end customer) and downstream (i.e., all tiers of supply base, including logistics service providers)? Some relationships drive significant redesign of the supply chain, including product innovations and modifications—for instance, collaborative development of decomposable packaging material.

5.) Advocacy and industry leadership: Will the relationship between the customer and the service provider drive positive changes and establish new industry norms?

6.) Leveraging intangibles: Will the partnership with a service provider act as a catalyst for generating and implementing new ideas to expand or expedite sustainability efforts within an organization? Such intangibles could have significant impact in decision-making processes within the customer’s organization.

Overall, by examining and beginning with the six areas listed above, companies and service providers can join forces to achieve a thriving triple bottom line that will ensure a win for both parties, as well as a win for people and the planet.

Shibesh Banerji is principal consultant (global supply chain) at Tompkins Associates, a provider of global supply chain services, distribution operations consulting, technology implementation, material handling integration, and benchmarking and best practices.

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