InSights: Advocating for “responsible” supply chains

This is an excerpt of the original article. It was written for the July-August 2019 edition of Supply Chain Management Review. The full article is available to current subscribers.

July-August 2019

If you’re a long-time reader of Supply Chain Management Review, you’re familiar with Larry Lapide’s “Insights” column. Typically, Larry is writing about the many facets of planning, but occasionally, he takes on a provocative topic. One year, he questioned whether it was necessary to be a Top 25 supply chain leader, especially if in your industry, good enough gets the job done.

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Last year, at an advisory board meeting of the Manufacturing Leadership Council we discussed renaming one of the major critical issues it addresses: manufacturing 4.0 sustainability. Now, sustainability is a broad topic including social responsibility and environmental consciousness, and so we kicked around some terms that might be used instead. Someone suggested “ethical” supply chains, to which I responded that the term ethical may imply judgment because it is about being right versus wrong and good versus bad. I preferred “responsible” supply chains instead. Why?

“Responsible” over “ethical”

Ethical is defined as an adjective “pertaining to or dealing with morals or the principles of morality; pertaining to right and wrong in conduct.” Responsible, meanwhile, means “answerable or accountable, as for something within one’s power, control, or management.” I believe the latter is more appropriate for business decisions, because the law dictates what businesses are legal (i.e., good) versus illegal (i.e., bad).

My first two “Insights” columns back in 2007* dealt with the fact that oil prices were starting to rise, and thus, putting at risk the benefits garnered from supply chain practices that were put in place during the era of cheap oil. Because oil and other carbon-based energy sources are non-renewal, I advised that oil be squeezed out of existing supply chains, such as by slowing them down. The rationale I offered was primarily to alleviate increasing costs, and to a secondary degree to reduce carbon-emissions detrimental to the environment. Managers could easily convince their executive team to reduce costs, but were less likely to convince them to reduce oil consumption only for environmental reasons.

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