The Right Way: Sustainability in Supply Chain Management Decision Making
The right way to make a decision in Supply Chain Management (SCM) is to minimize the harm to people and the natural environment stemming from the production and delivery of goods and services. This can be challenging because economic competition incentivizes a narrow focus on achieving the lowest cost, highest returns in the shortest possible time to the most salient stakeholders. This does not include nor benefit all stakeholders impacted by supply chain decision making. The right way invariably involves taking responsibility for making hard choices that trade off people’s wellbeing, the viability of the natural environment, and economic returns.
Traditionally, in supply chain management, decision makers need to get 6 things right about how work is done for an end customer. For any transaction they ask: The right product quality? To the right customer? In the right quantity? At the right time? At the right place? At the right cost?
To this list we add a seventh item that addresses sustainability; “7. Done the right way”.
Customers, employees, and suppliers most directly affect and are affected by supply chain performance. Other stakeholders—including regulators, shareholders, labour, competitors, lenders, NGOs, and advocacy groups all exert indirect influence. Their importance varies by situation and over time, requiring ongoing analysis, transparency, and awareness of the broader supply network.
The generic 7-7-7 framework below to guides how “the right way” can be incorporated into every supply chain decision for every good or service.
| 7 Rights for Sustainable Supply Chains | 7 Helpful Management Practices | 7 Implementation Steps |
| 1. The right product quality | 1. Lean is Green |
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| 2. To the right customer? | 2. Communicate and Coordinate Better About Supply and Demand |
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| 3. In the right quantity? | 3. The 80/20 Rule |
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| 4. At the right time? | 4. Change Continuously |
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| 5. At the right place? | 5. Secure Supply |
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| 6. At the right cost? | 6. Keep Employees Safe |
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| 7. The right way (i.e. sustainably) | 7. Design for Circularity |
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Supply chain management (SCM) provides tools for balancing stakeholder interests and performance, particularly when supported by data, ethical decision-making, and transparent institutions.
Seven key SCM practices:
- Lean is Green: Eliminate waste to improve efficiency, profitability, and environmental outcomes.
- Communicate and Coordinate: Align supply and demand through better information sharing, forecasting, scheduling, and coordination.
- Apply the 80/20 Rule: Prioritize the most significant activities, risks, and opportunities first.
- Improve Continuously: Regularly measure performance, identify gaps, and refine processes using feedback and continuous-improvement practices.
- Secure Supply: Build reliable supply networks, assess disruption risks, and develop contingency plans.
- Keep Employees Safe: Design safe processes and hold organizations accountable for worker safety and fair working conditions.
- Design for Circularity: Reduce, reuse, and recycle materials through circular and reverse supply chains.
The starting point for thinking about supply chain decisions, the right way, involves these generic implementation steps:
1. Comply with the law in the jurisdictions in which the organization operates.
2. Identify what matters to the most salient stakeholders for an organization. (i.e., materiality)
3. Identify the relevant performance metrics or qualifiers to do business.
4. Benchmark current performance.
5. Identify gaps between the present and desired/required levels of performance.
6. Set in place continuous processes to hold individuals responsible for narrowing the gap.
7. Revisit the effectiveness of steps 1 to 6 regularly and reset targets for the next salient goal.
