Comments on: Do Investors Really Reward Sustainable Enterprises? What do You think?…

By: handfield

handfield — Tue, 25 Sep 2012 23:43:15 +0000

Joe, I’d be happy to share the data with you. Our thesis at the moment is that sustainable efforts can provide tangible performance outcomes when they are built on a solid foundation of supply chain process maturity. This analysis is starting to prove out….which in fact leads us to believe that you can’t have a sustainable supply chain if your sourcing processes aren’t in control. Which makes sense – you can’t manage suppliers if you don’t know who they are or how much you are spending with them!

By: Tptbd

Tptbd — Sat, 22 Sep 2012 04:58:18 +0000

It starts to get real when people believe these matters are strategic—that they will shape the future of the business. I use the word “sustainability” as little as possible because it’s so generic; it makes people’s eyes glaze over.

By: Simon Emmitt

Simon Emmitt — Tue, 11 Sep 2012 17:19:55 +0000

Good article, I agree that classification is much more important. It is of course great that you understand what item you are purchasing in terms of manufacturer part number, but limiting the classification to manufacturer part number and UNSPSC really doesn’t get you to a complete understanding of spend. UNSPSC,etc classifications only go so far and it is likely that multiple items, that are the exact same thing, are being purchased throughout the supply chain, at sub optimal cost.

The video below details out a process for improving that understanding of item data based on machine learning and semantic recognition (contextual understanding)

http://www.youtube.com/watch?v=Md7XXb2AIqc

Understanding each item to a point of hierarchical uniqueness is in my mind where healthcare and spend management in general is going.

By: Joe

Joe — Fri, 07 Sep 2012 06:05:04 +0000

Sustainability is a concept that has many dimensions and complexities. Performance can also have a variety of influences, some which can be captured and others cannot. It is not easy to isolate the necessary values and control for everything.

In terms of sustainability measures, some view these measures as “inputs” and cost money (e.g. setting up an EMS and auditing for socially responsible practices). There are also measures that can be viewed as “outputs”. This is real measures such as reduced emissions or penalties, sick workers, deaths, etc. The question is what aspect of sustainability are you measuring and what dimension is really being measured (input or output). With all these complexities and a variety of confounding metrics and variables, insignificance is the most likely outcome. Of course, I did not see the study, so these are some issues.

Also respondent bias is clearly an issue.

By: handfield

handfield — Thu, 06 Sep 2012 13:57:28 +0000

Unfortunately, it is also apparent that the consumer may not care about sustainability that much either. In academic terms, this is called a response bias, which is a cognitive bias that occurs when people answer surveys. So when consumers (or investors) respond to surveys, they will always say “of course I support sustainable products (companies)” but when push comes to shove, economic issues always get in the way. As one senior supply chain executive told me, “sustainability seems to have hidden under a rock somewhere over the last five years, due to the economic recession…”

By: Steve

Steve — Thu, 06 Sep 2012 10:52:27 +0000

One of the things a colleague of mine is looking at is sustainability. It appears on closer examination that so much of what is touted as sustainability practices is more on the par of sustainability advocacy, versus seeing an ROI that is what the sustainability performers want. Ignored are second and third order impacts on resources in favor of the sustainable event that is customer facing and seems to have an impact.

By: Timothy

Timothy — Thu, 06 Sep 2012 10:07:11 +0000

It would be interesting to know what the investor meant when he told you “you’re right”… don’t they know what they are doing and need someone to tell them because they are so used to their ways they can’t see it for themselves? Or do they know about these things and keep on regardless? I personally wish investors would truly care about sustainable enterprises, but to tell you the truth, I don’t believe they really do. Even worse, I don’t think they will care in the near future.

By: GoWebBaby

GoWebBaby — Thu, 06 Sep 2012 09:49:36 +0000

Yes investors must have to care about the sustainability. Thanks a lot for sharing this information with us. Really useful for me.