SUPPLY CHAIN & INFORMATION SYSTEMS AND SUSTAINABILITY

Upgrading the SCOR Model to Include Social and Environmental Factors

The Supply Chain Operations Reference model (SCOR) was developed by the Supply-Chain Council as the standard tool for evaluating, measuring, and improving supply chain performance. The Association for Supply Chain Management (ASCM) includes SCOR as a cornerstone of its training programs, one that integrates the work of information technology (IT) professionals and supply chain managers.

SCOR (see the model below) is used in most introductory supply chain management courses to provide a common language and mental model around five functions:

      1. Plan – demand and supply planning and management
      2. Source – procurement and supplier relationships
      3. Make – manufacturing and production
      4. Deliver – orders, warehousing and transportation
      5. Return – receiving and processing of returned products

Supply chain managers utilize the SCOR model as an analytical tool for analyzing and improving an company’s supply chain.

However, like similar traditional models in finance, marketing, and accounting that are inaccurate due to their disregard of key social and environmental risks, the SCOR model is in need of an upgrade. 

Traditional SCOR Model of Supply Chain Management (Image source: AIMS)

Supply Chain SCOR Model (AIM Education)
Comparing SCOR and GREENSCOR

GreenSCOR: The New and Improved SCOR Model

The GreenSCOR model, a modification of the original SCOR model, was created by LMI and includes environmental and social impact considerations in supply chain analysis. For each of the supply chain functions in SCOR, careful consideration is giving to social and environmental risks and opportunities.

See image on left for sustainability considerations and concepts relevant to each step in the SCOR model.

By integrating sustainability into the supply chain analysis, supply chain managers can find ways to minimize operational impact and foster supply chain value creation.  

Benefits of the GreenSCOR Model

Below are the two main areas of benefit from adopting a GreenSCOR approach:

Improved social and environmental performance  

The ultimate objective of sustainable supply chain analysis is to identify often hidden social and environmental risk, impacts and opportunities and take appropriate steps to address them. By using GreenSCOR as an analysis tool, an organization can take a more complete view of the supply chain itself. For example, Unilever has over 50,000 suppliers and took the unusual step of asking Oxfam, a nonprofit focused on protecting human rights, to assess its supply chain. This resulted in a 2015 Human Rights Report and today in Unilever’s Responsible Sourcing Policy (RSP) and Responsible Business Partner Policy (RBPP) which provides Unilever with advanced risk analysis capabilities–besides being the right thing to do.

 

 

 

 

Improved supply chain management performance 


Supply chain management improvements evolve directly from the improved identification of material social and environmental impacts. Such awareness tends to spark innovation, resulting in dual benefits for society and the business.  For example, McDonalds famously invited Environmental Defense Fund into their operations in the 1990s. The unusual partnership between fast-good giant and environmental organization yielded many operational improvements the company wouldn’t have envisioned alone:  eliminating styrofoam clamshells, an enterprise wide waste reduction plan, a humane animal handling program and focus on preserving the Amazon rainforest amid many other initiatives. Is McDonald’s perfect? Absolutely not. But a GreenSCOR type approach to their supply chain has produced results.

 

Unilever’s Sustainability Partnership with Oxfam & City of Ekurhuleni, South Africa

1990: McDonalds Pledges to Cease Using Styrofoam

Learn about more sustainability concepts within this major.

ADVANCE YOUR KNOWLEDGE OF SUPPLY CHAIN & INFORMATION SYSTEMS AND SUSTAINABILITY

Learn what sustainable supply chain is all about and its importance

Learn the important things to know in this field

Learn how sustainability fits into your courses

Learn how sustainability relates to your career