Selecting a Service Provider that Mirrors Your Business Strategy and Sustainability Efforts

Six Areas to Examine for a Successful Triple Bottom Line

By Shibesh Banerji, Tompkins Associates

The "triple bottom line," a phrase coined by John Elkington in 1989, has become a guiding principle for corporate strategists of the 21st century. Although the term may not be a familiar one, the underlying elements -- profit, planet, and people -- certainly are.

This means companies are striving to achieve success through financial means, environmental/green/sustainability efforts, as well as through social channels.

A great example of the triple bottom line in action is the corporate social responsibility reports that half of the Fortune 500 companies have begun publishing over the last five years. These reports are a clear acknowledgement by corporations of their broader role in caring for communities and the planet, which can also lead to financial gains from the customers who support these "green" corporations.

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

• Focusing on core business,
• Relying on technology and expertise of a third-party, and
• Managing risks and control along the reverse chain.

However, for companies that are pursuing the triple bottom line philosophy, the service provider selection process needs to 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:

• 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.
• 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?
• Processes: Do the processes of the service provider promote sustainability efforts (i.e., reuse of material, minimal usage of energy and water, as well as environmentally friendly final disposal of the product)?
• 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 (e.g., collaborative development of decomposable packaging material).
• Advocacy and Industry Leadership: Will the relationship between the customer and the service provider drive positive changes and establish new industry norms?
• Leveraging Intangibles: Will the relationship 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.