Our last blog explained that performing a materiality index is only the tip of the iceberg when understanding the sustainability data that your business needs to meet the growing expectations of your customers.You're not alone if you find it overwhelming to think about the entire set of sustainability data requirements to substantiate what your brand and products stand for. Therefore, it is understandable why people often take an issue-first approach because going after one issue at a time makes things more manageable.
However, the reality is, to truly make an impact within even a single issue will take months, if not years, to complete. And the risk is that you fail to identify and get ahead of the other pertinent issues. This delay in addressing the bigger picture means you could lose out on value-added opportunities as well as posing an ongoing and ever-increasing risk. Therefore, a solid sustainability strategy should directly inform your broader data requirements. For example, your sustainability strategy should define the purpose of the data you need to collect from your suppliers, why it is essential and how you will collect it.
7 reasons people collect data from suppliers
There are typically seven reasons why businesses need to collect data from their suppliers:
- Benchmark: provide a baseline
- Supplement: collect additional information not readily available
- Respond: react to an emerging issue
- Assess: review a set of criteria on a periodic and onboarding basis
- Substantiate: ensure facts back up claims
- Report: show progress in your annual Corporate Responsibility Report
- Story Telling: show progress and grow PR with authentic, credible stories
Clearly understanding why you are collecting the data helps you limit the scope of your data collection project and helps you communicate to suppliers why it is essential and how you will use it to further your shared goals. When combined, these benefits will mean that you can collect data more quickly and more effectively.
Selecting a data collection approach
When is it right to go outside of your core business systems to survey suppliers for additional data? As frustrating as it can sometimes be, IT is right to challenge. After all, they have invested millions of pounds and countless hours in your core business systems.
However, there are several very valid reasons for you to stray from your internal IT menu when collecting data from your supply chain. And these reasons are becoming increasingly acute within the modern retail environment of demanding customers, distressed retailers, and disrupted value chains.
Equate your Master Data Management (MDM) and product specifications as part of a Product Lifecycle Management (PLM) system to a traditional supply chain. They offer efficiency and consistency when processing vast volumes of data. They are programmed to receive billions of rows of predefined information at one end and, in return, will reliably deliver your business-critical reports at the other. Just like a traditional supply chain, we build core business systems for what we know to expect. Pallets of forecast bits and bytes are delivered directly to your desktop.
However, what happens to the unexpected? We have entered the age of uncertainty, after all.
It is tough to plan for the breadth and depth of your sustainability and regulatory data needs when building core business systems due to the pace of evolution. And even if they can, is carefully integrating the entire breadth of your sustainability and regulatory data into the predictable hum of your core business system "supply chain" the right thing to do? Or is a furiously peddling courier more appropriate to deliver your data whilst it is still relevant?
Two main variables influence which approaches you should take:
- Change (What is the probability that your requirements (scope, detail, or breadth of data) are likely to change within 3 to 5 years?)
- Urgency (How urgently do you need this information?)
Let me offer this handy matrix to support your consideration:
To become data-driven, you must also be people-centric
Once you've identified the sustainability data required and the approach you're going to take to collect it, success depends on successfully engaging the current custodians of that data: your suppliers.
However, internal and external challenges hamper most attempts to collect data from suppliers:
It is possible to overcome these challenges when your internal processes are aligned, your sustainability goals are clear, and your approach to data-driven sustainability fully embraces the people who make it happen. Engaging your suppliers to understand and align your objectives is a crucial element of this.
We call this Data-driven, People-centric sustainability.