The business case for value chain mapping

Developing sustainable value chains is key to meeting ESG goals and balancing the needs of people, profit and planet. It is a key tool in developing an ethical and responsible business. At Wylde Connections we work with companies large and small on developing robust sustainability strategies and we spend much of our time gaining insight into the positive and negative impacts of the activities  involved in delivering value to customers through products or services. Understanding that process is a prerequisite to reducing negative impacts and making meaningful interventions, whilst also exploring opportunities for positive impacts that  support business growth in line with the ethos of the triple bottom line..

So, what is a value chain? To put it simply, it is the sequence of activities and processes that create value for customers and shareholders. That covers everything from the extraction of raw materials to end-of-life disposal and everything in between during product use. Each stage has social and environmental consequences.

Value chain mapping involves scrutinising each  stage involved in delivering a product or service through a sustainability lens. By doing so, businesses can identify and explore the impacts of their business operations on the environment and society. By looking at the whole of the value chain right from the design and choice of materials through to manufacturing processes, inbound logistics, distribution and post-sale customer service, and end-of-life, the exercise gives a 360degree view of operations. 

Value Chain Mapping is a powerful strategic business tool, especially when used in conjunction with other models and frameworks such as a PESTLE and SWOT analysis and the framework provided by the UN Sustainable Development Goals. Not only does it identify potential risks and opportunities, it also highlights ESG and sustainability actions that businesses can take. The business case is strong for companies looking to become more resilient in a rapidly changing world as well as giving them a competitive advantage which often arises from innovative thinking and the potential for diversification into new markets and developing new products. 

Continuous Improvement With Value Chain Mapping

This deep dive is the foundation for the work we then do as sustainability consultants, helping clients understand their impacts and guiding them on their journey to embed sustainable practice. Yet that process is about more than meeting moral or legislative obligations. Savvy businesses understand that it has far reaching commercial benefits.

 Value chain mapping invariably highlights opportunities to drive efficiencies and reduce waste. In terms of terms of areas like energy consumption, this can bring significant cost savings. By following our recommendations, businesses not only help reduce their carbon footprint but can boost the bottom line.

For instance, embracing responsible resource management will improve an organisation’s environmental credentials and help support the circular economy. In doing so businesses will also secure a competitive edge by reducing their utilities, procurement and waste management costs.  

Risk Management

As ESG legislation ramps up, compliance is moving up the corporate agenda. Value chain mapping helps businesses ensure they are meeting their regulatory obligations. Whether it is having the visibility to ensure there is no labour exploitation or having insight to support carbon reporting, having an overview of the entire supply value chain is essential.

Businesses may be taking great strides driving sustainability within their day-to-day operations, but they do not always understand the impact made by activities outside of their own facility. Effective risk management is all about getting a helicopter view of the entire sequence of processes which feed into their product or service. Only by doing so can businesses reduce the risk of fines, litigation and reputational damage.

Mapping helps build supply chain resilience by identifying dependencies and vulnerabilities. It will highlight ways to source more sustainable materials, diversify your supply base and form relationships with partners who are better aligned with your vision and values.

New Opportunities

Value chain mapping not only helps mitigate risks but highlights opportunities. It shines a light on areas for improvement, be it in production processes or material sourcing, especially looking at alternative raw materials with lower impact. 

It encourages innovation and a new mindset willing to challenge the status quo. Businesses that carry out this exercise effectively often spot chances to expand their product portfolio, explore new business models or develop more robust supply chains.

It also helps maximise the benefits of developing a comprehensive sustainability strategy. Embracing transparency is key to becoming an ethical and responsible business. Only by having full insight can people make informed decisions and remain accountable to their stakeholders, including employees, suppliers and customers. That honesty helps build trust and avoid the pitfalls of greenwashing. 

At Wylde Connections we use value chain mapping as a valuable tool to drive sustainable practice and a framework around which we can develop our clients’ action plans. It gives businesses the information and insight they need to start setting goals and tracking progress.

Talk to our team about how we can help you leverage value chain mapping as part of a holistic sustainability strategy. Book a discovery call today.