In recent years, sustainability has been identified as an important industry trend. However, sustainability has long become an absolute necessity for manufacturing companies. Sustainability strategies can increase customer retention, brand awareness and overall visibility for not only for manufacturing but also for service providing companies.
Many corporate executives are hesitant towards the implementation of large-scale sustainability programs as they are often implied to create a negative economic impact for the company. FOSTEC & Company enables its clients to exploit unknown potentials from sustainability programs without disrupting the daily business operations, while generating a positive economic effect for the company as well as a positive environmental effect. Figure 1 depicts the FOSTEC & Company sustainability strategy development framework.
Figure 1: FOSTEC & Company sustainability implementation framework
Sustainability can be implemented on all levels of corporate value chains of manufacturing and service providing companies. FOSTEC advises corporates on sustainability programs such as the shift from fossil fuels to green energy, the decarbonization of manufacturing processes as well as the reduction of waste and plastic materials in packaging and shipping containers of products.
Sustainability programs can often lead to product, packaging, production/manufacturing process and business model innovation. It allows companies to disrupt their own industry without the imminent risk of undermining the existing business o the company.
Corporate sustainability is centered around the three pillars depicted in figure 2 depicted below. Both manufacturing companies as well as service providing corporates need to incorporate all three pillars in their sustainability strategy to create long-lasting corporate success.
Pillar, one incorporates all measures and actions centered around the environmental aspects of the business, including but not limited to the reduction of the carbon footprint, the reduction of water usage and lean manufacturing. Overall, environmental measures are meant to increase the company’s ecological performance while simultaneously enhancing the company’s brand image and creating a competitive advantage through better management of natural resources.
Pillar two focuses on the social effects and measures a company can take to increase the degree of fairness in the company while protecting and enhancing employee’s welfare. Measures include employee retention programs, flexible scheduling and the fundraising of good causes and scholarships. Social measures lead to an enhanced reputation increased employee and talent retention and better recruiting opportunities, consequentially creating a competitive advantage through more qualified personnel.
Figure 2: The three pillars of corporate sustainability
Pillar three, measures concerning the economic aspects of the business, strengthening the honesty of business practices and promoting product safety, is mostly considered to be part of the ongoing business operations. Measures such as increased compliance, better stakeholder management and the investment in new technologies build the base for pillars one and two, provide benefits to society and therefore create a competitive advantage through increased profits.
The Kano Model allows companies to prioritize the implementation of different sustainability programs as not all programs offer the same return on investment and customer appreciation. The customers differentiate between attractive elements such as an active reduction of CO2 emissions and performance elements such as the introduction of an ISO 14001 certification.
Figure 3: Kano model to prioritize decision making and strategic implementation
With many years of strategy consulting experience, FOSTEC & Company supports manufacturing companies in defining and optimizing sustainability strategies at all levels of the supply chain across all industry sectors and verticals. A sustainability strategy framework generally includes the steps listed below:
- Status quo analysis (internal analysis): Analysis of the current state of the companies’ sustainability actions and strategy
- Environment analysis (external analysis): Which competitors are actively investing in sustainability and how are they positioned? What distinguishes these competitors and what are the unique selling points of their sustainability strategy?
- Customer touchpoint analysis: What touchpoints to the customers have with the companies’ products, sales channels, and representatives? Which of these processes could be improved and made more sustainable?
- Sustainability gap analysis: Gap analysis between the companies’ status quo, competitors’ actions, and customer requirements to derive measures and actions for the development of the sustainability strategy
- Definition of tailored sustainability strategy and implementation plan: Development and definition of a tailor-made sustainability strategy from the previously identified gaps (measures & actions) and definition of a step-by-step implementation plan
- Sustainability organization and governance design: How should roles and responsibilities be distributed and created within one’s organization to work efficiently and effectively? Does the organization need to build up additional know how?
Overall, the introduction of a sustainability strategy can generate highly attractive returns on investment if planned and executed appropriately. Our experienced team of strategy consultants would be delighted to support you in developing and executing your sustainability strategy to unleash unused potentials.
Your contact for sustainability strategy for corporates:
Markus Fost, MBA, is an expert in e-commerce, online business models and digital transformation, with broad experience in the fields of strategy, organisation, corporate finance and operational restructuring.Learn more
Download the service overview for our sustainability strategy for corporates.