For years now, we’ve been helping supply chain professionals see hazmat compliance as a competitive advantage, not a cost center. Show your bosses real visibility into the true costs and value of improved compliance, we’ve said, and you’ll secure the resources to drive new revenue and boost profitability.

Turns out we’re not the only ones singing this tune—but we may need to start singing it to a whole new audience.

A recent article in Chief Executive entitled “Why CEOs Are Still In The Dark About The Supply Chain”— by Steven Bowen, the founder of consulting firm Maine Pointe, and J. Paul Dittmann, assistant head of the Department of Supply Chain Management at Haslam College of Business—echoes many of the same themes we’ve explored through our Total Value of Compliance framework.

One big exception, though. The CEOs targeted by this article aren’t just ignoring hazmat transport. They may be ignoring the entire supply chain.

Supply chain is “relatively unimportant”?

The article cites a Maine Pointe survey of private equity firms in which “executives ranked supply chain functions as ‘relatively unimportant’ in driving cash and growth” and asserts, “The result is often a performance gap that leads to companies falling behind competitors.”

Wow. If executives don’t believe supply chain is important at all, how are we hazmat pros supposed to make them give a damn about Dangerous Goods compliance?

The answer may lie in following and in promoting Bowen and Dittmann’s advice, which parallels much of what we’ve been saying but addresses a much bigger picture.

For instance:

Instead of seeing [supply chain] as a tool for managing cost, successful executives view it as a tool for creating value. Best practices for driving shareholder value through supply chain optimization can be easily implemented in any company for concrete results.

Substitute “hazmat compliance” for “supply chain,” and we’ve said almost the same thing:

Total value of compliance [is] a new way of thinking about supply chain operations that views hazmat compliance as not just a cost of doing business, but also as a value-added component that contributes to profitability.

Maine Pointe even promotes a Total Value Optimization™ approach to supply chain excellence. It’s like déjà vu!

Metrics and conversations

But the point isn’t that we’ve been thinking along the same wavelength as the leaders of a prominent consulting firm and a renowned business school. The point is that these are excellent ideas that can help your organization make more money.

One example: Bowen and Dittmann recommend that “focusing on the right metrics is the logical next step … Making that connection will allow the supply chain manager to better visualize how supply chain decisions impact the entire company.”

Similarly, we recommend a Total Value of Compliance assessment to give you (and your C-suite) visibility into the metrics that define the competitive advantage your organization gets from superior compliance.

Bowen and Dittmann also say, “Another essential best practice in supply chain optimization is building relationships throughout the entire company and starting conversations with the CFO and other key executives.”

That reminds us of CEVA Logistics’ Rusty McMains, who turned a conversation with his boss 10 years ago into a hazmat operation that generates an extra additional $17.5 million a year in revenue.

Compliance makes supply chain a competitive weapon

We hope Bowen and Dittmann succeed in waking CEOs up to the importance of the supply chain. After all, once executives understand how supply chain excellence can make them more money, they’ll be one step closer to understanding that superior Dangerous Goods compliance can be the key to supply chain excellence.

“The Total Value Optimization (TVO) framework promotes greater collaboration, integration and transparency,” Bowen and Dittmann write. “This framework represents a pragmatic step-by-step approach to transforming the supply chain into a competitive weapon.”

Make it happen in your organization. Contact Labelmaster for a free Total Value of Compliance assessment today.

Labelmaster is a full-service provider of goods and services for hazardous materials and Dangerous Goods professionals, shippers, transport operators and EH&S providers. See our full line of solutions at labelmaster.com.