Starting at the source, Sustainable Supply Chains help conscious consumer companies decrease their Environmental and Social Impact, Elevate their Practices and Create Engines for Change.
If you haven’t been hiding under a rock for the past ten years, then you have most likely heard the word Sustainability manifest in at least one, if not multiple conversations in the past decade. There is also a chance that you and/or your organization are actively exploring sustainable practices and operations (if so, kudos to you). But as you may have or will eventually realize; sustainability is as complex as it is necessary. It will require greater commitment and collaboration on a global scale.
For those of you who may have been hiding under that rock, Sustainability as captured by the Brundtland Commission is the notion of meeting the needs of the present without taking resources from future generations.
In an ever-growing consumerism-consumed world, it becomes ever more evident that consumer companies can play a pivotal role in pushing the needle for sustainable consumption practices. Especially as these companies face increasing pressures from customers, employees, investors, and governments to demonstrate greater environmental stewardship and social responsibility. Calling for dramatic improvements in sustainability performance.
This is increasingly being done by consumer companies globally through sustainable supply chains and sustainable supply chain management. This is an ideal place to start given that, according to McKinsey & Company, the supply chain accounts for over 90% of the Environmental Impact of most consumer goods companies. This then begs the question…
What is a Sustainable Supply Chain?
For those unfamiliar with supply chains; they are best known as coordinated networks of all the companies, facilities, and activities in the product’s life-cycle. For a supply chain to be considered sustainable it must encapsulate an array of different yet equally important priorities, including:
● Environmental Stewardship
● Conservation of Resources
● Reduction of Carbon Footprint
● Financial Savings and Viability
● Social Equity and Responsibility
Sustainable Supply Chain Management is required to ensure that these elements are being continuously addressed. Sustainable Supply Chain Management is the process of integrating environmentally and financially feasible practices into the complete supply chain life-cycle. Making plans for the product’s End-of-Life, taking into account Sustainable Waste Management principles.
Why is it Important?
It is evident that supply chains, for most consumer companies, have a far greater impact on the environment than any other part of their operation. Supply chains intrinsically embody energy-intensive production and transportation impacts, as products are made and moved around, both locally and globally. Thus, in an increasingly globalized world, it is difficult to dispute sustainable supply chains’ importance in helping consumer companies achieve the Triple Bottom Line of People, Planet, and Prosperity.
Sustainable Supply Chain Benefits
Growing research for Sustainable Supply Chain Benefits is increasing exponentially. Consumer Companies can and have been able to optimize processes, conserve resources, and increase productivity and innovation, thus significantly cutting costs. This was done simply by managing and improving environmental, social, and economic performance throughout the supply chain.
Some Sustainable Supply Chain benefits include:
● Reduced Social and Environmental Impact
● Improved Continuity of Resource Supply
● Improved Branding and Protection against Reputational Damage
● Improved Investor Relations and Potential for New Partnerships
However, Sustainable Supply Chain benefits are not exclusive to a company’s interests. These benefits have the innate capacity to ripple out to society and the planet at large.
Common Challenges For Businesses
While the long-term benefits of sustainable supply chains are almost non-negotiable. Most businesses tend to face a set of common challenges when moving towards more Sustainable Supply Chains:
● Increased Short-Term Costs
● Supply Chain Complexity and Difficulty Monitoring
● Struggles with Alignment across the Supply Chain
● Other Demands on the Supply Chain (e.g consumer demand affecting speed, quality, etc.)
These, however, can be mitigated in the long-term through thoughtful and strategic practices adopted by the business as they begin to shift towards Sustainable Supply Chains. As you chew on that you might be wondering…
Where to Start?
While incorporating sustainability into a company’s supply chain may be complex, shifting towards more Sustainable Supply Chain Management and Operations practice can yield long-term benefits for the company and beyond. Companies can adopt several initial steps to move toward sustainable supply chains:
● Map your Supply Chain and Identify Inefficiencies.
● Create a Training and Education Program and Communicate Expectations.
● Create a Supplier Code of Conduct, to ensure Alignment across the Supply Chain.
● Partner with Industry Peers / Join Industry Collaborations.
Forrester Research has conceptualized a framework for ways to integrate sustainability into a supply chain. Highlighting Four Key Elements:
Ensure Sustainable Resource Procurement
Plan for End-of-Life
Communicate Information / Radical Transparency
Sustainable Supply Chain Examples
Examples of sustainability cut across industries, including technology, agriculture, and infrastructure, among others. These can be seen in stories highlighted by SustainCase. An inspiring example is of a road builder that previously bought asphalt based on price alone who cut shipping distance and related carbon emissions by 40% and achieved a lower total landed cost by buying supplies locally. Another great example is a fast-food company that redesigned its packaging to avoid repacking in the supply chain. In doing so, they eliminated literal tons of waste.
Sustainable Supply Chains have also made a splash in the Tech-World with Microsoft being a leader in employing its technologies to empower their customers around the world. Inspiring them to increase their own sustainability and drive sustainable innovation through their products and services. With efforts such as their AI for Earth platform, which supports organizations working to solve environmental problems by applying the full potential of artificial intelligence and cloud computing. Microsoft is working alongside Featured Partners in this effort to solve many global challenges. Including the food and farming sector, air quality conditions in urban areas, ocean research, and international conservation. Microsoft has also committed to investing $1 Billion in the next four years in technological solutions for global climate change, as a part of their Climate Innovation Fund.
Originally Published on Habitatpoint