What is Sustainable Supply Chain Management and why is it needed for sustainable development?
sustainable development: Sustainable supply chain management- an approach towards achieving the sustainable development goals begins with an understanding of your company’s environmental, social, and economic effect, as well as implementing the required changes to mitigate them. Everything from a warehouse’s electricity source to products transportation and beyond can be a part of the operation.
If your warehouse produces goods, your sustainability strategy will entail a study of the complete manufacturing process, including the sustainability practises of all raw material suppliers, product assembly in the plant, and waste disposal and recycling.
Why is it Important to Have a Sustainable Supply Chain Management System?
Sustainability in a supply chain is more than just about becoming green, it’s a contribution towards the UN’s Sustainable development goals. Because environmental responsibility is a critical focal point in today’s industry, a supply chain based on a sustainable platform enables more partnership options. In addition, practising eco-awareness in all aspects of your business enhances your reputation and strengthens your legitimacy.
A sustainable supply chain- an approach towards achieving the sustainable development goals can also help you increase productivity while saving money. You can improve the efficiency of buildings, cars, and machines while saving money by employing sustainable approaches and resources. Nike is a shining example of corporate sustainability. The world’s most enormous shoemaker modified the way it creates some of its shoes, cutting labour expenses by up to 50% and reducing material use by 20%. As a result, margins increased by 0.25 per cent leading to sustainable development.
Implementing a Sustainable Supply Chain- an approach towards achieving the sustainable development goals
- It’s not difficult to design and execute your sustainable supply chain management system. Here are four steps to establishing a long-term supply chain.
- Determine your sustainability goals and objectives, then devise a strategy for achieving them. Include your supply chain, as it significantly impacts your company’s environmental, social, and economic impact.
- Make a policy for your suppliers and customers to follow when it comes to sustainability. It’s up to you what you prescribe, but it should include standards for trash disposal, energy use, transportation, and more. Please stick to your policy once you’ve established it.
- From top to bottom, examine your supply chain. Is it as long-term as you want it to be, or do you need to make changes?
- Make the necessary changes to your supply chain to make it more sustainable. This could mean switching vendors or modes of transportation, or it could mean your current partners are adopting more environmentally friendly methods to keep your firm afloat.
It’s challenging to integrate sustainability into a company’s supply chain, yet failing to do so could be the most dangerous risk of all. Nevertheless, several preliminary measures can be taken by businesses to move toward more sustainable supply chains- an approach towards achieving the sustainable development goals:
Map your supply chain
Many businesses do not have a complete awareness of their supply chain’s sustainability implications. Inventorying suppliers, identifying the most severe environmental and social concerns they face, and prioritising work with suppliers are all-important first steps.
New Balance Athletic Shoe Inc. has limited the number of suppliers with which it does business due to their performance in terms of sustainability requirements. As a result, the company has cut its footwear supply chain by 65 per cent and is concentrating on building solid and good relationships with its vendors. Level of investment, significance to business continuity, and geography as a proxy for risk are some characteristics that may be useful for prioritising suppliers.
Focusing on sustainability in your supply chain is an excellent approach to promote your company’s values and culture to suppliers and customers while contributing in achieving the sustainable development goals. A supplier code of conduct is essential in enlisting suppliers in your sustainability initiatives since it establishes and communicates expectations.
Various materials and tools have been developed to assist businesses in developing a supplier code of conduct. The booklet “Supply Chain Sustainability — A Practical Guide for Continuous Improvement” by the United Nations Global Compact, for example, contains instructions and advice for drafting and implementing a successful supplier code of conduct.
Baseline supplier performance
Collecting data from suppliers via a simple benchmarking questionnaire or self-assessment can provide you with an insight into your starting place once you know who your target suppliers are and have defined compliance rules.
Many companies, including merchants, large brands, and the United States government, have begun using questionnaires and surveys to assess the performance of their suppliers. In self-assessments connected to crucial areas, businesses are increasingly incorporating all topics mentioned in their code of conduct with specific focus and weight.
Develop training and capacity building programs
This is a critical step in enhancing sustainability and influencing behavioural changes across your supply chain and hence promoting sustainable development. There are numerous external resources available to aid these efforts, some of which are targeted to specific sector needs.
In our opinion, leveraging the best practices and case studies from top-performing suppliers at yearly vendor conferences, online training modules, and capacity development programmes is an excellent approach to disseminate knowledge across the supply chain. In addition, companies reward selected suppliers’ efforts and showcase the practical benefits of sustainability initiatives to others in the supply chain by presenting their success stories.
Drive performance improvement
An audit programme can monitor performance improvement over time once the baseline performance of suppliers is known. While self-assessments are frequently done by a corporate group such as EHS, procurement, or marketing, onsite audits can uncover local practises, behavioural issues, and practical chances for development that are difficult to find through questionnaires alone.