Building a sustainable supply chain

Collaborate with diverse businesses that create jobs and wealth to sustain local communities. For example, HP has established supplier- and peer educator-run programs that have provided training to a large number of workers.

For resources, Ceres, a network of investors and companies established to advance sustainable business practices, has developed a set of community engagement tools in its Facility Reporting Project FRP.

Issues with supply chain sustainability

Tackling certain aspects alone is nearly impossible and may hamper your ability to reach your objectives. Share via Email Supply chains: problems of unpaid wages, working hours, safe working conditions, freedom of association and environmental stewardship have not improved as quickly as many stakeholders would like. Create a safe and open environment that allows for and promotes supplier-led solutions. Traceability: Traceability helps facilities — and ultimately the entire supply chain — maintain strict quality standards and effective recalls and minimizes supply chain disruption. In Focus: Enhancing the Sustainability of Existing Buildings Reporting and regulatory requirements, transparency, traceability, closed-loop manufacturing, and building strong communities are five key sustainable supply chain issues to consider. Collaborate with other business leaders Developing sustainable supply chains involves complex issues and intricate, sometimes fragile, connections. Last but not least, it can also lead to improved industrial relations. Large companies are integrating closed-loop thinking to increase resource-use efficiency, cut costs, and gain competitive advantage. There are some key practices, however, that can help guide businesses down the path to greater sustainability. Working with your industry peers is a great way to share knowledge about the sustainability performance of your suppliers. Preview Unable to display preview. Creating sustainable supply chains is no longer a choice. Waste must be reduced and, in most cases, must be reduced significantly. Trends suggest companies across the entire supply chain must now internalize these value chain effects. A system in which buyers and suppliers have agreed basic standards prior to any business relationship, based on milestones and improvements.

Technical reviews of systems mixed with worker roundtable dialogues and civil society engagement with factories and workers. However, current research indicates that the business case for more sustainable business operations is quite strong.

Sustainable supply chain companies

At the same time, the problems of unpaid wages, working hours, safe working conditions, freedom of association, environmental stewardship and workforce engagement have not improved as quickly as many stakeholders would like. What it means for any responsible business is looking at its values and ensuring they are practiced throughout the company and its suppliers. Social and environmental variables are the basis of sustainability and, not surprisingly, the basis of strategic, lasting site selection decisions. Many organizations, such as retailers, major brands and the U. These collaborations help prevent audit fatigue, training redundancy and mountains of paperwork for suppliers working to meet similar requirements from their customers. Your vision should be clear and concise not only to executive members of the company, but also every employee and entity involved, which can only be done if you have an accurate picture of the supply chain itself. Stakeholder engagement is necessary when identifying a site location where both business and community can thrive with sufficient environmental and social resources. Supply chain transparency starts with having visibility in your supply chain: Where did the raw materials come from? CH2M HILL's direct procurement organization has begun incorporating sustainability into the design, procurement and construction of projects by promoting the selection of suppliers and subcontractors that value sustainability. Firms looking to integrate closed-loop thinking should engage with partners and even competitors to explore innovative new opportunities to change the way resources are made, used, and repurposed. Incorporating sustainability into a company's supply chain is complex but the failure to act may be the biggest risk of all.

While more companies expand their sustainability programs to include suppliers, they struggle with implementation. Traceability: Traceability helps facilities — and ultimately the entire supply chain — maintain strict quality standards and effective recalls and minimizes supply chain disruption.

Unless buyers and suppliers recognise the fallacy in continuing to operate against these standards, they will continue to undercut the ability of many supply chain programmes to evolve.

sustainability issues in supply chain management

This allows for working conditions to improve beyond compliance over time and ensures the shared values of the buyer and supplier are implemented with transparency. Conclusion The sooner you establish a sustainable supply chain, the better, as the imperative to do so is only growing as time goes on.

Building a sustainable supply chain

Facilitating the Reporting Process GlaxoSmithKline GSK , a global pharmaceutical company, calculates that 40 percent of its total carbon footprint is embedded in the supply chain. These collaborations help prevent audit fatigue, training redundancy and mountains of paperwork for suppliers working to meet similar requirements from their customers. Create Meaningful Expectations: Interview and leverage experience and opinions of all stakeholders to create relevant documents to enhance the applicability, legitimacy and efficacy of policies. Strong supply chain communities: Ensuring a strong community and location is not only critical for an individual facility, but also provides big wins for an entire business and value chain. The noted benefits include the ability to reduce costs significantly with the potential to increase revenue through innovation and enhanced market demand. Waste must be reduced and, in most cases, it must be reduced significantly. With bottles now traveling an average of 1, feet instead of 1, miles, method has eliminated freight — a non—value-added cost — and reduced its carbon footprint. Whether addressed proactively or reactively, the first step is to understand what each topic means and how it enhances existing goals to reduce costs, mitigate risk, and increase speed to market. Many traceability systems offer facility-level tracking, using RFID and lot coding. Many organizations, such as retailers, major brands and the U. To craft your vision statement, seriously contemplate why you are addressing sustainability. In short, the supply chain dialogue needs to evolve from the perception of audit fatigue to the concept of proven transparency. There is some truth in this idea: too many poor quality audits at too many factories produce too little value.

The key is that we must invest in the suppliers, giving them assistances and incentives, so that they could be successful in their business, and hence, be sustainable suppliers.

Rely on their expertise in their market area and innovate together. Jigsaw image by billdayone via Shutterstock.

Corporate sustainability supply chain

Shutterstock fotdmike Open cast mine, Derbyshire, England Stakeholder pressure from investors, shareholders, customers and nonprofits to push sustainability into the supply chain has significantly increased in recent years, with a record number of shareholder resolutions on supply chains issued during the past two proxy seasons. Facilitating the Reporting Process GlaxoSmithKline GSK , a global pharmaceutical company, calculates that 40 percent of its total carbon footprint is embedded in the supply chain. New Balance Athletic Shoe Inc. Whether addressed proactively or reactively, the first step is to understand what each topic means and how it enhances existing goals to reduce costs, mitigate risk, and increase speed to market. Sharing best practices, for instance, can help businesses establish guidelines for implementing their supply chain reforms. She is a second-year student in the Bard MBA in Sustainability and has five years experience working in the food and agriculture industries. Give autonomy to the right talent: Procurement professionals have to navigate changing market landscapes with confidence. Incidents, challenges and tragedies can have a long-lasting impact on both corporate reputations and the resilience of the supply chain itself. While transparency is about getting visibility and acting on it, traceability further specifies and documents the precise path of a product, commodity, or process. Suppliers are classified into four groups of environmental performance, with each incorporating specific key performance indicators KPIs. This is especially the case when we are talking about emerging economies in underdeveloped countries such as Africa, parts of East Asia like Indonesia, Central America and parts of South America, In industries requiring raw materials that come from natural resources - mining and agriculture, for example - many companies do not have a choice but to source from the emerging economies endowed with such resources. The Electronic Industry Citizenship Coalition has developed the validated audit process that covers both social and environmental performance and includes an auditor certification program to drive for further consistency in audits. Create Meaningful Expectations: Interview and leverage experience and opinions of all stakeholders to create relevant documents to enhance the applicability, legitimacy and efficacy of policies.

This contributed article has been written by a guest writer at the invitation of Procurement Leaders.

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6 steps for a more sustainable supply chain