In the second part of this blog I will go more into detail on the benefits and challenges that go hand in hand with your journey to a more sustainable supply chain and I will present a clear framework and some best practices that will help you reach your sustainability goals. Last but not least I will also share a few industry trends concerning a sustainable supply chain.
Let’s get right into it with what might be one of the more import considerations for adopting a more sustainable supply chain: the benefits!
As a company your goal should be to work towards a better, safer and more sustainable way of conducting your business, not only because it’s simply the right thing to do, but also because it will bring you clear and measurable benefits.
Reductions in carbon emissions, energy consumption and waste generation will considerably improve your environmental performance on the one hand, while positive contributions to local communities, worker welfare and human rights will enhance your social impact, in turn greatly impacting your ability to hire and retain loyal employees and customers.
Efficient resource utilization, waste reduction and streamlined processes will reduce costs while differentiation in the market, attracting eco-conscious customers and potential investors will give you a competitive advantage.
Where there are benefits, there are usually also challenges. Let’s have a look at those!
A lack of supply chain visibility due to limited transparency across complex supply chains makes it difficult to identify and address sustainability issues.
An even bigger challenge I feel is that sustainability efforts must extend beyond the immediate suppliers. It is important to assess and collaborate with suppliers at multiple tiers within the supply chain to ensure adherence to sustainability standards.
Navigating varying international regulations and compliance requirements can be complex and resource-intensive. Some suppliers and stakeholders may be resistant to adopting sustainable practices due to cost concerns or operational challenges.
Establishing consistent metrics and standards for measuring sustainability performance can be challenging.
Now, getting to the “how?” of the matter. How can you create a sustainable supply chain?
I have created a specific framework with actionable steps you can follow that will help you in paving the road to a more sustainable supply chain:
1. Assess and map: Evaluate the entire supply chain, identifying environmental, social, and economic risks and opportunities and do a maturity assessment.
2. Set standards and goals: Define sustainability criteria, establish targets, and communicate them to suppliers, partners and stakeholders.
3. Collaborate and engage: Foster partnerships, knowledge-sharing, and joint initiatives with suppliers and stakeholders.
4. Monitor and measure: Develop metrics and performance indicators to track progress towards sustainability goals.
5. Innovate and improve: Continuously seek innovative solutions and technologies to optimize sustainability efforts.
6. Communicate and report: Transparently communicate sustainability achievements and progress to stakeholders.
As support on top of the framework I really want to highlight the following best practices:
- Stakeholder engagement: Engage with customers, employees, and local communities to understand their sustainability expectations and incorporate their feedback.
- Supplier engagement: Collaborate closely with suppliers to drive sustainability initiatives and ensure alignment with standards.
- Training and awareness: Provide training and awareness programs to educate employees and suppliers about sustainability practices.
- Continuous improvement: Regularly assess and improve sustainability performance through data-driven decision-making and periodic audits.
- Industry collaboration: Participate in industry associations and collaborations to share knowledge, establish common standards, and drive collective progress.
Finally, as a dessert to this 2-part blog on building a sustainable supply chain, I want to share with you some trends I see in the industry:
Adoption of circular economy principles to reduce waste and promote resource efficiency.
Leveraging technologies like blockchain, AI, IoT, and setting up a control tower as part of digital transformation, for improved transparency, traceability, and efficiency.
Shifting towards eco-friendly packaging materials and designs to reduce waste and environmental impact.
Increasing focus on building resilient supply chains that can withstand disruptions and adapt to changing conditions.
Collaboration among supply chain partners is crucial for achieving sustainability goals. It enables the sharing of best practices, joint innovation, and collective efforts to address systemic challenges.
By embracing supply chain sustainability, organizations can create a positive impact on the environment, society, and their bottom line. It's time to take the lead and build a sustainable supply chain that drives long-term value while fostering environmental stewardship and social responsibility. Together, let's pave the way to a responsible and resilient future!
Jonas Sabbe, Industry Advisory Consultant