Many global supply chain management teams are trying to become more sustainable these days. When we say sustainable, we look to the Sustainable Supply Chain Foundation for a definition.
Sustainable supply chain management involves integrating environmentally and financially viable practices into the complete supply chain lifecycle, from product design and development, to material selection, (including raw material extraction or agricultural production), manufacturing, packaging, transportation, warehousing, distribution, consumption, return and disposal.
We can get even more understanding of what sustainability translates to mean by looking at the word’s synonyms:
As you can imagine when hearing these words, supply chain management sustainability has become more and more desirable. Let’s cover the benefits along with some challenges of converting to a sustainable system, with the help of some global experts who give insightful, real-world examples.
Benefits of Using Sustainable Practices in the Supply Chain
Looking again to the SCF for an explanation of why sustainable practices are beneficial, they state:
Environmentally sustainable supply chain management and practices can assist organizations in not only reducing their total carbon footprint, but also in optimizing their end-to-end operations to achieve greater cost savings and profitability.
More specifically, the benefits of using sustainable practices in the supply chain include:
- Improved financial results from eliminating waste and implementing long-term solutions
- The optimizations and innovations that come from this specific goal
- Promoting corporate values
- Positive public relations exposure
- Recognition from consumers in terms of increased sales and loyalty
- Higher stock share valuation
- Hefty tax and investment incentives
- Compliance with government regulations and laws
Challenges in Increasing Supply Chain Sustainability
Having grand aspirations of global supply chain sustainability can be as noble as it is responsible, but it doesn’t mean they don’t come about without challenges. For instance, the experts at English Blinds had to “get to grips” with taking a big picture approach when social, legal, and economic concerns intersect, while still trying to move forward in a cost-effective manner.
Indeed, costs can make it harder to adopt sustainable supply chains, as does the difficulty of monitoring complex processes from start to finish, the lack of buy-in (from executives, managers, and customers alike), and/or a lack of expertise in heading up such a massive endeavor.
Leak Points Where Sustainability Is Difficult to Maintain or Regulate
Leak points in supply chain management practices become a big problem if left unfixed. As an example, Beyond Retro mentions, “where we work with third party supplies, it’s harder to monitor how sustainable they are.”
The UK company English Blinds agrees: “Being able to identify and manage sustainability in suppliers and parts of the supply chain in other countries can be a real challenge in some regions; promises aren’t kept, claims aren’t always verifiable, and standards and cultural expectations around compliance can all be so variable.”
They share that “attempting to transition from the use of gas and diesel powered vehicles to electric ones is meaningless if the country or supply chain route that this is undertaken in produces the electricity that powers those vehicles by even less environmentally sound methods.”
Dan Fugardi, a managing partner of VantageBP, works closely with Fortune 500 retail companies. His goal is to address leak points in their supply chain and prevent counterfeits, rogue resellers, and grey-market sales from hitting the market. Dan says there are problematic results when such products end up “landing in the hands of sellers with whom the brands have no communication, oversight, or legal recourse. In other words, when a brand loses sight of where a product goes at any point in the supply chain, that brand completely loses control of their product.”
Product distribution has become the “Wild West,” as Dan puts it, where “people no longer need a retail business, or even a store, to acquire and sell products to the end consumer.”
To help tame the wilderness, VantageBP uses technology to react in real-time to misdirected products and act as a catch-net, prior to any product reaching the end consumer.
7 Steps to Making a Supply Chain Sustainable
While challenges and leak points do exist, don’t let them deter you. Be reminded of the many substantial benefits that come with a green supply chain management initiative, then take these seven steps toward making a sustainable supply chain:
- Map out a comprehensive plan by inventorying suppliers, identifying the biggest challenges, and prioritizing efforts.
- Continually communicate the new or revised values, expectations, and culture to those all along the supply chain.
- Set compliance standards by benchmarking and assessing a baseline performance for a starting point.
- Utilize technology to implement and maintain oversight.
- Educate and drive behavioral changes by leveraging the best sustainable supply chain management practices and case studies from top-performers.
- Measure performance improvements through an audit program, communicate the results, and act on the findings.
- Collaborate industry-wide to share knowledge and experiences.
Partner with Avetta
This is a lot to take on yourself, which is why Avetta is here. Our advanced supply chain management software provides the information you need for enhanced oversight of regulatory and policy compliance throughout your supply chain. It can be an invaluable asset in sealing up a variety of supply chain leaks.