• September 22, 2023

Supply Chain Sustainability & Company Efforts in Maintaining Supply Chain Balance

Supply Chain Sustainability or supply chain sustainability refers to companies’ efforts to consider the environmental and human impacts of their products’ journey through the supply chain, from the sourcing of raw materials to production, storage, delivery, and at every transport link in between.

The goal of a more sustainable supply chain is to minimize environmental damage from factors such as energy use, water consumption, and waste production while having a positive impact on the people and communities within and around the company’s operations. So it also enables potential partners to demonstrate compliance with the best industry standards for worker safety, environmental protection and business ethics.

How to improve Supply Chain Sustainability (SCS)

To be able to improve supply chain sustainability (SCS) companies must take the following steps to achieve a more sustainable supply chain such as:

  • Identify critical issues and areas of improvement throughout the supply chain. The environmental impact of the supply chain is the culmination of every step in the production and operation process. Therefore, companies must understand where the most emissions and risks lie in order to improve SCS.
  • Use supply chain management and measurement tools to help track progress and spot weaknesses.
  • Select and collaborate with other sustainable suppliers. Collaborative practices and resource combinations between producers can help organizations reduce waste, costs and environmental risks.
  • Maintain accountability throughout the process. Processes that can be carried out to ensure compliance are regular audits, program implementation and sustainability teams, impact tracking software, and customer-facing goals and progress reports.

Benefits of Supply Chain Sustainability

Sustainability of the supply chain benefits not only the interests of the company itself but also society and the earth in general. Companies have realized that climate change, for example, could jeopardize their business continuity with the disruption of extreme weather and growing resource scarcity.

The following are business activities that often benefit from sustainability:

  • Supply chain operations The use of SCS indicates that energy costs are decreasing, for example, because the company is setting emission targets with suppliers and helping them identify potential areas for improvement. With this, of course, the company will experience a significant reduction in costs.
  • Investor relations. Institutional investors are well aware of the reputational risks of unsustainable supply chain operations. In recent years, the media has reported many irresponsible supply chain practices, and in some cases, of course, to the detriment of certain companies.
  • Developing training and capacity building programs. Another important step to improve sustainability and promote behavior change is the development of training and capacity building programs. When you demonstrate the success of your best suppliers, you encourage everyone to recognize their efforts and demonstrate the practical benefits of sustainability initiatives.
  • Compliance. Governments worldwide mandate greater supply chain sustainability. Once you have established compliance standards for your suppliers, the baseline supplier performance assessment is the starting point for future programs.