Nov 16,8: In a world where supply chains can be extensive, monitoring and ensuring due diligence is no easy task.
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.
By managing and improving environmental, social and economic performance throughout supply chains, companies can conserve resources, optimize processes, uncover product innovations, save costs, increase productivity and promote corporate values.
Research shows the business case for supply chain sustainability is growing. While more companies expand their sustainability programs to include suppliers, they struggle with implementation. However, they are not yet supporting expectations with concrete actions that drive sustainability performance in their supply chain.
Incidents such as the factory collapse and fires in Bangladesh last year highlight the need for increased and urgent actions in this area. Companies can take several initial steps to move toward sustainable supply chains: Map your supply chain Many companies do not have a comprehensive understanding of the sustainability impacts of their supply chain.
An early step is to inventory suppliers, identify the most significant environmental and social challenges they have, and prioritize efforts with suppliers.
New Balance Athletic Shoe Inc. The company reduced its footwear supply chain by 65 percent and is focused on forming strong, positive partnerships with its suppliers.
Some criteria that may be helpful for prioritizing suppliers include level of spending, importance to business continuity, and geography as a proxy for risk. CH2M HILL established a supply chain sustainability strategy for evaluation and election of products, complete with procedures, tools, communications, training and metrics for reporting implementation progress.
Tier 1 and Tier 2 suppliers are required to provide information about their sustainability programs and demonstrate continuous improvement.
Suppliers are classified into four groups of environmental performance, with each incorporating specific key performance indicators KPIs. Communicate expectations Focusing on sustainability within your supply chain is a great way to communicate corporate values and culture to your suppliers and customers.
Establishing and communicating expectations through a supplier code of conduct is a critical step in involving suppliers in your sustainability efforts. Many resources and tools have been created to assist companies with the development of a supplier code of conduct.
Baseline supplier performance Once you know who your target suppliers are and have set compliance standards, collecting data from suppliers through a simple benchmarking questionnaire or self-assessment will provide you an understanding of your starting point.
Many organizations, such as retailers, major brands and the U. Federal Government, have started evaluating the performance of their suppliers through questionnaires and surveys.
Increasingly, organizations incorporate all areas included in their code of conduct with special focus and weight in the self-assessments related to areas that are important to their business.
Our client work shows that more companies are aligning the content of their assessments with the GRI guidelines and CDP questionnaires. Some sectors, such as the electronics Electronics Industry Citizenship Coalition Self-Assessment Questionnaire and pharmaceutical Pharmaceutical Supply Chain Initiative Self-Assessment Questionnaire industries, have developed industrywide surveys to reduce the burden on suppliers of responding to multiple requests for information that varies in content and format.
The baseline assessments form the starting point for future programs to improve supply chain sustainability and help assess where the greatest need for improvement exists.
The information is used to compile the environmental metric in the annual scorecards for top tier suppliers and to identify opportunities to partner with suppliers to advance business practices in target areas Communicating back to suppliers in a constructive way is critical for future engagement and provides encouragement for improvement.
Develop training and capacity building programs This is an important step in improving sustainability and driving behavioral changes throughout your supply chain.
Many external resources are available to support these efforts and some are tailored to specific sector needs.
In our experience, one effective way to transfer knowledge across the supply chain is to leverage the best practices and case studies from top performing suppliers at annual vendor conferences, via online training modules and through capacity building campaigns.
Join Eddie Davila for an in-depth discussion in this video, Creating sustainable supply chains, part of Supply Chain Foundations. Creating value from source to shelf with a sustainable supply chain. Creating a Sustainable Supply Chain. By Antoine Foster, Verizon Green Team member. Verizon’s Sustainability mission is to utilize and promote sustainable business practices that reflect our commitment to the economic, environmental and social responsibilities we have to our customers.
By showcasing the success stories of selected suppliers, companies not only recognize their efforts but also demonstrate the practical benefits of sustainability initiatives to others in the supply chain. For example, HP has established supplier- and peer educator-run programs that have provided training to a large number of workers.
Through programs conducted jointly with its first-tier suppliers, HP has already trained second-tier suppliers, leveraging the investment and knowledge-sharing efforts dedicated to Tier 1 supplier capacity building. Drive performance improvement Once supplier baseline performance is understood, an audit program can measure performance improvement over time.
While in many cases, the self-assessments are completed by a corporate group, such as EHS, procurement or marketing, onsite audits can reveal local practices, behavioral challenges and practical opportunities for improvement that are difficult to identify through questionnaires alone.
Once your organization implements an audit program, be prepared to act on the findings by developing and executing corrective action plans by clearly communicating the results and your expectations to suppliers, developing a capacity-building program and, if necessary, terminating suppliers if non-compliance persists.
Assessments and audits paired with incentive programs that reward sustainability efforts have a greater ability to drive sustainability performance.Specifically, a preemptive shift to a sustainable supply chain has positive business impacts including risk management, realizing gains through more efficient operations and creating sustainable products.
[INFOGRAPHIC] How to Create a Sustainable Supply Chain. This is a great infographic sent to us from Snap Parcel and we thought it was a great subject for us to all talk about! shares; Adam Robinson. Creating a Sustainable Supply Chain – Best Practices and Business Drivers. Guest Contributor - June 12, PM | realizing gains through more efficient operations and creating sustainable products.
“Why a Sustainable Supply Chain is Good Business,” noted that in a sustainability effort. Creating a Sustainable Supply Chain. By Antoine Foster, Verizon Green Team member. Verizon’s Sustainability mission is to utilize and promote sustainable business practices that reflect our commitment to the economic, environmental and social responsibilities we have to our customers.
From identifying suppliers that need your attention and simplifying audit finding and action management processes to providing capacity building tools to help create a sustainable, effective and resilient supply chain technology is most definitely part of the solution.
That didn’t necessarily make the company more environmentally friendly than competitors, but Tiffany did gain much more control over its supply chain, which became important later on.