A Guide to Sustainable Supply Chain Management

What Is Sustainable Supply Chain Management?

sustainable supply chain management

Sustainable supply chain management is the management of environmental, social, and economic impacts, and the encouragement of good governance practices, throughout the lifecycles of goods and services.

It’s common for businesses to implement sustainability in their storefronts. For example, they might:

  • Turn to e-receipts only.
  • Use paper bags, reusable bags, or no bags at all.
  • Utilize natural light to brighten their store.
  • Use low-flow toilets and urinals in public bathrooms.

However, even though these sustainable methods are helpful to an extent, it may not be enough for an organization to completely call themselves an “eco-friendly company.” Businesses should also pay attention to the way their inventory is being supplied and managed. When a company instills sustainability into its supply chain, it can help to ensure overall product quality, as well as reduce negative impacts on the environment.

Environmental Impacts of the Supply Chain

More than 80 percent of greenhouse gas (GHG) emissions come from the traditional supply chain. This high number may be an average of all supply chains combined, yet fast fashion and other apparel industries contribute more to the overall figure. What these industries may not understand are the many risks associated with supply chains that don’t practice sustainability. These risks include:

  • Damage to ecosystems.
  • Hazardous air emissions.
  • Loss of habitats.
  • Production of toxic waste.
  • Water pollution.

Benefits of Sustainable Supply Chain Management

When supply chain managers prioritize eco-friendly methods, they pass benefits not only to the environment but to businesses and their consumers as well. 

For Businesses

In a 2018 report linking sustainability claims to sales, researchers state that “as society becomes more aware of the social and environmental impact of products and services, consumers are becoming more mindful of their purchases.” The same report also shows the increase in sales of products that prove to be sustainable, as opposed to products that are not.
Aside from meeting customers’ expectations, sustainable supply chain management can benefit businesses by:

  • Attracting future customers.
  • Creating partnerships.
  • Improving diversity in products being supplied.
  • Optimizing operations.
  • Reducing their carbon footprint.
  • Saving in company expenses. 

For Consumers

Just as with businesses, there are numerous benefits for the consumer that result from companies going green. “Adopting a sustainable behavior makes people apt to make other positive changes,” reporters write in an article titled “The Elusive Green Consumer.” A positive change in behavior is just one of the benefits. Others include:

  • Ability to purchase quality products that meet their needs.
  • Access to excellent customer service.
  • Knowing where their products come from.
  • Open communication with the supplier.
  • Variety of products to choose from.

How to Build a More Sustainable Supply Chain

If your business, whether it be big or small, isn’t already maintaining a sustainable supply chain, then implementing the following tips can help you achieve the goal of going green.

Identify Issues

Prior to adding new procedures into its daily routine, a business should first identify any issues that may be wrong with its current one. Some of the issues that may be addressed are ones that specifically have an environmental impact, such as:

  • Air, water, and land pollution.
  • Increased fossil fuel consumption.
  • Overproduction.
  • Unethical sourcing.

Businesses will want to take these specific challenges into consideration in order to come up with a solution for how to best handle them.

Audit Current Suppliers

Acknowledging issues doesn’t end with internal operations. Businesses should also address their current external operations and contacts, such as product suppliers, and analyze what they’re doing well and what they may need to improve. Some may find their suppliers are already reducing their manufacturing waste. If this is the case, then improvement may not be needed. However, if not, then common issues to look for when auditing current suppliers are:

  • Amount of waste being produced.
  • Analyzing statistics to monitor performance levels (which show if they are meeting expectations).
  • How transparent they are in communicating their daily operations.
  • The way in which the goods and services are created.

Choosing a supplier that is already working to save the environment can relieve the pressure of having to audit them in the first place.

Educate and Inform

In order to practice sustainability, one should be educated on how to do so — especially organizations, employees, suppliers, and consumers. Not only should they know how to be sustainable, but they should know what happens when they are. Keeping up to date on sustainable standards and providing training to everyone in the organization can help to ensure everyone within the company is on the same page. Business owners can gain knowledge to spread to their employees by:

  • Attending conferences.
  • Sharing insights amongst those in the industry.
  • Working together to achieve a common goal.

Embrace Technology

Technology has many benefits to sustainability in business, even more so in manufacturing. According to an article published on Forbes, technology:

  • Enables measurement.
  • Improves efficiency.
  • Minimizes risk.

Implementing the right inventory management software solution is just one way technology that can benefit businesses in an eco-friendly way. More specifically so by accurately keeping track of goods and services, ultimately allowing them to see different opportunities for improvement by analyzing data produced by these software solutions.

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