What is a sustainable supply chain?

Sustainability

Is a trendy word these days, isn’t it?

We have learned that by following sustainable practices we can reshape our planet into a healthy, eco-friendly place. 

But how common is it to discuss sustainable supply chains?

Supply chains are what keep the way we buy and consume products moving. If a business based in New Jersey has clients based in France, its logistics is going to need some upgrades, the same happens with a company that wants to use raw materials from the other side of the world.

Things need to start moving, containers, ships, airplanes, workforce, and the list goes on. 

But what if we could do all of that with a different mindset? 

What if we could still care about bringing profit for businesses and at the same time keeping our environment in good shape? 

That’s what we are going to talk about today 

What’s a sustainable supply chain?

The COVID-19 pandemic might have been one of the biggest disasters in recent human history, and yet it’s impossible to deny that of all the changes that it caused, our increasing concern for our planet is certainly something positive. So forming a cohesion between sustainability and the supply chain makes a lot of sense. A sustainable supply chain is the one that besides focusing on profitability and business metrics, has managed to integrate environmental and social practices into its process. 

For example, instead of relying on a supplier that’s miles away from your location, you choose to work with local vendors, this has a double effect, on one side you are reducing greenhouse emissions, and on the other, you are promoting the economic development of your community. 

Two basic aspects 

While it might appear that a sustainable supply chain solely focuses on acquiring good environmental habits, like minimizing greenhouse emissions or switching to renewable energies, that’s only half of the work, social responsibility is as important. Making sure that from the very beginning to the ending, all the processes respect human rights and the communities where located. 

So you could say that a truly sustainable supply chain is holistic? 

Yes, let's see why

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Key Aspects of a Sustainable Supply Chain 

People:  

It's no wonder that at the heart of sustainably, we find our society, our communities. After all, humans are the ones who might face the most consequences of a nonsustainable future. For supply chain management this means asking the right questions.

• Who's my vendor and what sort of social reputation it has?
• Is my supplier network benefiting my community?
• Are there any possible sources of complaints against my suppliers, i.e, not respecting fair labor practices?
• How can I improve the impact my business has on the community?

While these questions are only a glimpse of what goes into a fully designed sustainable supply chain. The intention is clear, modern supply chains need to consider the value people have in their operations and the concrete ways businesses can give back to society . 

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Planet

It’s a consumer demand and a necessity at the same time, so why you wouldn’t want to shift your attention to environmental matters? For supply chain managers, this means giving a special focus to issues like:

• What amount of waste is generated by my logistics? 
• Are your suppliers creating considerable levels of pollution? What are they doing about that?
• What’s your supply chain’s carbon footprint? What about water usage? 
• Is your supply chain relying on recycled materials? How often? 

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Achieving complete sustainability is not a simple task, there are a lot of factors that need to be considered and a whole more metrics to take into account. But don’t panic, in a moment we’ll review the best strategies to help you create a sustainable supply chain. 

Profit

Yes, sustainability is all about social and environmental values, but what would be the point of that if companies couldn’t keep their operations in the long run? What you want to achieve here is the correct balance between helping the planet and improving the efficiency of your operations. Usually, this begins with digitalization.

Why it’s important?

It might be tempting to see sustainability as a trend, which only makes noise temporarily. 

Tempting but not real. 

If we were to make a list of the reasons why we need to invest in sustainable practices, we would need hours if not days to complete it. In the specific context of supply chain management, the reasons can be limited to the big four arguments. 

It’s what the market wants 

Regardless of the industry, all businesses, small or large work around what the market dictates.  Well, what the market wants, consumers and investors alike is to side with companies whose operations are aligned with sustainable goals.  Information is nowadays at the fingertips of people, so when a potential customer goes and searches for your supply chain on the internet, you want them to see that you don’t have any red flags in your operations. 

Ultimately, including sustainability in your supply chain will not only attract more customers, it also give them reasons to stay loyal to your brand. 

Climate change 

Some years ago, we were inclined to believe that climate change was a concept for the future, a problem that we wouldn’t witness messing with our daily activities. As it has become obvious now, we were wrong, so much so that instead of discussing how we could stop climate change from happening, we try to find ways to adapt ourselves.  Yes, clients prefer sustainable brands but if we stop for a moment to think about, it’s not like businesses have much of an option. Natural disasters, scarcity of resources, and communities directly impacted are becoming the new sad normal. 

More legislation

People know about it, businesses know about it, and so do politicians. The importance of investing in sustainable models for supply chain operations hasn’t been ignored by politicians, hence the increase in the number of laws focused on sustainable supply chains. From reporting how businesses are helping to eradicate human slavery in their supply chain, to briefing the government about their efforts to keep the planet safe in their operations. Many countries have very strict regulations aimed at promoting sustainable business practices. 

Higher resilience 

Remember that we just mentioned how a sustainable supply chain is also meant to be profitable? Let’s say, for example, that to reduce your supply chain carbon footprint, you choose to diversify your supplier's network and start working as well with local vendors. In case something happens and your overseas supplier is no longer an option, you can simply turn to those suppliers closer to you, reducing the risk of disruptions. 

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Sustainable supply chain strategies 

Review your whole supply chain 

What better place to start than the beginning? Think of your supply chain as a series of steps that can be visually represented as a map, when you look at it, you can be sure of what’s happening and what’s the next destination, right? This becomes certainly useful to gain insights into how well or not your supply chain is faring regarding sustainability. 

Set standards for your suppliers 

Once you have a clearer picture of the situation surrounding your supply chain, you can decide what sort of requirements your suppliers need to fulfill. If you pride yourself on directing a brand that’s eco and social-friendly, you are going to need to work only with suppliers aligned with those values. 

Adopt circular economy principles

Recycle, reuse, and renewal energies

Recycle materials whenever possible, reduce packaging, and set programs within your customers that promote a sustainable way of changing or upgrading products. Consider investing in renewable energy. 

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Final Thoughts 

As consumers and investors realize that sustainability is a necessity,  businesses are seeing themselves directed towards positive change in their operations and success that can be celebrated by people and the planet alike The transformation of supply chains is ongoing, and isn’t free of challenges, on the contrary to what happens with other businesses practices, building a sustainable supply chain isn’t just about profit, it’s about building a better future for ourselves. 

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