business sustainability

Business Sustainability – An Essential

January 15, 2021 Blog

Sustainability is the future, and it is more important than ever that your business’ supply chain establishes a sustainability program. Sustainability is a business approach to creating long-term value by taking into consideration how a given organization operates in the ecological, social and economic environment. Sustainability is built on the assumption that developing such strategies foster company longevity. This program will help you understand the level of social, environmental, and economic impact and viability that your suppliers and customers have. There may not be government pressures to push sustainability, but there are already corporate pressures on suppliers and vendors. Sustainability is more than just going green and being environmentally friendly.

Sustainability practices are evolving and becoming more integrated with other traditional supply chain and operations processes. Sustainability is becoming better defined vertically within an organization, and better defined horizontally in terms of metrics, measurements and standards globally across industries. Sustainability is becoming more integrated with other traditional supply chain operations processes due to related innovation, new technologies, new processes and stakeholder preferences.

Sustainability in the Global Supply Chain

Global supply chains are complex systems, encompassing all the interconnected stages that are required to create and transport goods and services from suppliers to consumers. Supply chains link different businesses together through logistics with the intent of efficiently using resources across the entire chain, necessitating a great deal of collaboration between companies. Managing and optimizing these material flows with their associated business relationships is the focus of supply chain professionals around the globe. Successful supply chain management matches production to consumer demand, maintains low inventory levels and creates value.

Sustaining and Maximizing Your Supply Chain

In practice, supply chain sustainability interacts with almost every supply chain component, whether in simple or complex supply chains. Supply chain sustainability practice should be a consideration in decisions involving strategy, tactics, goals, processes, trade-offs and outcomes in all levels of supply chain management. Sustainability risks have previously been defined as risks that are due to environmental or social justice issues and numerous examples have highlighted how they can affect companies at an existential level, both for the better and for the worse.

For example, if the product design is dependent on material or process that is critical from an environmental or social perspective, there is a risk of legislative restraints, increasing costs, and decreasing customer demand, threatening company profitability and competitiveness.

A risk optimized supply chain balances risk and reward. Supply chain sustainability becomes a risk-reward consideration. In addition, as sustainability practices seek more lean and less resource-intensive operations, risk reduction gained by reduced use of resources is a shared goal of supply chain risk and sustainability.

Measures for Supply Chain Sustainability

  1. Map your supply chain
  2. Communicate Expectations
  3. Know the impact
  4. Leverage technology
  5. Establish long-term sustainability goals.
  6. Let first-tier suppliers set their own long-term sustainability goals.
  7. Include lower-tier suppliers in the overall sustainability strategy.
  8. Task a point person on staff with extending the firm’s sustainability program to first- and lower-tier suppliers.

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