Corporate Eye

Five Key Elements of Sustainable Supply Chains

green supply chains : five elementsOne of the hottest topics of debate surrounding business sustainability is how to introduce it in a broad ranging manner across all sectors.  Regulation seems to be one path, as will shortly be seen for greenhouse gas (GHG) emissions, but business’ instinct is always to see if the market is flexible enough to bring about change without a change in the law.

Supply chains are one of the key players in this deregulated approach because they allow engagement with both upstream suppliers and downstream clients and neither of these crucial relationships should be forgotten.

However playing your part in a sustainable supply chain is about more than engaging with your business partners.  There are five key areas of a business which should be addressed to ensure your company’s link is forged with strength and resilience.

Measuring Sustainability

Choose your key measurements carefully yet intelligently.  GHG emissions may be a given and office waste sent to recycling shouldn’t be too onerous to measure and report on.

It would be a good idea to introduce something linked to your industry as well.  This could be trickier to pin down, especially for knowledge services companies, which is why collaboration with peers through trade associations can be invaluable.  I’d also recommend adopting at least one social metric, for reasons discussed later.

These measures provide three valuable services: firstly they can be used to determine both financial and non-financial benefits to the business; secondly they can be used to drive forwards sustainability through the use of targets; and thirdly they can be used in discussions and negotiations within the supply chain.

Supply Chain Engagement

Once your measures have been settled the next step is to actively engage them in your upstream and downstream relationships.

A little imagination can see businesses reap significant rewards; returning waste packaging to a supplier for reuse in return for a discount on goods, for example, or suggesting to clients that video conferencing be the preferred forum for meetings thus saving time, petrol and GHG emissions.

In addition if you have a measurement which is industry specific this can help you form collaborative alliances which can start building best practice in that particular area.

As a final point you may even start selecting new suppliers on the basis of how their sustainability plans fit in with yours; so in turn publishing your measurements and successes can help your current and potential clients meet their sustainability goals as well.

Sustainable Operations

Although supply chains are all about a company’s upstream and downstream interfaces, what goes on inside the business plays an important role in creating a sustainable supply chain.  So creating a product sustainably (e.g. by recycling office waste) in one ambition, but another is to create a sustainable product.

In manufacturing this means following some basic principles as far as possible, such as biodegradable materials and cradle-to-cradle design.  For the services industries this can be a lot more tricky, but the same principle applies: make sure your offering is not just implemented in a sustainable manner but is of itself contributing to sustainability.

Again, industry specific metrics and peer group collaboration can really pay off here especially when it comes to formulating and leading best practice.

Social Responsibility

All the above has concentrated almost exclusively upon the product a business produces and are almost exclusively environmental in nature.  But what about the social side, the stakeholders involved in your products’ production?

These can be divided into three groups: people working directly for the company, people from the communities within which the company is based, and people who are otherwise affected by the company’s operations.

This is a very broad and at first glance frightening net to cast.  Those businesses which have had the greatest success in addressing this are those who understand not everything has to have an obvious financial return.  These businesses have engaged with NGOs and charities to help improve their workers’ health, the communities they’re embedded within and the wider world.

Social responsibility metrics are just as useful as environmental ones in the overall aim of creating a sustainable supply chain.  However they are less used and spoken about while environmental issues tend to hog the headlines.  For an ambitious and creative company, this means they could be a perfect opportunity for establishing best practice leadership.

Sustainability Leadership

It’s very easy to talk about sustainability but its actually much much harder to carry it out.  This year seems to have been marked by many leading thinkers saying “we’ve gone as far as we can with CSR, now what?”.  However I know many practitioners who see this as sustainability getting past the talking stage and starting to get into the hard grind of actually implementing it.  All the quick wins have gone, now the hard work starts.

This is where real sustainability leadership comes to the fore: companies which are prepared not just to talk or do sustainability but who are fully committed to being sustainable.

This is not just about what you do and how you do it, but how you engage those around you in the achievement of your ambitions.  Commercially, its about building sustainable supply chains.

Picture Credit: Green chain by S Braswell under SXU Standard License.  Trimmed by Chris Milton.

The following two tabs change content below.
A former CTO, Chris has a broad and varied background. He’s been involved with blue chips, consultancies & SMEs across a wide variety of sectors and has worked in Europe, the Middle East and Australia. In 2007 he decided to combine his knowledge of business and IT with his passion for all things sustainable and has been busy writing ever since. However, his greatest ambition remains to brew the perfect cup of coffee.