Supply Chain Sustainability: 6 Steps For Embracing Green Practices
Supply chain sustainability has been a growing topic for several years now, but with more protests, initiatives and the recent COP26 climate change conference, it’s more important than ever that businesses embrace green practices.
People are turning to businesses to lead the change and save the planet, so all eyes are on organisations and their supply chains. In many industrial sectors, supply chain operations use many resources (often non-renewable) and generate vast amounts of waste. For example, sustainability in construction supply chains is often the focus of attention, with construction-related sectors responsible for up to 45% of the UK’s carbon footprint. But that doesn’t have to be the case.
Corporate carbon footprints will always be larger than individual footprints — recent research found that 70% of the world’s waste can be traced back to 100 companies. But this means that by making simple changes, businesses can significantly impact global efforts to protect the planet and its people. As well as having the capacity to contribute to global issues, organisations also have the ability to tackle them.
Small changes can make a big difference. And when businesses go even further to prioritise supply chain sustainability, they could drastically reduce CO2 emissions, minimise the amount of waste polluting our land and oceans, and help slow down climate change.
So how can your business turn its supply chains into a sustainable powerhouse? Here are six tips for embracing green practices within your supply chain and taking your sustainability to the next level.
1: Gain A Deeper Understanding Of The Issues Affecting Your Supply Chain Sustainability
Before you can change the impact your supply chain operations have on the planet and its people, you need to ensure you understand your environmental, social and economic performance.
This means looking at each stage and supplier involved in your production flow and identifying where you can make improvements. Maybe certain operations could be made more energy-efficient, or demand planning processes could be more accurate, or perhaps you could optimise your supply chain routes to minimise the miles travelled by workers and materials.
Every aspect of your supply chain affects the sustainability of your business. So it’s essential to understand how sustainable your operations currently are, how sustainable they could be and the steps you can take to make the biggest difference.
2: Strengthen Supply Chains With Selective Procurement Processes
Your supply chain sustainability is about more than your internal efforts. You need your business partners to share your ethical values and commitment to green practices. With your suppliers on board with your sustainability goals, you can ensure the highest environmental, social and economic standards are adhered to at every operational stage, by all of your business partners.
To find suppliers who can strengthen your supply chain, you need to refine your procurement processes. When searching for individuals or businesses to join your production flow, consider introducing prequalification requirements.
You can ask supply chain partners to demonstrate their commitment to sustainability best practices, such as environmental certification or accreditation. Accredited suppliers will have been assessed to government and industry standards, proving that they have the necessary skills and experience to minimise the impact of their operations.
3: Ensure Maximum Supply Chain Visibility
End-to-end visibility is a crucial aspect of effective supply chain management, whether you’re striving for sustainability or not.
Poor supply chain visibility makes it difficult, near impossible, to effectively mitigate risks — including those relating to the environment and the wellbeing of people. You can’t identify factors threatening your supply chain sustainability if you don’t have insight into all of your operations and suppliers’ activities.
But when you have real-time insight into each stage of your supply chain, you can identify issues and active threats and take immediate action to resolve them.
Improving visibility means improving communication between your business and suppliers and using any available supply chain tools to do so. You need to make sure you can oversee your business partners’ activities and review their risk management policies and procedures. But most importantly, you need to ensure that you’re instantly notified of any issues threatening the sustainability of your supply chain.
Whether procedures are amended, affecting your emissions, or there’s a lapse in the compliance status of one of your suppliers, you need to be the first to know.
When you’re able to respond quickly to issues, you maintain sustainability, protect your business’s reputation and minimise risks that could leave people in harm’s way.
4: Improve The Accuracy Of Your Demand Planning To Minimise Waste And Emissions
Demand planning is a necessity in just about every industry, from manufacturing to construction. When you produce too many goods or materials, you use unnecessary energy and resources, generating more waste while costing your business time and money.
By increasing the accuracy of your demand planning, you can minimise the risks associated with overproduction and reduce your environmental impact.
You’ll need to analyse existing data from your business, such as information about past projects, seasonal sales and historical growth rate, and complete statistical forecasting. But once you’ve refined your approach to demand planning, this can improve the efficiency and sustainability of your projects for years to come.
5: Be Open About Your Sustainability Goals
Your customers, business partners and investors alike will appreciate transparency when it comes to your sustainability efforts. When you openly communicate about your endeavours, you can build trust and encourage your suppliers to get involved with making your supply chain operations more eco-friendly.
Being open also means acknowledging the current state of affairs regarding your supply chain’s environmental performance. If there are issues, accept them and talk honestly with those involved. You can’t make improvements until you know what’s holding you back from implementing eco-friendly practices.
When you take accountability, there’s also added pressure to address issues. Customers, suppliers, investors and stakeholders will all be expecting to see some change.
6: Consider The Geography Of Your Supply Chain
Moving goods, materials, or people from one place to another involves high levels of energy consumption. So the geography of your supply chain could be heavily impacting your sustainability.
By looking at your supply chain routes — the miles being travelled by your materials or people — you can find ways to optimise journeys, cut fuel usage and reduce emissions.
If you’re currently working with suppliers in other regions, consider finding local alternatives. If vehicles are returning empty-handed to your base, think about ways to cut these “dead miles” — combining pickups and deliveries, for example, or partnering with other businesses to share vehicle fleets and van space.
Even just finding alternative routes that involve fewer miles or more energy-efficient transport can make a huge difference to your carbon emissions.