With businesses increasingly conscious of the need to take greater social and environmental responsibility, supply chains are under growing pressure to become more sustainable.
It is an unsurprising move, with fashion supply chains currently under great scrutiny and some of our most well-known brands such as Apple and Starbucks who can have immense brand value destroyed if any link in their supply chain is reported to have unethical or unsustainable practices. In light of this, it’s only natural for companies to start looking at the long tail of their suppliers. Heightened awareness amongst end-customers and consumers is putting increasing pressure on brands to demonstrate how everything they’re involved in, whether owned or not, is as sustainable as possible.
But how achievable is this idea of a truly sustainable supply chain?
The global footprints of most businesses, particularly brands and retailers selling physical products, means that to achieve the goal of true sustainability is a major challenge. Ultimately, most supply chain decisions are governed by cost, a situation that is unlikely to change as businesses seek to cut as much expense out of their operations as possible to stay afloat in the current climate.
While some of those decisions help sustainability efforts (for instance with slow-steaming container ships, reducing both cost and emissions), others directly hinder it.
But leading brands have already achieved great things and are increasingly looking for new ways to manage and monitor their global supply chain more carefully. From inventory visibility to capacity planning. But when it comes to sustainability and environmental efficiency, companies need to be reaching beyond their own four walls.
Sustainability comes down to the entire network
One of the major challenges is that even a small network can involve multiple parties and providers. These in turn have their own suppliers, manufacturers and material sourcing partners. Then there are logistics companies to factor in. Each of these has its own priorities, stakeholders and pressures that all need managing.
And they do need to be managed. As highlighted above, it is something end-customers increasingly expect – that the brands they choose to support are not only as sustainable as possible within their own organisations, but that they can also commit to ensuring the same rigour from their suppliers and wider network.
It is time for businesses to look outside their four walls and accept accountability in order to build a more sustainable supply chain.
Network visibility is key
The first step in becoming a more sustainable supply chain is becoming a more responsible supply chain. What is needed is greater transparency, the same driver that is helping make supply chains more cost-effective, more agile and more resilient. Why? Because it enables better decision-making, critical in building and enabling sustainability.
Brands need to be able to look down the length and breadth of their suppliers, whether manufacturers or logistical providers, and understand how each of these businesses contributes to the overall goal of being more sustainable. In much the same way that they need to balance cost effectiveness with service quality and resiliency, they need to see how a decision at one point has ramifications for the sustainability, or lack thereof, of other parts of their operations.
It is only through establishing this that businesses can start to plan a supply chain which is more sustainable, as well as meet any other business goals the function has, by starting to make decisions with a clear understanding of the consequences of each choice.
At the heart of this is the ability to build a data-driven, transparent network that can react effectively and with speed to unexpected events. When combined with the principles of having the most sustainable partners and routes, from raw material sourcing right through to distribution, the result is a more sustainable supply chain that meets the demands of end-customers.
It all comes down to responsibility
Building an entirely sustainable supply chain may seem to be beyond the reach of businesses today. But organisations can take significant steps to plan and build a network of suppliers and logistics providers that is as sustainable as possible, aligned with their own goals and the expectations of the end-customer.
It comes back to responsibility, knowing where it lies and holding every part of the network to account. This can only be achieved by having a clear understanding of the entire chain with increased transparency.
Antony Lovell is VP for applications at Vuealta