In recent years the term sustainability has grown in importance to businesses in all sectors. It deals with not only the environmental aspects but also covers the realm of social and economic development. Sustainability has now become an absolute must to keep businesses ahead of their competition,
Here in this blog, we will explore various benefits of supply chain sustainability.
What is a supply chain?
A supply chain refers to a connected network of individuals, organizations, resources, technologies and activities involved in the creation and sale of the product. The whole supply chain process starts with delivering raw materials from the supplier to the manufacturer. It ends with having the finished product or service to the end customer.
Why is supply chain sustainability important?
Supply chain sustainability is an approach carried out by organizations to make sure their supply chain network has a minimum negative impact on human beings and the planet. The main agenda of a sustainable supply chain is to minimize the harmful effects on the environment from factors like energy usage, water consumption and waste production and, simultaneously, positively impact the people associated with it. It has now become a crucial part of business growth and development. With the growing concerns regarding the environment, consumers are keen to know that the goods they buy are responsibly sourced, both environmentally and socially.
Three main elements of supply chain sustainability
Social responsibility: Socially sustainable practices promote the well-being of an individual or a society. It ensures that every individual within the supply chain network is treated fairly and agrees with human rights and labour laws.
Environmental responsibility: It entails protecting the environment from the potential damage caused by a business’s working, operations, suppliers, and partners. Environmental sustainable practices are those that cause no harmful impact on the environment in the long run.
Financial responsibility: Economically sustainable practices focus on long-term economic goals. It involves addressing the business’s financial needs, from shareholders, employees and customers to business partners and financial organizations.
Benefits of sustainable supply chain
Reduce environmental impact:
If your supply chain is sustainable, the most crucial benefit it provides is the less harmful environmental impact. Logistics is an integral part of the supply chain dealing with everything to be shipped. A well efficient logistics will help to reduce carbon emissions, thus moving a step forward toward a sustainable supply chain. Moreover, sustainability in the supply chain will help reduce waste and increase the efficiency of vehicles and machinery, which will further help you enjoy some substantial financial returns.
Improve supply continuity
Sustainable supply chain practices can help you understand risks and assess and monitor how your suppliers manage those risks. Being reliant on a single supplier for all the goods and services can lead to disruption in companies working. A more diverse and robust supply chain can help avoid unexpected troubles, preventing costly downtime and reputation damage. Thus, companies must engage with suppliers worldwide to maintain the continuity of their products and services.
Enhance brand reputation
It is essential to protect your brand reputation to intensify business growth. Supply chain sustainability also helps to build a strong brand reputation. As environmental issues grow, people are concerned about the planet more than ever. If you apply a sustainable business approach to your business, there is a greater chance of your business coming into the limelight and holding a good brand reputation. Besides environmental issues such as forced/child labour, ethical sourcing also falls under a sustainable supply chain umbrella.
Businesses nowadays are rapidly moving in the direction of sustainability. A company with a sustainable supply chain is also desirable to other firms. With the help of sustainable partnerships, your company can increase sales, enhance its reputation with customers, and make sure that it has a long-lasting positive impact on the globe.
Gain More Businesses
One of the most acceptable ways to attract more business is by highlighting your green credentials and demonstrating that you’re taking necessary steps to reduce the negative environmental impacts on our world. Most consumers are more likely to purchase from a business known for its sustainability. Given sustainability’s growing attention on a global scale, having green credentials can distinguish between winning new business and seeing it walk away.
Compliance with rules and regulations
With the growing concern for the environment, sustainability regulations are also rising. To protect the business from any legal consequences in future, the organization always conduct business in compliance with the rules and law.
Steps to build a sustainable supply chain
Detailed mapping of supply chain
The first step to constructing a sustainable supply chain is outlining where to focus your efforts and identifying which issues to prioritize. You must analyze the whole supply chain and understand the areas for improvement. While undertaking this supply chain mapping, it must be kept in mind that sustainability should be regarded as the critical point of focus.
The supply chain is an interconnected network of suppliers. All the suppliers in the supply chain network must be engaged in sustainable practices. Only then sustainability in the supply chain can be truly achieved.
For constant engagement with suppliers, the subsequent can also be undertaken:
- Delivery of training programs on sustainable practices.
- Communication expectations regarding sustainable supply chain operations.
- Instituting recognition/rewards packages for achieving sustainability desires.
One must define the focus areas for sustainability and set the metrics and KPIs. With the help of sustainability benchmarking, you can find the areas of improvement and set up KPIs/KRAs that challenge the business to strive for best-in-class performance.
Incorporation of technology
The size and complexity of global supply chains demand the incorporation of modern tools and technologies to address the areas of weakness and opportunities to improve supply chain management. For instance, software tools for inventory management may be used to enhance the procurement system and minimize inventory carrying costs. With the help of cloud-based technologies and AI, the business can collect real-time data and the most efficient and sustainable shipping routes. Data can also help foresee the potential risk and take necessary steps to mitigate its impact.
Supply chain sustainability does not harm the environment, economy or human society. Incorporating sustainability in the supply chains will provide us with plenty of benefits such as reducing environmental impact, Improving supply continuity, enhancing the brand reputation and many more. Since the supply chain is a vast network, bringing sustainability into it is not very handy. One must follow steps like carefully mapping their entire supply map, engaging other suppliers, using performance metrics and incorporating modern trends and technologies to ensure they’re on the right track towards supply chain sustainability.
BOXXPORT is an open marketplace that allows people from all around the globe to buy and sell shipping containers online. With its sustainable practices, BOXXPORT has established a greater presence in the container trading market. Visit our page for more information.