5 Essential Steps For Building a Sustainable Supply Chain.
Not only is “sustainability” a huge buzz word in today’s market, it’s also a huge driver of business. From SMBs to Fortune 500s, companies around the world are implementing sustainability standards to gain new business, maintain growth, and remain globally competitive.
Once the realm of niche markets, sustainability is becoming mainstream – whether manufacturers like it or not. As world governments increase regulator initiatives to combat global warming, and world-wide agreements such as December’s COP 21 Accord gain more traction, it’s nearly a foregone conclusion that manufacturers will soon be forced to go green.
By taking proactive steps, you can better prepare your supply chain for the changes ahead. From the National Bureau of Sustainability, here are 5 Essential Steps For Building a Sustainable Supply Chain.
Define Your Objectives.
By defining your objectives at the outset, you directly address how management intends to communicate sustainability initiatives both internally and externally. And by crafting an in-depth business case that demonstrates projected costs and payback periods, you insure management is able to aptly articulate both the short and long term benefits of sustainability standards to investors, incumbents, and staff.
Outline Realistic Expectations.
Adequately implementing meaningful and effective policies within any organization requires competent and comprehensive documentation. By leveraging the experience of your stakeholders, you can craft these documents quickly, greatly enhancing applicability and efficacy, while at the same time greatly mitigating risk across the supply chain.
Moreover, conducting environmental research for international supply chains is a critical step in anticipating potential challenges and drafting proactive management strategies. Reviewing and applying existingstandards where applicable will ease any transitions, bolster efficiency in both old and new processes, and avoid audit fatigue.
Increase Communications During Supplier Selection to Target Consensus.
Implementing focused supplier interview process helps you qualitatively measure your supplier base in both the selection and development phases. Increasing supply chain visibility is key to fostering open, safe, and trusting solution environments for you and your suppliers.
Further, working closely with your supply base to develop mutually beneficial KPIs and sustainability benchmarks builds a strong foundation for consistent data collection. This is an essential element for concision and clarity in eventual third-party inspections.
Review Your Suppliers and Support Their Development.
Improving program performance is reliant on two key factors: performance and education. When subpar performance begins to impact sustainability targets, the entire program begins to falter. Drafting and implementing stringent sustainability goals not only enforces accountability across a supply chain, but also a sense of camaraderie toward a singular goal. Developing a continuing education program that helps suppliers – and those within your organization – precisely understand causation and why failure points occurred is essential to maintaining high performance.
Use Past Success for Future Growth.
But don’t simply focus on failure. Pinpointing and acknowledging past success is a monumental driver of future growth. When something succeeds, point it out. Recognition breeds connectivity. Connectivity builds trust. Trust creates transparency, the core concept of continuous improvement.
There’s no doubt that transitioning to a more sustainable supply chain is risky. There are often significant upfront costs. And corporate culture shifts can have long lasting implications. However, the benefits of making the change are enormous. Not only can you reduce long-term costs, but you can also dramatically increase long-term revenues.
While sustainability is not a remedy for all supply chain woes (see Chipotle’s Great Carnitas Shortage of 2015 as an example), it does offer a fresh mindset to optimally implement enhanced organizational processes across supply chains. With sustainability, the likelihood of preempting supplier issues is greatly increased – and preparing for inefficiencies or doomsday scenarios is exponentially more efficient.
As more and more emphasis is placed on sustainability by governments around the world, 2016 may be the perfect year to decide if sustainability is right for you.