Traditional supply chain centres around the need for speed, cost, and reliability of operations while sustainable supply chain focuses on supporting environmental and societal values. The environmental criteria include issues like environmental degradation, deforestation, greenhouse gas emissions, pollution, and water security. The social criteria include issues like working conditions, forced labour, fair labour practices, and health and safety.
Supply chain sustainability refers to a company’s effort to consider the environmental and human impact of its products' journey throughout the entire supply chain cycle. This cycle starts from raw materials sourcing to production, storage, delivery, every transportation link in between, reverse logistics, and recycling. Supply chain courses online would be beneficial for working professionals to boost their careers with the latest supply chain management methodologies, practices, and analytics.
Why is Sustainability Crucial for a Supply Chain?
Research shows that the supply chain accounts for more than 90% of most consumer goods companies’ environmental impact. Supply chains often involve energy-intensive production and transportation as products are made and moved around the globe. Increasing awareness of consumers of the unethical practices that exist in many supply chains like child labour forced labour, and gender discrimination has driven the need for the implementation of a sustainable supply chain.
Another reason for the need for a sustainable supply chain is the climate change and global disruption occurring due to traditional supply chain management. The impacts of bad environmental practices not only affect the planet in the long term, but they have immediate impacts on people too. Pollution and noise can harm the health of people while deforestation and environmental degradation can reduce the ability of people to live in their original locations, and therefore force migration.
Many countries have also introduced legislation for supply chain sustainability compliance, thus pushing companies to adopt green practices. The need to build a sustainable world is not only the onus of companies but consumers too as this affects the next generation.
6 Benefits of a Robust and Sustainable Supply Chain
The growing transparency and visibility provided by digital supply chain technologies have made it possible for companies to implement, promote, and practice green supply chains and sustainable logistics. A sustainable supply chain is not only good for the planet but also helps to build positive brand awareness, competitiveness, and long-term profitability.
The benefits of a sustainable supply chain are:
Cost control
There is a significant decrease in supply chain operations costs as a direct result of digital transformation and investment in supply chain sustainability. Sustainable supply chain management also helps companies save money by reducing production costs, which leads to lower prices for consumers. The reduced cost of products can then be passed on to the consumer as a way of giving back while at the same time generating more revenue and profits.
When transferring to a sustainable supply chain model, might be expensive at the start, but it has proven to bring greater efficiency in the long term.
Reduced environmental impact
There is a common belief that reducing the environmental impact of a company comes at a great cost. In reality, it can lead to big savings. By reducing waste and increasing the efficiency of operations, one can see a positive impact in the reduction of operational costs. A sustainable supply chain helps to in minimizing pollution and protecting the environment through minimal wastage, reduced usage of natural resources, and proper disposal of waste materials. These initiatives help improve air quality, reduce greenhouse gases, and minimize surface runoff.
Building brand loyalty and reputation
Statistics showed consumers to be up to 88% more likely to be loyal to companies that demonstrate strong social and environmental responsibility. Consumer awareness and preference for sustainable businesses had been steadily increasing. A properly managed and supervised sustainable supply chain can help to avoid reputational damage and build brand loyalty.
Minimizing risk and vulnerability
A sustainable supply chain enables enforcement of supply chain transparency through which unscrupulous suppliers and manufacturers can be avoided and potential damage to the company’s reputation can be mitigated to a large extent. It can protect the business from unethical and environmentally irresponsible partners track and document all the labour, handling, and materials components from source to destination to minimize the risk.
Compliance
Governments around the world are mandating greater supply chain sustainability and these regulations cover many areas, including the traceability of raw material, disposal of products, usage of banned materials and procedures, etc. A sustainable supply chain enables companies to maintain better compliance with government requirements and thus avoid penalties or fines.
Increases Profits
Sustainable supply chain management can also help to increase profits as it decreases production costs. Productivity improvement is achieved due to the usage of fewer resources and less energy consumption. Companies that run strong and efficient supply chains tend to generate more revenue and higher profits.
How to Implement a Sustainable Supply Chain
The Supply chain management online course would help employees gain knowledge of current trends and skills in the areas of operations and sustainable supply chain management.
To implement a sustainable supply chain few steps that can be taken are:
Conduct detailed supply chain mapping
Engage with suppliers
Set goals and define metrics
Leverage technology to identify problems
Invest in educating employees
Execute, review, and adjust
Become an Expert in Supply Chain Operations
To be an expert in supply chain operations, one needs to have a strong knowledge of technology to improve operational efficiency and decision-making across the supply chain. A diploma in supply chain management would enable professionals to make data-driven decisions at strategic, operational, and tactical levels. There is a shortage of professionals in this field and the right certification will make a big difference.
