Supply chain sustainability includes best practices and technologies that take into account the environmental, social and legal aspects of a supply chain’s components as well as their economic factors. Achieving this goal necessitates the involvement of the entire supply chain. In order to meet the needs of customers and markets, manufacturers need up-to-date and accurate information about their suppliers’ materials and components.
A study by iPoint BiS, based on a survey of 250 U.S. and U.K. supply chain decision-makers in enterprise retail industries highlights that 98% of firms have some level of commitment towards supply chain sustainability, with 45% confirming that they are ‘very committed.’ In fact, almost a third (30%) of businesses involved in the study have a full-time employee dedicated to working on supply chain sustainability.
New Technologies & Supply Chain Sustainability
Previously, supply chain was mostly about logistics and keeping track when and where goods were moving. The changing face of supply chain and digitization has led to more visibility and analytics tools which has provided companies with the ability to gather data about how well each element in the supply chain demonstrates corporate social responsibility. Therefore, this transparency has led to responsible sourcing and encouraged supply chain partners to develop and share best practices for green operations and logistics.
New technologies have positively impacted the way a supply chain functions. For instance: a report from Inmarsat, the UK provider of mobile satellite communications, says supply chain stakeholders can reduce their environmental impact by adopting Industrial Internet of Things (IIoT) technology. Besides, the research says 46 % of respondents are using IoT solutions to improve resource efficiency and monitor water, soil and air quality while 67 % say they are achieving environmental sustainability improvements.
Major technology providers like IBM and Microsoft are investing in infrastructures to support blockchain; hence making it easier for a number of applications to move in this direction. Functioning as a single source of truth, blockchain can change the way business transactions take place. Such visibility will help ensure efficient transactions, while promoting food safety, efficient recalls, the elimination of counterfeits, and the assurance of ethical trading partners.
Let’s take a deeper dive into how technology can help you create sustainable change in your supply chain:
Identifying risky suppliers
Risk management in supply chains is one of the most important elements. Not managing this part effectively can result in serious consequences. For instance: the deadliest garment-factory accident in history, the collapse of the Rana Plaza building in Bangladesh, which killed over 1,100 people, was the result of poor working conditions.
How could technology help manage risks of this kind? This can be done by automating the risk management process, supplier self-assessments and code of conduct surveys. For example, start by reducing the manual administration required. With the use of a supply chain information management system, suppliers can be automatically screened for risks based on their country of operation, products, existing audits, and using pre-existing data.
Measuring and anticipating your carbon footprint
Shifting to a low carbon economy means reducing carbon emissions not only from your direct operations, but that of your supply chain too. You can start by monitoring scope 3 emissions, i.e. from the goods you purchase. There are software tools which can help you determine the carbon footprint of each supplier and calculate your carbon emissions per pound spent. In addition to that, you can also use software to anticipate what the carbon footprint of future purchases might be, and make informed decisions.
Develop training and capacity building programs
This is one of the most important steps needed to improve sustainability and drive behavioral changes throughout your supply chain. Nowadays, many external resources are available to support these efforts and some are tailored to specific sector needs.
An effective way to transfer knowledge across the supply chain is through an innovative training and development program in the form of eLearning solutions, which will equip employees with the required skills and knowledge to be successful. For instance: Supply chain Academy provides scenario-based training where employees have the opportunity to experience real job situations and active put those skills and knowledge into practice in their daily tasks.
Another form of training implies showcasing the success stories of selected suppliers, companies not only recognize their efforts but also demonstrate the practical benefits of sustainability initiatives to others in the supply chain. For example, HP has established supplier- and peer educator-run programs that have provided training to a large number of workers. Since the start of their capacity building program in 2006, HP has carried out 22 training programs in 12 countries on topics such as anti-discrimination, energy efficiency, labor rights and women’s health. Through programs conducted jointly with its first-tier suppliers, HP has already trained 155 second-tier suppliers, leveraging the investment and knowledge-sharing efforts dedicated to Tier 1 supplier capacity building.
The goal of supply chain sustainability is to create, protect, and grow long-term environmental, social and economic value for all stakeholders involved in bringing products and services to the market. New technologies are now making things easier in the form of new software and applications which are meant to ease numerous tasks and at the same time encourage supply chain sustainability. Innovative training and development programs using modern tools for learning represent a great way to educate employees about supply chain sustainability and hence encourage them to work towards this objective.