Five Ways Supply Chain Leadership Can Improve Sustainability

Guest post by Michael Koploy

Take a look at some of the largest companies in the world–Apple, Nike, Walmart, Toyota–and you’ll find some of the most sophisticated, complicated supply chains. Today, consumers and shareholders alike are taking a deeper look into these supply chains and asking for businesses to increase visibility and promote responsibility throughout their networks.

Supply chain leadership often lacks the vision and strategy to enact these initiatives successfully:

“One of the main difficulties might be linked to the fact that few organisations have the necessary vision, organisation and budget to risk certain costs…for uncertain benefits.”

Supply chain leaders have to ask themselves: Are we focusing enough on sustainability and corporate social responsibility (CSR)? The following five areas of focus are important for supply chain leadership to connect CSR and sustainability to improve margins, reduce costs, and lead to more responsible operations that show greater respect for our Earth and its citizens.

Sustainable Supply Chain Leadership

1. Improve Sustainability Measurement. An important task for supply chain leadership is to accurately connect sustainability project costs and the impact on operations, costs, and profits. Not only is it crucial to prove this to decision-makers, but it’s also beneficial for gaining greater insight into the supply chain and the business as a whole.
2. Ask Suppliers to Become More Sustainable. Monica Gelinas, sourcing expert and principal at GritWork LLC, believes that businesses should extend an “olive branch” to suppliers and work together to improve efficiency and sustainability. The result will be lower costs for the business and, thus, for the consumer, as well as more eco-friendly production.
3. Improve Sustainability at the Product Design Level. Improving sustainability at the product design level has a positive downstream impact on the entire supply chain — from production to transportation. For example, many cleaning product companies have moved to concentrated formula products, reducing production and transportation costs. In turn, these companies also have a sustainable initiative that their marketing team can build around.
4. Avoid Socially Irresponsible Suppliers. Nike came across this problem in the 1990s when child labor was found within its manufacturing plants. More recently, suppliers of the toy manufacturer Mattel were found to be shipping products with dangerous levels of lead paint. (The fallout cost the company $100 million in recalls.) Today, CSR is more than just a marketing ploy by brands — it’s a risk-management strategy.
5. Find Employees that will Drive Sustainability. While technology has improved the sophistication and execution capabilities of these businesses’ supply chains, effective and impactful sustainability requires leadership that can develop and drive sustainability throughout the business. “Companies need to figure out that it’s worth putting their ‘good people’ on these issues to realize eco-efficiency,” says  Diane Osgood, Ph.D, of Osgood Sustainability Consulting.

What other ways can businesses improve sustainability in their supply chains?

Michael Koploy is an ERP Analyst at SoftwareAdvice.com, an online companythat reviews transportation management systems. You can reach Koploy on Twitter at @SCMAdvice.