0000001433 00000 n Once your organization implements an audit program, be prepared to act on the findings by developing and executing corrective action plans by clearly communicating the results and your expectations to suppliers, developing a capacity-building program and, if necessary, terminating suppliers if non-compliance persists. Stakeholder pressure from investors, shareholders, customers and nonprofits to push sustainability into the supply chain has significantly increased in recent years, with a record number of shareholder resolutions on supply chains issued during the past two proxy seasons. 2. Building a more sustainable supply chain requires a long-term plan (think years or even decades) based on strategic investments, a culture of innovation and a true vision for a more sustainable future. Once you know who your target suppliers are and have set compliance standards, collecting data from suppliers through a simple benchmarking questionnaire or self-assessment will provide you an understanding of your starting point. To meet these expectations, companies must enact significant changes that ensure environmental stewardship, decreased damage, and sustainable sourcing, manufacturing and product distribution. A sustainable supply chain must avoid compromising both the environment and the business itself. This is easier said than done, though. 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. As a founding member of the Apparel Impact Institute (Aii), Target Corporation stands out as one of the leading brands committed to sustainability in the apparel industry. Common among them is the use of technology such as AI and blockchain-based technologies which may help supply chains become more resilient. These collaborations help prevent audit fatigue, training redundancy and mountains of paperwork for suppliers working to meet similar requirements from their customers. mRmu�" ��86Ql;�֘������������٣��{�6C��Ej��okt7�n[�C������#j�ȣ�Bs�=��69��6����AW�Hm��(�Z8V‰{��7�RAr���&W>� ��.���"v�T� 5᤮�ūk���g�Q=�^�����Lf�Rչ[>e�lV&�s�c���v�Wnp>���m?ػ��Ԝr/uK��}�x���6�X�I��N�YL"���*qa[J\��q{�N��˦��(�>� �[�zԂڢ��\��h�4��]���ī�T�+#��g_��6�s�%F���r� W_�I��PAPz?n@x�Ps�|��˅b��iͭ��M�����%�k��3��]"3�}��2�ZY�`���,��U٧�ؤ����D[�2z:)&HNu�����Z0�X�CC���l��^�:ü#�i�)�3�ƭ@6�ZA��;�91����^��w�����oUZt��'�4�}�&/��!��c���jg+�M���֠jѭ�[��Z��׼�sg�rff©bm`'�AT�&��1��Sc$#.�����Yȼ� Where this is not possible, incentives — greater access to your value chain, such as access to customers or clients — also can be effective. Creating a sustainable supply chain can actually decrease supply chain costs, as a reduction in truck and air freight in favor of intermodal rail and ocean will result in substantial cost savings for your firm. There is an alarming rate of more than 90 percent of the damage caused to the environment by consumer-packaged goods (CPG) producers. •    Integrate supply chain sustainability criteria into the procurement process Many organizations, such as retailers, major brands and the U.S. Federal Government, have started evaluating the performance of their suppliers through questionnaires and surveys. Jigsaw image by billdayone via Shutterstock. Look at your supply chain in stages and consider the environmental, social, … 0000007923 00000 n You can create a sustainable supply chain that allows you to maximize your profits by following several simple steps. According to a McKinsey report about sustainability, supply chain operations have a direct impact on the environment as they try to compete with a growing consumer base. November 13, 2020 Shelley Vinyard. Every journey begins for a reason. The UN Global Compact's 2013 Global Corporate Sustainability Report finds that companies are increasingly talking about supply chain sustainability and making solid progress on setting expectations for suppliers. 6 steps for a more sustainable supply chain. 4. 3. Increasingly, organizations incorporate all areas included in their code of conduct with special focus and weight in the self-assessments related to areas that are important to their business. While more companies expand their sustainability programs to include suppliers, they struggle with implementation. 1. Of course, the main obstacle to implementing these changes is the associated cost. Many companies recognize that complex supply chain challenges cannot be solved by individual efforts and that industrywide collaboration is required. Fifteen years ago, Walmart started on our journey to become a more sustainable company. In this section. How a More Sustainable Supply Chain Reduces Cost, Time, & Risk 1. indispensable part of a business’s sustainability program Unilever research has revealed that 21% of consumers would actively choose brands that made their sustainability credentials clearer on their packaging and in their marketing. Assess Your Supply Chain and Identify Sustainability Issues. We believe three approaches can help consumer companies make their supply chains more sustainable. However, a responsible supply chain is not necessarily sustainable. 0000004473 00000 n Building a More Sustainable Supply Chain 14 JULY 2020 The article below is from our BRIEFINGS newsletter of 14 July 2020 Consumer packaged food companies are changing the way they source raw ingredients to help reduce their environmental and social impact. ^��,�M (������+�[Z�/P�[�s^S���hr�`�2�À��`�/XR�E�$�E�f�Tc%�r�7C6�Ԝ�: Supply chains are always going to be complicated, especially when it comes to tracking expensive equipment like RIP. MIT’s hierarchical supply chain codification shows that operating legally, ethically, and/or responsibly does not equate to sustainable. The company reduced its footwear supply chain by 65 percent and is focused on forming strong, positive partnerships with its suppliers. Consulting activities are an important part of the company’s sales strategy. In short, operating a leaner, more sustainable supply chain in the 21 st Century not only benefits the environment, but can also be a boon to companies as they look to leverage new technologies and strategies to streamline existing supply practices. 0000006932 00000 n First, there are supply chains that operate within legal limits and comply with agreed-upon contractual requirements. “When you don’t have a vision you’re grasping in the dark,” said author and Kinexions '20 keynote speaker Simon Sinek. 0000022497 00000 n Research shows the business case for supply chain sustainability is growing. These strategies are hierarchical. Source: MIT Sloan Management Review. Chemical companies have formed a joint initiative called Together for Sustainability (TfS), with the mission of developing and implementing a global supplier engagement program that assesses and improves sustainability sourcing practices. 0000014331 00000 n 0000001383 00000 n A sustainable supply chain is about far more than the environment, though that’s where consumers might focus their attention. They expect organizations to meet a certain set of ethical standards, and supply chains aren’t exempt from scrutiny. If you have a more mature supplier sustainability program, your company can do even more: •    Develop and/or deploy robust tracking tools, including software solutions, to monitor supplier performance and improvement over time Partnership creates a more sustainable avocado supply chain November 12, 2020 A new partnership between Index Fresh and Apeel will create even more happy endings for avocados by preserving freshness for consumers, creating more consistent quality and reducing food waste in the global supply chain along the way. For example, HP has established supplier- and peer educator-run programs that have provided training to a large number of workers. Many resources and tools have been created to assist companies with the development of a supplier code of conduct. By 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. 5 Strategies for a More Sustainable Supply Chain 1. They require first-tier suppliers to set their own long-term sustainability goals. 0000007363 00000 n Each supply chain is unique, and Cargill leverages its size, expertise and supply chain capabilities in a variety of ways to create a more sustainable, food-secure future. wmO|%4��V~l6W�B�B�DhvE�ќ0F����Lқ� 6��"��ܩ� J(�*4l)t��H�f��$��>�(BM�J(/����ri�:V䄪Gi�K��n�ݗ����~Hg=_hho���ݝ�(���0C�O1Ҳ���Ӳ�^�ZSL���K6:���>a��.�Y����%���5;Q��~�Ӷ�N�7�"�W��z�]*��� �C rb�1%����!g��gf5�w��ۮ�o�j�. The baseline assessments form the starting point for future programs to improve supply chain sustainability and help assess where the greatest need for improvement exists. The analysis suggests that the practices that lead to a more sustainable supply chain are equal parts best practices in traditional supply chain management and new behaviors, some of which run counter to existing accepted “best” practice. For example, Pacific Gas and Electric (PG&E) uses response from the Electric Utility Industry Sustainable Supply Chain Alliance survey to gauge performance of its top tier suppliers on important aspects of environmental performance, including greenhouse gas emissions, energy and water usage, and waste generation. ��K_��N��]� 4'��-�F\�%��� RP���(������gH�h���g��h�p-P��Ah�+�g`T���F �Ȁψ����c�c���C�o�m.��d�U�i��� ��r@��I��ÁM���At�C��� �d�-� b����$0\���,�w ��A&>n�C0���?�+���I rf�HB�� �ba�CP�v� ��j� endstream endobj 165 0 obj <>>> endobj 166 0 obj <> endobj 167 0 obj >/PageWidthList<0 595.276>>>>>>/Resources<>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/Tabs/W/Thumb 154 0 R/TrimBox[0.0 0.0 595.276 841.89]/Type/Page>> endobj 168 0 obj <> endobj 169 0 obj [/ICCBased 182 0 R] endobj 170 0 obj <>stream They include lower-tier suppliers in the overall sustainability strategy. 164 23 0000018015 00000 n CH2M HILL's direct procurement organization has begun incorporating sustainability into the design, procurement and construction of projects by promoting the selection of suppliers and subcontractors that value sustainability. H�d�9�d7��:Ż@�Z(J�� |��� � �����"��+����R7�|�+_}�T_�J������_׿��~�3_�_WN�ڒ�i�u�zb������*�lQ��01g�F�i���j�2H��\c u��?�м1����AĎ�n�M����e������J�S@������R�,P[����\ee`�j�D����`M��7�h�-�)2��w��s4���ں#�Y�/�`�DEǩ�ߑR�yA0�R�@�Qzb�3u�ʞ��kQ��L/&|>Vʽ� ؊���/�B��k�r�]�����Q2z;�3c� Sustainability is a confluence of social, ecological and economic environments. Suppliers are classified into four groups of environmental performance, with each incorporating specific key performance indicators (KPIs). However, in the long-run, a sustainable supply chain system pays off for companies. Our client work shows that more companies are aligning the content of their assessments with the GRI guidelines and CDP questionnaires. Challenges in Adopting Sustainable Practices. We seek to apply these commitments across all Schlumberger business activities and supply chain, including suppliers, contractors and labor agents. Also reducing packaging weight and complexity can reduce LTL charges and volume and weight will be slightly reduced. Communicating back to suppliers in a constructive way is critical for future engagement and provides encouragement for improvement. A new tool developed by the Global Environmental Management Initiative (GEMI) helps companies prioritize where in their organization's value chain they may have opportunities to improve supply chain sustainability, and then provides case studies of companies that have leveraged these opportunities. In our experience, one effective way to transfer knowledge across the supply chain is to leverage the best practices and case studies from top performing suppliers at annual vendor conferences, via online training modules and through capacity building campaigns. New Balance Athletic Shoe Inc. reduced the number of suppliers it does business with, in part based on performance against sustainability criteria. 0000000016 00000 n While slow-steaming container ships can be effective at reducing both emissions and expenses, organizations may find it difficult to achieve sustainability internationally — across many global suppliers — when cost drives many supply-related … 0000016077 00000 n • There is a strong business case for developing sustainable ways of working throughout a company and its supply chain: saving resources is a more … 0000002609 00000 n %PDF-1.7 %���� Some criteria that may be helpful for prioritizing suppliers include level of spending, importance to business continuity, and geography as a proxy for risk. The Zero Discharge of Hazardous Chemicals Programme (ZDHC), the Sustainable Apparel Coalition, the Outdoor Industry Association and the American Apparel and Footwear Association are a few examples of industry collaborations in the apparel and footwear sector. An early step is to inventory suppliers, identify the most significant environmental and social challenges they have, and prioritize efforts with suppliers. Some sectors, such as the electronics (Electronics Industry Citizenship Coalition Self-Assessment Questionnaire) and pharmaceutical (Pharmaceutical Supply Chain Initiative Self-Assessment Questionnaire) industries, have developed industrywide surveys to reduce the burden on suppliers of responding to multiple requests for information that varies in content and format. They task a point person on staff with extending the firm’s sustainability program to first- and lower-tier suppliers. 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