See also Sustainable Procurement.
Supply chain sustainability is a business issue that affects an organization's supply chain or logistics network in terms of environmental, risk, and waste costs. There is a growing need to integrate eco-friendly options into supply chain management. Sustainability in the supply chain is becoming increasingly visible among high-level executives as being critical to profitability and has replaced monetary costs, values, and speed as the dominant topic of discussion among purchasing and supply professionals. A sustainable supply chain captures the opportunity of creating and offering a significant competitive advantage value for initial users and process innovators.
Video Supply chain sustainability
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Supply chain is an important link that connects organizational input with its output. Traditional challenges include lowering costs, ensuring timely delivery, and reducing transport times to allow for a better reaction to business challenges. However, the rising environmental costs of this network and increased consumer pressure for environmentally friendly products have led many organizations to see the sustainability of the supply chain as a new measure of profitable logistics management. This shift is reflected by the understanding that sustainable supply chains often mean a profitable supply chain.
Many companies are limited to measuring the sustainability of their own business operations and can not extend this evaluation to their suppliers and customers. This makes determining their actual environmental costs very challenging and reducing their ability to dispose of waste from the supply chain. Yet much progress has been made in defining supply chain sustainability and benchmarking tools now available that allow sustainability action plans to be developed and implemented.
One of the key requirements of a successful sustainable supply chain is collaboration. Cooperation practices - such as distribution distribution to reduce waste by ensuring that half-empty vehicles are not shipped out and shipping to the same address are on the same truck - are not widespread as many companies are afraid of losing control ads by working with others. Investments in alternative modes of transportation - such as the use of canals and airships - can play an important role in helping companies reduce the cost and environmental impact of their shipments. The collaboration platform emerges out of fear of losing commercial control and competitive advantage by working with other companies.
Maps Supply chain sustainability
Three Levels of Sustainability
In 2008, The Future Laboratory produced a ranking system for various levels of sustainability achieved by the organization. This is called Three Levels of Sustainability :
Level 1: Get the basics right
This is the basic level and is the stage where the majority of organizations are located. Companies use simple steps like replacing lights and PCs turned off when left empty, recycled paper, and using greener travel forms with the goal of reducing the carbon footprint of everyday life. Some companies also use self-service technology such as centralized procurement and teleconferencing.
Level 2: Learn continuous thinking
This is the second level, where companies begin to recognize the need to instill sustainability in supply chain operations. Companies tend to achieve this level when they assess its impact across local operations. In terms of supply chains, this can involve supplier management, product design, manufacturing rationalization, and distribution optimization.
Level 3: Science of sustainability
The third level of supply chain sustainability uses audits and benchmarks to provide a framework for governing sustainable supply chain operations. This provides clarity around the environmental impact of adjusting the agility of the supply chain, flexibility, and cost in the supply chain. Moving towards this level means being driven by the current climate (where firms recognize cost savings through green operations as something significant) and encourage new rules and standards at industry and government levels.
Sustainability Implementation
Companies that want to implement sustainable strategies in their supply chain should also look upstream. To elaborate, if a company can choose between different suppliers, it can for example use its purchasing power to get its suppliers according to green supply chain standards. In managing suppliers, companies should measure that input from suppliers is of high quality, and water and energy use is minimized which causes less pollution, defects and overproduction. They should also audit their supplier base and ensure that they improve supply chain metrics
Software
As supply chain sustainability becomes a more important business issue, the need for reliable and robust data from suppliers is increasing. While some existing business systems may collect some sustainability data, most large companies will look to specific software providers for more specific sustainability functions.
References
Source of the article : Wikipedia
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