Steps to Achieving Supply Chain Sustainability
Steps to Achieving Supply Chain Sustainability
Many people hear the word sustainability and think about the environment and earth’s natural resources.
However, sustainability in the supply chain is much more than the environmental aspect. Sustainability also includes social and economic responsibility. Economic sustainability focuses not just on a company’s profits and losses but also considers the future of a company. Social sustainability is about people. Respect for all three of these pieces—environment, people and profit—are intertwined and a necessary for a successful supply chain.
Each of these areas are wide and vast. There is no perfect sustainability program for all companies to follow. Each initiative considered to be included in a program will lead to many other ideas of what else to include.
For example, if a company focuses on making all packaging for outgoing shipments recyclable, should they take steps to reduce or eliminate the amount of non-recyclable packaging shipped in from suppliers? It all comes down to what your company wants to focus on changing and improving. A company that offers cloud-based web services would not have the same initiatives as a company that produces food for public consumption. Each organization must decide which areas to focus upon, how they would like to focus upon those areas, who will be responsible for each initiative and how they will measure their success in meeting their goals.
The first step in any sustainability program is the involvement of every employee in every position. It must become part of the company culture and mission. Communication, input, training and awareness of all staff at all levels are essential for a sustainability program to be successful. In some companies, there are rewards for employees for helping meet the sustainability goals. For example, a company may pay a bonus to employees for meeting a goal of no accidents with company vehicles for one full year. All employees involved in meeting the goal not only need to know the goal and the reward, but how they can help meet it. Input from these same employees may find additional training on accident avoidance or defensive driving may help meet the goal. If the program is not embraced and supported at all levels of an organization the goals will not be met.
The next step is to decide who will be responsible to create, set and measure the goals. In some companies, there may be a sustainability officer or director of sustainability. Other companies may decide that several employees from multiple departments should make up a sustainability committee. There is no right or wrong way to decide who will create, set and measure goals. Each company must decide what will work best for their organization.
The goals set in a sustainability program may need to include provisions for outside sources such as vendors, customers or the community. For many years in the apparel industry there was -and arguably still is - an issue with sweatshop labor. While a company said employees were treated well, the same company was unaware how vendors handled outsourced work. The company may have had a policy against such labor practices, but did not ensure the vendors followed the same policies. The results were devastating and the negative publicity that surrounded the findings caused damage not only to the people involved, but also affected the financial sustainability of all the companies involved.
Because financial sustainability is truly to focus on the future, companies need to consider products and services of the future.
In the late 80’s and early 90’s, the pager was the communication technology of the day. Some companies that offered pager-only products and services and failed to focus on the future were soon bankrupt when cell phones started becoming more mainstream. Companies need to consider the possibility of a product or service becoming obsolete. Plans on how would the company adjust or find a new revenue stream need to be included.
When setting goals, they must be measurable and attainable. A company cannot state they will reduce paper usage by 70% without knowing how that goal will be attained. The amount of paper being used currently must be known. Specific action plans must be outlined on how to reach the goal. Finally, having a method of measurement in place to track the reduction in paper usage is needed. If the goal is not met then the action plan must be reviewed and adjusted where necessary or the goal may need to be adjusted.
Consumers are no longer focused just on the price, safety and availability of a product. Consumers are also considering a company’s environmental initiatives and business practices. Potential employees are looking at more than the financial sustainability of a company or the benefits package. Company policies, diversity, work/home life balance, and environmental practices, are just a few of the areas potential employees are reviewing before accepting a position.
Although there is no perfect sustainability program for every company to follow, they are necessary for the future success of all companies.