Why Sustainable Supply Chains?

Complex and intricate global supply chains can work efficiently at the best of times, but remain susceptible to many unknown vulnerabilities. Even before the COVID-19 pandemic, many events in recent years have temporarily disrupted production across geographies, sectors and firms. Such events expose the weaknesses and impact the long-term sustainability and security of supply chains, leading to financial losses for firms, and indeed in some instances through impacts on key supply chains; affect lives and livelihoods of vast populations. In terms of effective risk management, it is therefore very important to build a sustainability and resilience framework for key supply chains, which are integral to the economy.

Supply chain sustainability helps companies save money, strengthen business relationships, and benefit the environment - requires science-based targets and business-based metrics

Three elements of supply chain sustainability (Triple Bottom Line) - People—the social equity bottom line; Planet—the environmental bottom line; Profit—the economic bottom line

Social sustainability
  • Work with vendors who have fair labour practices
  • Meet health and safety regulations
  • Don’t pollute and cause problems for communities in which they operate
  • Diversify vendor base to help build a more equitable business
Environmental sustainability
  • How much waste are your suppliers and your delivery logistics generating?
  • Are vendors’ manufacturing operations polluting the environment or helping clean it up?
  • What are your supply chain’s water and energy usage rates, and what’s your overall carbon footprint?
  • Where possible, do you require suppliers to use recycled materials and packaging?
Financial sustainability
  • Technologies like EDI can help procurement teams go paperless, saving environment and lowering operational costs
  • AIDC and ERP platforms help make the procurement function more efficient and reduce waste in the supply chain
  • Implementing a Supply Chain Code of Conduct among vendors incorporating social and environmental elements improves working conditions across the supply chain, as well as helps reduce supply chain risk and improve brand image