There is a growing demand across all industries to make supply chains more sustainable but doing so is a lot easier said than done and can often come at great costs. Stakeholders, investors, governments and even customers are now demanding more than ever that businesses are as environmentally friendly as possible and having a sustainable supply chain is a huge step towards reducing the impact a business has on the environment.
What is a sustainable supply chain?
When people refer to having a sustainable supply chain, they are normally refer to an organisation that consider the environmental and human impact of their products’ journey through the supply chain, from raw materials sourcing to production, storage, delivery and every transportation link in between. Areas to look at are energy usage, water consumption and waste production while having a positive impact on the people and communities in and around their operations
What are the benefits of a sustainable supply chain?
The backing for sustainable supply chains is growing, more evidence is coming out all the time about the benefits which include reduced costs after start up, conserving resources, optimising processes, uncovering product innovations, increased productivity and promoted corporate values.
In most cases an organisations supply chain is the biggest driver in their environmental footprint. Supply chains often involve energy-intensive production and transportation as goods are made and moved around. This means that organisations can make the biggest difference in their environmental output by making changes to their supply chain rather than other business operations.
It might win you more business. Lots of clients are now looking at the sustainability of the businesses they are working with as they are demanding higher standards of environmental management.
Use accreditations to support your business.
Obtaining an Internationally recognised standards, such as ISO 14001 can provide clients with evidence of your commitment to reducing your environmental footprint. ISO 14001 is a management system that helps you identify gaps in your business where you could make green efficiency savings and is often a requirement in business tenders.
Depending on the size of your business, you may not be required to have an ISO. There are however more affordable options that are better suited to smaller contractors. SMAS Worksafe are a registered member with SSIP, which is a health & safety accreditation, but we are also able to review environmental documentation you might have. Find out more about our packages and how they could help your business with showing off your compliance.
What challenges do organisations face?
There are plenty of hurdles in making a sustainable supply chain. Firstly, supply chains can often be very complex and involve people and organisations in different areas of a country or even overseas. This makes it incredibly difficult to pass messages and training onto all areas of a supply chain and make sure that everyone involved is doing their bit to improve sustainability.
Secondly is the cost, changing process and materials is often costly for businesses and the more environmentally friendly materials and process often come at a premium cost. Setting up new pipelines, sourcing new materials, setting up training etc is likely to cause significant upfront costs to a business however these processes may end up saving you money in the long term. But it’s hard for businesses to be certain that the upfront cost is an investment worth making.
In a 2018, a report from Economist Intelligence Unit and LLamasoft found that 38% of companies felt higher costs make it harder to adopt sustainable supply chains. Other options that were causing difficulty were monitoring complex supply chains (29%), organisational structure (24%) while lack of customer interest (20%) and lack of expertise (18%) were other factors behind not moving towards a more sustainable supply chain.