Distribution logistics for sustainable supply chains

Making a sustainable supply chain

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?

Sustainable construction / Wind Turbine Farm

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?

Biofuel drums / sustainable supply chain

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.

Manager and supervisor taking inventory in warehouse

Using Accreditation to Reduce Supply Chain Risks

“Supply chains continue to be one of the most important levers for business to create a positive impact in the world, with an estimated 80% of global trade passing through them annually.” – UN Global Compact

With so many businesses having to utilise supply chains, making sure the process is as smooth and unproblematic as possible is going to save your business time and money.

But what are some of the best practices to make sure your supply chain is aligned and remains compliant?

Accreditation:

It might be obvious, but accreditations are an easy way for any business to make sure that their supply chain is following minimum guidelines that you would want to ask of them. It’s best practice to investigate member schemes of an accreditation organisation to make sure that they are covering all bases you wish your supply chain to conform to.

Knowing your supply chain is compliant will give you peace of mind and greatly reduce the risks of something going wrong, which can lead to materials or contractors having to be replaced and therefore delaying the work you need to be completed, having a financial impact on your business.

Accreditations are good for all supply chains, but generally have a greater benefit when the supply chain is long and has lots of cross overs. The more businesses involved the higher the chance of something going wrong and therefore increases the importance of having an accreditation or management system in place

Remaining compliant

Regulations around areas such as health & safety, environmental management and quality management are forever changing and therefore choosing an accreditation that is constantly evolving to meet the demands or surpass them to avoid having to change their policies are a great solution for keeping your supply chain future proof and the relationships you already have stable.

A SMAS Worksafe accreditation is built on making sure that businesses are always able to hit the latest demands and regulations as well as preparing for any changes that might be put in place in the short term. This means you can have complete confidence in both your suppliers, who are willing to obtain this accreditation and therefore showing their stance on compliance but also confidence that you will be able to keep your current supply chain despite changes in regulations, as those who are accredited by us will be covered and won’t need to seek further accreditations in order to meet the demands placed on them.

Retaining fluid Procurement and services

Procurement is often a very time-consuming part of building a supply chain and the last thing you want is a disagreement on the level of compliance needed.

Standardising your compliance requirements through an SSIP accreditation as well as additional PAS 91 areas such as Environmental & Quality Management Processes, will not only speed up the process and eliminate you having to check or research businesses compliance, but it will also mean that all parts of the supply chain are required to meet one single assessment and you don’t have to worry about different accreditations for different areas of your supply chain. This is obviously more beneficial for those whose supply chains are longer or more complex.

Keeping your supply chain compliant through an accreditation not only saves you time in the initial set up of that particular agreement but will also help to reduce or mitigate issues occurring in the future. All kinds of issues could cause an area of your supply chain to be unable to fulfil the demands you’re asking of them which could lead to things such as the inability to supply materials or workers.

An accreditation that encompasses risk management, such as the SMAS Common SSIP Assessment, is presented to suppliers that have demonstrated their ability to manage and mitigate risk. You also have the freedom to demand other areas of compliance from your supply chain, such as Environmental and Quality Management.  Meeting your requirements shows that contractors are prepared to meet challenges and maintain operations in the face of adversity, with their risk appropriately managed, you have greater peace of mind that your supply chain structure is capable of weathering unforeseen problems.

How we can help

SMAS Worksafe are one of the UK’s leading SSIP Accreditation schemes used by thousands of contractors throughout the UK. We use a simple tiered membership system that can include further areas of compliance beyond SSIP such as Environmental and Quality Management checked off against IEMA and IRCA standards.

As a client of SMAS Worksafe, you choose the level of compliance you want your supply chain to achieve, this could be just SSIP, but it is also recommended that you include the environmental and quality management areas. Once you have chosen the requirements, we will work on making sure all your contractors have the correct SMAS package, so you don’t have to worry about there being issues with your supply chain. We will also send you monthly compliance reports so you’re able to see which of your contractors are coming to the end of their accreditation period or those who have expired so you know they are no longer meeting the standards you have set.

To learn more about our packages and how we can help you manage your supply chain visit our supply chain management page.