Supply chain sustainability has dominated much of the news cycle these past few weeks. Take, for example, the following commitments from some of the worlds’ biggest brands:
- Coca-Cola committed to ambitious sustainability goals promising to increase renewable energy, reduce packaging and double the number of employees taking part in related volunteering initiatives.
- General Motors has vowed to implement a better supply chain management process across all tiers to prevent child labor issues in its battery supply chain.
- As part of the European Union’s (EU) Corporate Social Responsibility initiative, it established a new directive to strengthen transparency and accountability of approximately 6,000 companies. These new measures require companies to support smart, sustainable and inclusive growth in pursuit of Europe’s 2020 objectives.
- The Marine Stewardship Council (MSC), the largest international non-profit focused on sustainability fishing and seafood practices, recently found sustainable fishing practices to be a key sales driver, and now has commitments from more than 50 percent of their fisheries to research new ways for improved operations.
Procurement plays a critical role in helping organizations implement ethical supply chain practices and reach sustainability goals. When implemented correctly, the benefits of sustainable procurement extend well beyond CSR. It helps mitigate supply risk, improve a company’s brand reputation and directly impacts the bottom line.
Success stems from working with suppliers across all tiers to uncover and maintain sustainable supply chain practices. To help ensure transparency and keep up with the latest sustainability initiatives, check out these tips:
- Clearly articulate company values and mission: Companies need to ensure all employees understand its corporate values and ethics as well as how their behavior aligns to those mandates. As such, the same holds true for the supply base. This can be accomplished by taking a more supplier-centric approach to procurement, where procurement shares goals, vision and priorities in a collaborative and transparent fashion. Having all suppliers agree to a written code of conduct, specifically as it relates to sustainability goals, is also a good practice. Organizational goals are met when team members are aligned on core values. Procurement – given its unique role working in an integrated fashion across the organization – is in the best position to drive this alignment forward.
- Make sustainability a qualifying factor of supplier relationships: Price, quality and service levels are all important factors to consider when choosing a supplier, but sustainability needs be factored into this decision to safeguard longevity. Companies should ensure potential suppliers have the required legal, financial and environmental documentation in place to deliver products and services in a specific category. When procurement teams consider sustainability practices from the outset of a relationship, it sets the stage for future dealings and continual supplier improvement and value.
- Enhance supply chain visibility with technology: Using tools that empower suppliers by putting them at the center of the procurement landscape – and make it easy for procurement to gather insight into suppliers’ ethics, labor practices, work conditions and performance – goes a long way. This holistic view of performance and value gives procurement the ability to anticipate potential sustainability issues before they occur and encourages suppliers to implement and improve their practices over time.
The BravoAdvantage suite can support supply chain sustainability and transparency, but the success is ultimately up to the buying organization.