The supply chain links the producers of a product to the purchasing customers. It acts like a giant sponge, absorbing the inputs of raw materials, energy, and water and converting them into final products for sale. As the demands for raw materials, energy, water, and time change, so does the system’s ability to meet these demands.
Here are five ways to make your supply chain more sustainable:
Establishing sustainability targets in the procurement process.
The involvement of supply chain professionals in the procurement process is inherently tied to sustainability. It has long been a fact that purchasing decisions are made with a view toward the long haul. This is usually done to protect the company’s brand and to ensure that the products are procured at the lowest possible cost.
Sustainability in the procurement process is a hot topic these days. These days with many companies (like greenstone, for example) advocating them through their products and services, you are probably familiar with the concept and have been doing your best to ensure that your supply chain provides you with the type of products you need in the most sustainable manner possible.
However, the complexity and diversity of today’s supply chains make this a challenge. Successful supply chain management depends on carefully managing supply chains, which can involve multiple types of procurement players and actors and multiple types of relationships.
Learn the supply chain risks and opportunities.
Supply chain risk is a term that refers to the possibility that a supply chain can be disrupted, damaged, or destroyed as a result of the movement of goods or services through the chain. These disruptions can be the result of natural or human-induced events. For example, in the aftermath of the 2004 Indian Ocean tsunami, many oil companies were forced to shut down their operations that were located near the epicenter of the earthquake. Such events can be devastating for any company and the economy of a particular country.
Control data to have informed decisions.
“Data is the life of the Supply Chain. It’s how you know where you are in the business cycle, how you manage the risks and rewards, how you adapt your business to changing trends and the market, how you find efficiencies and how you can respond to crises. It’s the heart of Operations.” Not only the average consumer wants to do their part to make the environment more sustainable, but now businesses are embracing the green economy and taking steps to help reduce their carbon footprint. Many are finding that sustainability can be a competitive edge and a source of new revenue opportunities. The key to sustainability is to develop a supply chain that is more efficient, improves customer satisfaction, and reduces risk.
Make use of software in data analysis and automate processes.
The supply chain is one of the largest fields for automation. Automation takes manual tasks out of the process and replaces them with a computer. Computerized systems are used to make calculations, increase productivity, and record and control the entire process. Automation is helping companies to become more efficient and profitable. The use of software automates your processes and significantly impacts logistics and supply chain management.
Baseline supplier performance regulation.
The industry is struggling to find sustainable supply chain solutions that are economically viable, environmentally friendly, and socially responsible. The industry must take a more holistic approach to manage its supply chains to avoid the negative consequences of poor system design and its wider implications of poor performance. Supply chain problems range from poor system design, poor communication, and waste to loss of origin.
Supply chain management is the basic business activity of managing the flow of goods from the point where they are produced to the final destination where they are consumed. It is a process that involves ensuring that the goods reach their destination safely and in the right quantity, with no loss or damage.
Supply chains are fragile systems that are vulnerable to shocks and disruptions, from natural disasters or terrorist acts to supplier restlessness or other problems like fraudulent behavior. Supply chains are often made up of many parts, each with its value and importance to the whole. (Some supply chains are even made up of a whole bunch of smaller chains!) When one part of the chain does not perform as planned, the whole chain can be impaired.