The sustainable supply chain is top of the agenda for an increasing number of companies today, as pressure builds from consumers, regulators and investors. This pressure is only building with daily headlines on global crises driving demands for greater transparency from all stakeholders and retailers coming under ever greater scrutiny about ethical sourcing.
The consensus from consumer to CEO is that active efforts towards implementing sustainable practices throughout supply chains is an objective good. However, there is still a significant gap between the will and the way.
The gap between intention and action
Well-intentioned producers and retailers might want to progress from being end-stage transactors to become pioneers of sustainable practices who can verify the ethical origins of every component of the products they sell, but the obstacles to such a transition can make companies scale back or abandon their ambitions.
A key driver of success in establishing a sustainable supply chain is the extent of the internal expertise at the company.
When businesses take a closer look at their supply chains, they often find shortcomings in the levels of visibility and management throughout. Without the necessary experience of building or integrating sustainability into the supply chain, these companies often make unforced errors or spend valuable time reinventing the wheel at great expense.
Even with the best intentions, businesses continue to fall short of what is expected by stakeholders and even what they themselves have committed to achieve. A recent IBM study found that 61% of businesses wanted to pursue supply chain sustainability improvement. But one in five companies are not on track to meet their Scope 1 and 2 decarbonisation targets and nearly two thirds do not have a strategy to reduce upstream Scope 3 emissions, according to a recent Bain study.
In order to succeed, companies need a roadmap that can help them build resilient supply chains reinforced with robust validation and verification practices.
At the heart of this process is data. Knowing the scale at which a company’s supply chain is underperforming in terms of sustainability is the first step before tangible progress can be made.
Using data to bridge the gap
Supply chain management is a complicated process, with multiple categories, territories and stakeholders to satisfy. This is made even more complex when sustainability becomes a focus. By deploying technology and expert analysis, companies can identify the weak links in the chain and make modifications to align operations with strategy.
Complex supply chains firstly rely on data to operate efficiently.
Collected data offers companies a tangible means of understanding supply chains, providing dynamic insights into quality, merchant sourcing, fail rates, sustainability and more. Many companies have this data but face the additional challenge of being able to interpret and act on it appropriately.
Where knowledge gaps exist in supply chain management, at any stage or hierarchy, external expertise is often the best filler. New real-time transparency technologies allow companies to instantaneously rectify wastage and excessive carbon or water usage to get ahead of delays, losses or non-compliant utility expenditure. Partnering with external experts means you can action these insights immediately and effectively.
Procurement and sourcing
Sourcing practices are also evolving to meet the new environment with the advent of AI accelerating responses to global supply chain crises and raw material shortages. However, this new frontier for supply chain management can be difficult to understand and external expertise is often a cost-effective, and efficient means of being able to rapidly respond to a developing situation. External experts working with retailers to implement agile supply structures and to automate management and resolution functions can be a rapid and flexible solution
Equally, antiquated manual sustainability and quality reporting gives management teams a lack of visibility and understanding of their products. New technologies offer real-time quality visibility and reporting with global GPS tracking of products that can seamlessly integrated into business systems with APIs. These programs are fully customizable to client business, processes, KPIs and needs.
The sustainable supply chain is inevitable
Sustainable supply chains are the future. Many companies will face fines from regulators, as well as repurcussions from investors and consumers unless they make the transformation. A lack of internal expertise, fears of rising costs and supplier resistance create an atmosphere that isn’t conducive to positive change, but ultimately the failure to engage could prove far more costly.
Until companies have real-time visibility across their supply chain, transparency at every stage of the process, and access to the right expertise, transitioning to truly sustainable supply chains will remain a daunting task that deters many businesses from making enduring changes. But it doesn’t have to be this way.
Those who will thrive and prosper will be those who think ahead and actively pursue sustainable supply chain strategies for reasons driven by ethics, efficiency, foresight and profitability.
