The need for sustainability in supply chains is greater than ever—here’s how they can transition towards it in 5 critical steps.
Sustainability is a word that’s growing more prominent in the world of supply chains. And for good reason. Not only does it make environmental sense, but is also makes business sense. Whether it’s a result of customer demands or governmental regulations or minimized costs and waste, sustainable supply chains have a competitive advantage in the long run. Conversely, not incorporating sustainability into supply chains can be a considerable shortcoming for companies.
According to Mckinsey,
One condition that can slow a company’s growth is poor sustainability performance, as measured in environmental and social impact. To make and sell goods, consumer businesses need affordable, reliable supplies of energy and natural resources, as well as permission from consumers, investors, and regulators to do business.
As such, this week’s article by Morai Logistics lays out 5 integral steps for companies to adopt to help them move towards sustainability in their supply chains.
Plan
The first thing any company has to do when moving towards sustainability is to put a plan in place. This is where they should review every aspect of their supply chain, leaving no stone unturned. Through this review they can identify where their chain is weakest in terms of the sustainability of its operations. In turn, this will allow the companies’ leaders to strategize and create an overview of the changes that need to be made.
Keep Your Expectations in Check
As important as it is for companies to be ambitious with their transition to sustainable supply chains, they still need to be realistic. By setting goals that are unattainable, the whole endeavour can feel deflating and ultimately a failure. Rather, leaders should make sure to communicate to all along the supply chain that having a greener supply chain can take time. Furthermore, that some of the benefits of a sustainable supply chain can take some time to become evident. With that said, this is no reason to not hold any actor along the chain entirely responsible for maintaining sustainable practices.
Establish Key Performance Indicators (KPIs)
Like with any business undertaking, goal setting is critical. Companies need to gather data, reports, and other forms of feedback on sustainable supply chains so that they have hard numbers to compare themselves to. Through this feedback, supply chain managers can formulate metrics through which they can assess success and failure. It is only through these KPIs that they can know whether their sustainability effort is heading in the right direction.
Train and Educate
Whenever any kind of transition or evolution in business practices takes place, education and training has to follow. Thus, if a supply chain is going to successfully go green, it has to have training and education programs in place. Sustainable practices are going to be different. With that in mind, even the more seasoned professionals along supply chains may need assistance when making adjustments.
Evaluate
The final step for companies to have an optimal transition to sustainability is for them to make sure they are continually evaluating their results. Trial and error is part of any adjustment period. It’s up to supply chain managers to incorporate flexibility into their supply chain sustainability plans. This is so that they can make changes to their chains without being disruptive. Moreover, it’s through constant review that companies can establish best practices while discarding or adjusting the practices that don’t work.
