21 Feb 2024

Sustainable Supply Chain and Everything Related

A sustainable supply chain forms the backbone of modern-day operations as it streamlines ethical value chain practices to deliver products with zero carbon footprint.

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The best way to predict the future is to create it.

While the quote is credited to Abraham Lincoln and Peter Drucker, one can conclude that the ideology has indeed aged well. The supply chain industry is very well-versed in its impact on the environment. Take this fact for instance: global organizations Scope 3 emissions have accounted for over 70% of the total carbon footprint. By this measure alone, an understudy can find the flaws in the value chain framework adopted over the years. One can also argue that while technology did find its footing in bolstering the metrics of efficiency, performance, output, and revenue, sustainability found its calling on a slightly delayed timeline. But as they say, better late than never.

In this write-up, we are going to highlight why a sustainable supply chain is the need of the hour and how everything now is a chain reaction, with it being the nucleus of planning and execution. We’ll shed light on the key components, the best practices, the challenges, and how the titular action plan can be executed. But before we begin, let’s start with the basics first.

Table of Contents

What is a Sustainable Supply Chain?

We all know what the supply chain does. Starting from raw materials sourcing to delivering the finished products, a value chain process involves multiple stakeholders, applications, and calls from leadership whose ultimate goal is to meet the consumer demands and drive their revenue. In all, making a framework that is responsive, scalable, and, yes, profitable. A sustainable supply chain does all of that but by adding a layer of ethical and environmentally responsible practices too.

Why is it important to have a Sustainable Supply Chain?

To keep things light and simple, let’s set the context for the question above in the superhero realm. Let’s imagine our planet Earth fighting a battle against GHG emissions and slightly finding itself on the losing side of it. And at that moment, the quest for restoring balance lies solely on the superhero who everyone vouches to save the world just before it gets out of hand. In the realm of the value chain, sustainable operations are that key figure that restores parity for all the virtues it has. To help the cause, the stats do show that the sustainability methods are indeed making a difference.

Though legalization impact, new guidelines, and reformed government code for pro-environmental operations are non-negotiable terms for an organization to carry out their supply chain functioning, from a practical point of view, each process needs its time, considering enterprise nuances of working, the infrastructure they have, the skill level the workforce inherent, and of course, the finance that needs to be funneled in to make it work. To take in the bigger picture, consumer's new buying patterns favor more ethically sourced products whose manufacturing process till the delivery of products life cycle is not only environment conscious but also contributes to the betterment of our planet earth. For instance, a company that is more transparent in its supply chain sustainability statistics gets higher consumer retention rates compared to those who are slightly more abstained.

What are the key components of supply chain sustainability?

As and when there's ascendancy in how technology can translate both the meaning and the impact of sustainability, the components that are associated with sustainable supply chain operations widen, too. Let's look at the key elements that are part of the eco-friendly value chain.

A diagram of key components of supply chain sustainability
  1. Environmentally Friendly OperationThe first component involves sustainable operation from manufacturing to delivery and covers proper benchmarking of supply chain processes. This also includes green product design, production, raw material sourcing, logistics, and last-mile delivery; in short, complete product life cycle stages that are eco-conscious. These operations are more plausible owing to the inculcation of artificial intelligence and machine learning that keep an astute check on the operational parameters, potential risks, and usage of data to help aid the end-to-end sustainable value chain.
  2. Visible ProcessesEvery process needs to be completely transparent in terms of the actual stage of its working. Businesses have to share the working information of their processes to gauge whether the action plan or those who are accountable for it are indeed getting the desired result or not. This also helps in adapting the processes to maximum effect, thus building up reliability towards building sustainable supply chains. Not to mention, the facts always provide more focus on whether the whole framework is akin to the ethics that a company stands for, including meeting the standards laid down by the regulatory authorities.
  3. Waste Management A sustainable supply chain's core competence factor is how well-rounded the product life cycle is. This means apart from being very much relatable to the ecosystem during its production, it is also equally smooth in its transition from being a used product to being broken down and remade into a new offering for the market. The product's reusability goes beyond its original life cycle and offers more longevity owing to its renewable material usage.

What are the best practices for sustainable supply chain management?

Each strategy needs a fully functional action plan. But more importantly, these executions require a few pointers to bring out the best efficiency and maximum impact. Here are the best practices for supply chain sustainability.

A diagram of best practices in sustainable supply chain management
  1. TechnologyThe best leverage for any idea is how well it is complemented through the foundation of its technologies. An idea will see its fruition to its maximum potential on account of how relevant technology is. Both AI and machine learning have opened immense avenues for the people who are directly involved with a sustainable supply chain process, the data that is being processed, and the execution. The marquee technology has also made it easier for enterprises to easily streamline with the already existent framework, making the transition easy from traditional methods to new-age ones.
  2. CollaborationYes, you read that right. Every function involves people. And to judge the efficacy of a process, its success encapsulates how well the people or process's stakeholders have aligned themselves internally. Faster assignment of roles and keeping tabs with those accountable can become the recipe for success for any organization. This especially proves to be more fruitful in the face of uninvited disruptions when quick resolution can be attained through faster collaboration.
  3. Setting Consistent StandardsOnce a sustainable value chain model is adopted, it is essential for every key personnel or group in the system to adhere to the regulations that the management has finalized. Stakeholders, external and internal, have to comply with the rules and regulations that benefit the end objective of both the organization and the environment. This also facilitates the ESG guidelines that also need to be incorporated by an organization as a part of the comprehensive brand they aim to build.
  4. Market your SuccessThe world needs to know the excellent work that you have been doing. From customers to competitors, your operational trends in supply chain sustainability will surely bring the attention the subject deserves. A success story not only catalyzes the cause in the spotlight to the global stage but pushes the tech to even out the impact the carbon footprint has had on the planet. All the positive chain reactions add to the value of supply chain sustainability.

What are the challenges of supply chain sustainability?

There's a flip side to every coin. And the challenges are on the other end. Let's cover the key shortcomings when bringing the value chain world to the necessity of sustainability.

A diagram of a company's supply chain sustainability challenges
  1. Finance For all the plans finalized in the boardrooms, their execution is determined through the value signed on the cheques. The infrastructure requires a complete overhaul, which generally means getting away with the usual methods, applications, and even existent framework sometimes. Also, the company's scale is considered to measure how effectively it can incorporate its sustainable principles and subsequent operations.
  2. Workforce SkillsetA new way is a change for some, and sometimes, changes need a transition phase to achieve full potency. From a company point of view, the workforce, in some cases, needs an upgrade on their current skillset. Management needs to invest in the required upgradation program to help the people directly overseeing the value chain platform to get the most out of it.
  3. IntegrationYou bought new software, but it fails to be compatible with your enterprise's existing systems. It'll simply mean a bad investment. Before funneling a good chunk of cost into sustainable software, organizations need to vet whether the application will yield desirable objectives or not considering your scope of work.

How 3SC can help?

It's a fairly known fact and one that needs more adoption at a much rapid pace. With the supply chain forming a chunk of operations at a company, the sustainability framework is leading by example towards building a world that is as comprehensive for those who inhabit the planet today and will continue to in the coming time. In this global objective, 3SC, with its intuitive and intelligent value chain software, studies the client's sustainable objectives and comes up with a roadmap that not only aligns with a scalable and sustainable matrix but also keeps it scalable and adaptable.

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