Sourcing and transporting goods can be the most overlooked—and inefficient—parts of how a business is structured. Here's how to examine and improve the environmental, economic, and social impact of your supply chain.
Incorporating sustainability into any company's operations is a hefty issue. But it's also an increasingly popular shift to make.
"It's an increasing liability to not do it," says Summer Rayne Oakes, co-founder and CEO of Source4Style, the online fabric marketplace, which is based in New York City. "There are a lot of companies out there, that understand that they won't be leaders within the field but they don't want to be laggers either."
Today's global marketplace is forcing many companies to reevaluate, reconstruct, and even collaborate their efforts just to keep up with demands of the industry. While many leading supply chains have already dedicated years of research and figures to develop data, initiatives and solutions to the movement that seems to be steering the industry, some are still trying to decide why they should.
"The best way to understand the imperativeness of sustainability is to consider the alternative," says Paul Anastas, assistant administrator for Environmental Protection Agency's Office of Research and Development. "The opposite of sustainability is being unsustainable, vulnerable. Too often companies have fallen, or been greatly damaged, because of events that have taken place in other parts of their supply chain, not necessarily things in their traditional sphere of control. These events have run the range of environmental (products or materials tainted with toxic chemicals), economic (cost spikes of a feedstock), or social (poor or illegal labor practices by a supplier). Without designing sustainability into the supply chain of the company, the risk of significant adverse impact is high."
IBM,based in Armonk, New York, has one of the country's top supply chains, conducts a study every year to address just this matter.
"We're looking to uncover what's top of mind with executives around the world and how they're preparing their strategies as companies are forced with all of the continued challenges of globalization," says Karen Butner, the global supply chain management leader for the IBM Institute for Business Value.
For the majority of large top supply chains, the question is not whether there's a shortage of sustainability efforts and programs, but what are the more efficient ways to successfully execute those initiatives. Cutting out travel distance of goods or eliminating a middle-man might make the supply chain more cost-efficient for the business, and also reduces it footprint from shipping. However, other companies and smaller supply chains that don't have the financial means to make such an aggressive push towards sustainability can still make gradual steps to take to be more socially, economically, and environmentally responsible.
Building a sustainable company is a task that must be taken on from all sides. The collective and collaborative efforts of the supply chain industry, with the support from the government, is crucial. Combining the innovative alternatives from chains taking a grassroots approach with the advanced research collected by leaders in the field can help you better understand what you can do to improve your company.
Oakes' company, Source4Style, was hatched from her deeply rooted passion for the preservation of nature. Couple that with the stigma of excessive waste, pollution, and human right injustices that the design industry has been pegged with, and you've got a recipe for a unique business.
"Looking at design for sustainability development is something that I'm really passionate about," Oakes says. "[Source4Style] is essentially a business-to-business online marketplace that connects designers and brands to more sustainable suppliers across the globe."
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Building Sustainability Into Your Supply Chain: Start Small
Decreasing your company's global footprint won't happen overnight—so don't fret if your company doesn't show great improvement the next day.
"When you take on sustainability, it encompasses so many different issues," Oakes says. So she suggests tackling the smaller issues first. "Some of the low-hanging fruits for a lot companies has always been transportation and sourcing efficiency. If you're able to actually manage that, you're able to manage sustainability in a more aggressive way within the company itself."
The way to identify what your smaller issues might be is to take an inventory of everything that you produce. From product design to costs to recycling, in most cases there's always room for your company to be quicker, cleaner, and better.
"Step back and look at your overall business strategy," Butner says.
Really holding a microscope to your company's infrastructure will force you to identify and address some nuance problems that perhaps you've been too busy to correct. It's common for companies to hire an outside consulting company to do this task for them, because it's easier for an outsider to take a critical eye to your business than you and pinpoint problem areas.
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Building Sustainability Into Your Supply Chain: Pick Your Pony
Once you've determined which parts of your business needs the most attention, Butner suggests prioritizing which one you'll tackle first.
"Say, 'We are really going to focus our attention on these two or three things,'" she says.
Even if this step seems challenging, there are places to find help.
"The EPA has state-of-the-art analytical tools that are useful in integrating sustainability into corporate operations," Anastas says. "In addition, there is now a growing industry of technical and strategy-based companies devoted to helping businesses, large and small, adopt sustainability into their business operations."
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Building Sustainability Into Your Supply Chain: Create a Green Team
All the ideas in the world won't mean a thing without someone there to implement them. Moreover, when you've reached this step, you're now in the same boat as many leading supply chains.
"Identify your employees who want to take leadership roles in different sections within the company," Oakes says. "You have to have your employees as your stakeholders. [They] are the ones who are going to drive this and keep up the momentum and energy."
This is the perfect opportunity for you to see which of your employees are ready to take on a more prominent position within the company.
But be careful! Make sure that you're green team is comprised from varying departments of the company, so as not to leave any department short-staffed.
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