Improving efficiency and sustainability across the supply chain is a hot topic — one example of this is AkzoNobel’s announcement that it will measure and report on the four dimensions of capital, financial, natural, social and human, across its entire value chain — but what does delivering sustainability across supply chains look like?
In a Supply Management blog, Action Sustainability director Shaun McCarthy says it takes five ingredients to make the “whole enchilada” of supply chain sustainability.
The first ingredient, McCarthy says, is good procurement — incorporating sustainability requirements procurement practices. He says the forthcoming ISO 24000 will standardize these globally.
Compliance, and partnering with other businesses and nonprofits to ensure the supply chain is compliant with sustainability standards, is the second ingredient. McCarthy says GeSI for the electronics and communications sector is a good example of an effective collaborative initiative.
Third: relationship management. McCarthy says while working with suppliers is not a new idea, incorporating sustainability is more difficult because it requires “some knowledge from the buyer and for them to be properly advised by competent internal or external experts, which are in short supply.”
The fourth ingredient is supply chain development. Knowledge levels in many supply chains are very low. McCarthy suggests collaboration across a sector to develop a baseline of sustainability competence that can be a starting point for companies.
And finally, measurement. McCarthy says sustainability measurement relies on “generic reporting” like the Global Reporting Initiative, Dow Jones Sustainability Index and Carbon Disclosure Project. However, these don’t tell companies if their suppliers are delivering on the requested sustainability metrics.
Takeaway: Delivering supply chain sustainability will require standardized processes and practices, from procurement to measurement, as well as education of suppliers and collaborative initiatives across industries.
Image Credit: supply chain management via Shutterstock