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5 Steps to a Sustainable Supply Chain

supplychainTrusting your partners, treating other businesses how you would wish to be treated and extending participation beyond the first tier of suppliers are just three of the five key steps to building a sustainable trading partner network, according to supply chain software company E2open president and CEO, Mark Woodward.

As business sectors compartmentalize and an increasing part of any businesses services, such as logistics or manufacturing, are outsourced, it is becoming harder for companies to keep control of the activities in their supply chains. But by embracing five key ideas, it can be possible to have a successful, scalable and sustainable business network that achieves profit for all, Woodward writes on Supply-Demand Executive.

From the start of any supply chain project, the business at the helm needs to identify and communicate the objectives to all involved, Woodward says. This means that brand owners and suppliers need to be on board when deciding upon and designing key performance indicators against which success will be measured.

Second, a brand needs to be the kind of partner itself that it would want to deal with if a supply chain relationship is to endure. Policies such as sharing technology, best practices and being flexible create a culture that breeds innovation and a culture of improvement.

It is also important for the brand business to achieve a full buy-in of any sustainability policies it wishes to see across its supply chain. A well-designed incentive program is one way of getting to this point.

By extending participation to second- and third-tier suppliers you can increase buy-in to the principles and avoid turnover in suppliers that inevitably breeds disruption. This will effectively “boost the horse power” of the sustainability of your entire network.

Finally, brand owners need to trust their suppliers. The heart of any sustainability strategy is creating long-term partnerships across a supply chain. Through sharing information and ideas, a business can increase visibility, and incubate shared business values.

As US manufacturing gets back on its feet after a lengthy economic downturn, stakeholders are demanding higher standards when it comes to sustainability at all stages of the value chain — from the sourcing and production of goods to the end-of-life impacts of these products. That’s according to Art Dodge, CEO of waste rubber repurposing firm ECORE International writing in a recent column for Environmental Leader.

This heightened expectation will help drive a new era of US manufacturing and create new opportunities for differentiation in the marketplace, he writes.

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One thought on “5 Steps to a Sustainable Supply Chain

  1. Have to say that is a pretty light article … not sure what the point is ? The “Golden Rule” of supply chain ?

    In reality a supply chain is driven by a desire to create competitive advantage and profits.. .generally not commercial interests and social engineering

    Suggest looking into S&OP as a governor and instructor of where and how to prioritize and prosecute real supply chain business advantage.

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