Supply chain sustainability, or SCS, refers to meeting the needs of the stakeholders in an organization through business practices that value and protect natural resources, reduce environmental impact, and improve social well-being. Sustainable supply chain management helps managers understand their own company’s supply chain processes to identify opportunities for improvement concerning both environmental and social sustainability.
Supply chain sustainability can also help those within a company achieve their life goals by using appropriate decision-making regarding production. Supply chain managers need to understand the life cycle of various materials and then be able to make the proper choices concerning the company’s supply chain.
What is Sustainable Supply Chain Management?
A sustainable supply chain refers to an organizational structure that promotes long-term development while maintaining the natural environment. Sustainable supply chain management focuses on efficiently producing products without jeopardizing social and environmental issues. Many organizations have adopted this concept due to the increase in environmental awareness and economic opportunity in the market. A company’s management team should understand supply chains and how best to utilize them for their organization’s benefit, so each component reflects the ideas of corporate sustainability.
In addition, sustainability in supply chains is what is referred to as “the integration of environmental and social aspects with traditional economics” through the development and distribution of goods. Sustainable management helps companies reduce the number of resources used in production and ensures minimal damage done to the environment through pollution or depletion.
Moreover, sustainable supply chain management is an effort to reduce the company’s impact on the environment to preserve resources or provide added value from these materials. It does not include an additional monetary expense for companies and does not require that the companies spend more time or money on these efforts.
Why is SCS and Sustainable Supply Chain Management Important?
SCS is important because it improves the sustainability of a company, organization or society. Some benefits of SCS initiatives include:
1. Environmental Care
SCS initiatives are important for improving the environment. They help in minimizing pollution and protecting the environment. SCS initiatives minimize waste, reduce the use of natural resources, and help with the proper disposal of waste materials. In addition, they help in recycling waste materials and using renewable energy. Furthermore, these initiatives help improve air quality, reduce greenhouse gases, and minimize surface runoff.
2. Improves Reputation
Supply chain sustainability helps companies improve their relationships with their customers and stakeholders. Consumers are becoming increasingly more aware of how their purchases impact the environment, and they can connect those purchases with certain aspects of the supply chain. In this way, sustainable supply chain management provides the consumer market with a sense of trust. They know that the companies they purchase goods from are actively working to preserve natural resources and provide social benefits to those within the organization.
3. Improves Productivity
Companies that have adopted sustainable supply chain management have observed an improvement in employee morale since employees know that their work is beneficial and increases social well-being. Employees will also feel more enthusiastic about their jobs and more dedicated to their organization as a result of knowing that they are making a difference in their company. Thus employees are generally more productive when they believe they are working towards a common goal, eventually leading to better production output.
4. Reduces Costs
Sustainable supply chain management also helps companies save money by reducing production costs, which leads to lower prices for consumers. If a company is able to replace materials that they were using with other alternatives, they can reduce their production costs. The reduced cost of goods can then be passed on to the consumer as a way of giving back while at the same time generating more revenue and profits.
5. Increases Profits
Finally, sustainable supply chain management can also help to increase profits. This is the result of a decrease in production costs and the improvement in productivity that is commonly observed with SCS management. Production becomes easier, more efficient, and less costly by using fewer resources and less energy. Also, by studying how their supply chain impacts others due to their decisions, companies can make better business decisions that lead to increased profits in the long run.
Implementing a Sustainable Supply Chain
There are several steps in the implementation process that organizations may find helpful. Implementation is about ensuring that sustainability is included as part of the decision-making process for all procurement and operation decisions within a company’s supply chain and then monitoring those initiatives to ensure they are executed effectively.
1. Define Goals
It is critical to define a company’s broad goals and identify the specific processes and systems that are needed to achieve those goals. This task should be completed before other steps.
2. Develop a Strategic Plan
A company must develop a strategic plan focused on achieving its goals. This includes creating an organizational vision, mission statement, and values and developing goals relating to the supply chain.
3. Create Strategy
Sustainable supply chain management strategies must be created and implemented in order to be successful in execution. Strategies should be formed for the entire supply chain, which includes all suppliers as well as each of the internal departments and processes related to materials and manufacturing. The strategy should also include a thorough understanding of the current business model, which can be improved by applying sustainability practices.
