What's in store for supply chain sustainability in 2015?

  • Written by Peter Needle
  • Published on 9 January 2015
  • News Blogs

Over the past decade, supply chain sustainability has grown in importance from a moral obligation to a strategic necessity, and companies are increasingly aware of its potential as a powerful vehicle to implement profound business changes.

Over the past decade, supply chain sustainability has grown in importance from a moral obligation to a strategic necessity, and companies are increasingly aware of its potential as a powerful vehicle to implement profound business changes.

John Elkington, founder of strategic management consultancy SustainAbility, first coined the term ‘triple bottom line’ in 1994. He argued that companies should address the traditional financial measure of corporate profit alongside alternative ethical and environmental measurements. Elkington argued that no organisation can appreciate the full costs involved in its business model without considering the three pillars of sustainability - people, planet and profit.

People

The ‘people’ pillar of sustainability refers to the importance of using fair and ethical labour and showing consideration for local communities. These measures determine how socially responsible a company can be throughout its operations.

Using ethical labour not only promotes supply chain sustainability by ensuring a stable and high quality production process, but also by helping brands to develop a positive public reputation.

Planet

The second pillar of supply chain sustainability refers to the ‘planet’, or more specifically to an organisation’s level of environmental responsibility.

Many companies face a particular challenge regarding concerns about the production of raw materials. These processes are typically conducted in early stages of the supply chain in which the company rarely has any direct control or involvement.

Sustainable sourcing measures can help companies to avoid the use of excessive water, energy, hazardous chemicals or unsustainably sourced materials. In order to manage this, they need to have visibility over the entire lifecycle of products, and supply chain solutions can play an essential role in monitoring these processes.

Profit

Finally, the ‘profit’ pillar of sustainability refers to an organisation’s ability to achieve growth, but can also refer to the total economic benefit enjoyed by the local and wider community.

For instance, supply chain technologies such as Segura can provide a direct return on investment by calculating rebates, informing transport requirements, enforcing quality control and protecting against fraud.

However, a recent article in Greenbiz argues that the challenge of improving supply chain sustainability requires retailers to innovate “outside of the mapped territory of operational and supply chain efficiencies”.

Many companies need to embrace the introduction of new technologies such as RFID, 3D printing and mobile devices across the supply chain. The amount of data now available from stores, warehouses and further up in production supply chains is fuelling a host of new business models and opportunities, and increasing market competition considerably. In order for a company to ensure financial sustainability, it must evolve.

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