What Can You Do To Start Working With Your Suppliers?
I am captivated by the momentum that sustainable supply chain initiatives have built up. There is a lot going on in initiatives such as the Sustainability Consortium, the Sustainable Trade Initiative IDH, and the Sustainable Purchasing Leadership Council.
On the side of the social impacts, we have the Roundtable for Product Social Metrics. These efforts have gotten my attention since they are all pursuing different ways to set up sustainability in the supply chain, encouraging collaboration and transparency above all.
Your Supply Chain Is Important
But what is the reason behind all this movement around sustainability in the supply chain? For a company to really adopt sustainability in business, it needs to put its attention to where the main impacts are coming from. And these initiatives are doing so.
According to the GreenBiz report State of Green Business 2014, only 20% of environmental impacts are connected to the internal operations of a company. For most industries, including food and beverage, telecommunications and personal and household goods, over 80% of the environmental impacts occur indirectly, in their supply chains. Therefore, if a company wants to effectively reduce its environmental and social impacts, it has to work with its suppliers.
Ready To Start, But…
If your company has already understood this need, you have probably started a program to work with your suppliers on matters of sustainability. Congratulations! This is a big step on the path to transforming your business into a sustainable one, but… maybe you have noticed that it isn’t that simple. The challenges are countless.
To start with, you have internal challenges. Large corporations may have hundreds or thousands of suppliers and products, small sustainability teams, and purchasing and supply chain departments that are not familiar with sustainability. Sometimes, purchasing and supply chain departments are so cost-efficiency-driven that they don’t see sustainability as bringing business benefits. Often, there isn’t any understanding, results are not so promising, and on top of it all, there is too much work to be done.
As if this wasn’t enough, you have challenges on the other side, the supplier’s side. Suppliers complain about having to spend a lot of time answering the same questions from large numbers of clients, they lack sustainability teams or only have very small ones, they measure differently, they don’t have the time and resources, they don’t understand the requests, they don’t know what the information will be used for, they don’t see a benefit, they feel controlled… and ultimately, they don’t want to disclose information because they don’t trust the idea. Sounds familiar?
One Step At A Time
If you are facing any of these issues, I hope you’re not feeling so discouraged that you want to abandon this remarkable enterprise, and I would like to bring you some relief and guidance. But let’s take it one step at a time.
Above all, I am convinced of the benefits that sustainable supply chains can create. Just imagine: you engage your suppliers, and then they do the same with their suppliers and they with their suppliers. It can become a chain of change.
First, you need to prioritize. That’s where life cycle assessment (LCA) can help you. Through LCA, your company can identify where the main impacts or hotspots occur in the life cycle of your products. Knowing that, you can start prioritizing these hotspots and focus on identifying the suppliers involved in those steps of the chain. Second, you need to know the yearly spend and volume of your suppliers, so you can identify the most relevant suppliers to engage in a program.
Start A Plan
Having a clear image of where the main impacts in your supply chain are and which suppliers are involved will simplify your work a lot. From there, it is easier to put together a program with a sound objective. Once you do that, the next challenge is to engage your suppliers. I will tell you more about that in my next post. For the time being, start exploring your supply chain impacts and keep moving ahead, one step at a time.
Many of our clients struggle with these issues in their day-to-day work. At PRé, we recognize the need to respond to these issues, empowered by our 25 years as a leading voice in the field of sustainability metrics. For more information visit our Metrics Integration Services page. If you have any questions or comments, please contact me. I would be excited to help you to advance in your plans.
Soledad Contreras worked for PRé as a Sustainability Consultant from 2014 to 2016. As a part of Consultancy team, she coordinated the Roundtable for Social Metrics and provided training in Life Cycle Thinking.