During the 2022 ISO Annual meeting, sustainability played a prominent part of the discussion surrounding environmental, social, and governance (ESG) issues. Industry leaders are crafting innovative ideas to tether sustainability principles across their operations rather than simply providing aspirational decarbonization objectives. This includes creating and implementing roadmaps to illustrate technology and infrastructure investments for forecasting long-term sustainability targets. Organizations are embedding sustainability in key decision-making strategies such as KPIs, ROI assessments, product road maps, and design principles. Many leaders are increasing sustainability requirements for vendors and suppliers to actively pursue supply chain transformations by applying accountability measures. The core focus areas to achieve supply chain sustainability success include incorporating into the procurement process, improving operations, and eliminating waste.
Your organization’s purchasing and procurement department is the best staring point for operational implementation. Since the purchasing department carries out the supplier evaluation and selection, it’s responsible for the core process of supply chain management. This allows for risks along the supply chain to be significantly reduced or even avoided. Employees will require regular training courses to stay informed of any changes. Developing a sustainable procurement plan is one way to future-proof your organization against a potential shortage in supply. The benefits of sustainable procurement are as follows:
Because consumers are more aware of unethical practices that exist in many supply chains, they may choose to buy from organizations who are actively managing social and environmental impacts. Investors are also aware of the reputational and financial risks of organizations that have unsustainable practices within their supply chain and may choose not to invest. Consumers are willing to abandon brands that do not change and will pay more for an ethically and sustainably sourced product. Best practices, from an operations perspective, to better manage sustainability are as follows:
The Circular Economy (CE) approach consists of the 3Rs (Reduce, Reuse, and Recycle). The 3R’s system is used as a tool to improve sustainability within operations. CE enables more effective use and reuse resources by employing competent design and manufacturing processes. A zero-waste supply chain ensures each step of your organization’s processes increases value to the customer and boosts your competitive advantage. Moving beyond the 3Rs, zero-waste supply chains follow the “four R approach” to waste management:
Each step in the “four R approach” is evaluated to ensure all materials are reused or recycled. The goal is to eliminate waste sent to landfills, incinerators, or water supplies. Zero-waste strategies focus on comprehensive waste prevention and are designed to change the way materials flow through the entire production pipeline. Organizations are achieving positive zero-waste efforts by doing the following:
Since the original guide “Supply Chain Sustainability: A Practical Guide for Continuous Improvement” was launched in 2010, supply chain sustainability has become mainstream for businesses. Organizations have an extreme focus on transparency which has already proven to improve employee quality of life. Recent growth in ESG investing has been driven by investors, including millennials, who prioritize social and moral considerations. Sustainable supply chain management is a marathon, not a sprint. When organizations dedicate resources to ensure sustainability factors into their supply chain pipeline, success will come.
—Ashley Rhodes, St. Onge Company