Building Sustainable Value Chains

Learnings from the Fifth Edition of Treeni’s Sustainability for Breakfast (S4B)

Our recent edition of #S4B focused on how to incorporate sustainability in supply chain. This was arranged in association with Institute of Sustainable Communities. Newer standards, investor pressures, climate risks, social risks, and wide spread environmental pollution and social inequity are forcing companies to look at impacts beyond their own operations. Stakeholders are more focused on knowing how your business is sustainable and green. Supply chain forms one such part of any business, which plays an important role in making an organization sustainable.

Responsible Sourcing

Walmart’s contribution to incorporation of sustainability supply chain is legendary. They have been pioneers in this area since 2005 and launched their famous Walmart Supplier Assessment questionnaire and Index in 2009. Being one of the largest retailers in the world, responsible sourcing is an integral part of the Walmart business, and the company shared the processes, systems and technology interventions they are implementing to ensure they are not only a responsible company, employer, but also a responsible buyer. It is a great example of how large companies can be a great role model for the rest of the industry.

Working towards building Sustainable Communities

Institute of Sustainable communities’ presence is India is being felt through their work in establishing EHS+ centers in India. ISC believes in creation of sustainable communities and for this reason their work globally is helping create resilient supply chains. Suresh Kotla, Director (Sustainable Manufacturing), Institute for Sustainable Communities stated, “At ISC, we have been working with various global organizations to help them implement sustainable processes for building great supply chains. Large business houses will have to play a major role going ahead to mitigate the risk and to achieve sustainability in the supply chain.”

LCA approach to sustainable supply chain

Approach to supply chain from life cycle impact perspective is necessary to identify hotspots from both social and environmental perspective. Dr. Avantika Shastri from SABIC presented how life cycle approach to sustainability at SABIC has helped to define feedstock strategy, marketing of sustainable products, designing of products, assessment of megaprojects from sustainability perspective, technology development, and risk management.

 Inclusion of SMEs

Sustainability is not just a big corporation problem. Here are the top 4 hurdles faced by SMEs in implementing sustainability in their operations.

  • Limited understanding of the strategic importance of sustainability
  • Availability of suitable and affordable technology platforms to manage sustainability initiatives
  • Supporting government policies.
  • Access to sustainable investments.

Suppliers need to be deeply engaged and technology enabled, for innovation and for building resilient value chain, without which SDGs (Sustainable Development Goals) cannot be met.

Technology Enablement

Vital to this is technology enablement of sustainability in the supply chain. Some of the key areas of technology enablement are:

Real time data capture

To trace data for multiple tiers of suppliers. Big Data, Mobile Applications, social media, IoT, etc.

 Traceability through data

To trace where the materials were coming from all the way from source of origin. Blockchain, QR codes, ERP, Online surveys.

 Transparency and collaboration in Business models

For reduced costs, delivery times, liability. VMI (vendor managed inventory), PRO (producer responsibility organizations), product design, etc.

Better (remote) connectivity and faster service

To ensure reaching remote areas and faster service. Drones, glocal business models, mobile apps

 Predictive Logistics

To infer effects of climate change, social movements/unrest, distances, etc. GIS, maps with real-time traffic and other data

 Corporate Responsibility

To enable tracking of carbon, water or other footprints and to collaborate with suppliers to reduce their footprint and address fair trade practices and ethical sourcing.

Conclusion

Enterprise players across the globe have been working towards the implementation of sustainability practices in their operations. Collaboration with suppliers can be achieved through the implementation of scientific tracking and reporting methods and enable enterprises to create real impact. Governments and enterprise must enable inclusion of sustainable practices for SMEs.

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