While choosing supplier, vendor, manufacturer, shipping, and packaging, the focus of businesses is to keep in mind social and environmental impact; and effectively utilize resources. It is because your customers and the company’s stakeholders want you to deal with sustainability concerns. Today, we’ll discuss sustainable supply chain management; its definition; how to launch and implement it, key elements, advantages, and disadvantages.
What is Sustainable Supply Chain Management?
Sustainable supply chain management (SSCM) is the flow of goods and conducting business operations that have a limited social and environmental impact. It focuses on establishing a balance between social responsibility, the environment, and economic growth. It has become highly sustainable in recent years because companies are facing a lot of pressure from their stakeholders.
The objective of sustainable SCM is to develop an SC network and process that is socially and environmentally responsible while being economical. Sustainable SCM focuses on meeting the existing needs and demands of customers without jeopardizing future natural needs.
However, there are many strategies for sustainable SCM, but they all have common goals and objectives of making the SC process more efficient and less jeopardizing to the environment. Businesses and companies are implementing sustainable methods and practices in their SC processes to decrease costs and amplify environmental impact.
The sustainable SCM practices and methods comprise of following;
- Supporting Fair Labor Practices
- Selecting environmentally friendly material
- Employing Alternative energy sources
- Amplify recycling
- Low wastage
Key Elements of Sustainable SCM
Some of the key elements of sustainable supply chain management are as follows;
Social sustainability is the method of developing and analyzing conditions where all members of society can satisfy their social roles efficiently and effectively. Their focus is to respect the rights and roles of other social members and the environment.
Environmental sustainability is the method of developing and maintaining conditions where nature and humans can live productively and harmoniously. It allows them to fulfill and satisfy the social and economic requirements of future generations.
Economic sustainability is the method of meeting the needs and demands of existing generations without compromising the needs of future generations.
Launching Sustainable SCM
Some of the main steps on how to launch sustainable supply chain management are as follows;
We are aware of the fact that customers prefer those businesses that are implementing sustainable strategies. It is significant to empower customers and stakeholders to make eco-friendly choices. Companies should know when the customers need their product, or they could wait for a few days to receive all of their goods in one shipment. You should provide them green shipping option at the check-out point.
Transparency and fulfillment across the SC network help you to satisfy and fulfill every order. You could make the position of the inventory close and near to the customers; it allows you to make quick delivery and low carbon emission.
It is significant to keep in mind the consumer buying pattern, if the store has limited foot traffic, then you don’t need expensive packaging. It offers you an opportunity to decrease the cost of an elaborate display of goods. However, the online shopping trends are increasing and they offer you an opportunity to ship various products in one packaging.
You could protect the bottom line and decrease the waste by quickly re-marketing the returned products. A mass volume of returned products go to landfill annually in the US; retailers face the loss of returned goods comprising of 309 billion US dollars.
Advantages of Sustainable SCM
Some of the main advantages of sustainable supply chain management are as follows;
Low Environmental Impact
It is the most obvious benefit of sustainable SCM and it allows companies to decrease their impact on the environment. When companies have a limited environmental impact, then it helps them to amplify their social and economic performance.
Limited Wastage of Resources
Businesses and companies that implement sustainable SCM practices, often it would decrease their cost relevant to resource consumption and waste disposal. It allows them to develop new revenue sources by generating new sources of energy and selling recyclable materials.
Better Relationship with Suppliers
Sustainable SCM helps companies establish better and more fruitful relationships with vendors and suppliers that are following sustainable strategies. Better and improved relationships with suppliers would help the company to gain a competitive edge.
Along with decreasing the harmful impact on the environment, sustainable SCM helps businesses and companies to improve their overall business performance. If you have done it correctly, it would result in the form of a win-win situation.
Disadvantages of Sustainable SCM
Some of the main disadvantages of sustainable SCM are as follows;
Economic & Social Impact
It is difficult to manage the economic and social impact of the global SCM. The economic activity would benefit the local community by creating employment opportunities. The negative social impact is that it would happen through mass-scale industrialization by spitting pollution on the local people.
Limited Environmental Impact
It is highly difficult to decrease the environmental impact because SCM activities generate carbon emissions through manufacturing and transportation. It comprises promoting recycling and decreasing the wastage of resources. However, many companies are implementing sustainable practices, and there is a lot of room for improvement in this area.
It is difficult to ensure the ethical treatment of workers throughout the SCM. It comprises giving access to protection and rights, safe working conditions, and paying fair wages. However, it is difficult to analyze the condition at every stage of SC, but you could take various steps.
Conclusion: Sustainable Supply Chain Management
After an in-depth study of sustainable supply chain management; we have realized that sustainable SCM is highly significant for the growth of businesses and companies. If you are learning about sustainable SCM, then you should keep in mind the abovementioned elements, launching and starting points, advantages, and disadvantages.
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