Supply chain is undoubtedly the backbone of any type of industry as it plays a vital role in supporting and shaping the business model. A supply chain includes all the material, resources, process and people involved in a business through all its stages. An industry cannot attain complete sustainability until and unless it follows sustainable practices at each and every level; therefore it is necessary to bring about sustainability through the entire supply chain to ensure sustainability of an industry. The idea of sustainable supply chain might sound impractical and complex, but it can be achieved through proper planning and guidance.
For incorporating sustainable practices through the supply chain, it is important to understand the structure and components of a supply chain. Though the supply chain varies according to the type of industry, the basic components and stages are similar for all industries.
Components of a supply chain
- Materials and resources used for production, largely determine the environmental impact of an industry
- Process carried out at various stages determine both environmental and social impact of an industry
- People involved in a business determine the social impact of the industry
Materials and Resources
Materials and resources are required at various levels of supply chain for manufacturing, storing and packaging. The choice of materials and source of energy affects both the environment and human health. It is important for any industry to be aware of ill effects of the materials and resources that are considered for usage by the industry.
The key inputs to an industry
For ensuring sustainability, it is important to understand and analyse the key requirements of the industry. Thoughtful selection and handling of materials has a positive impact on environment and society and ensures sustainability. Some points to be considered while selecting and handling materials and resources have been discussed below
Raw materials
- Use of environment friendly materials
- Use of materials that are safe for human health
- Avoid use of materials that cause depletion of natural resources
- Encourage use of locally available material to avoid transportation
- Avoid wastage of raw material
Resources
- Encourage procuring energy from renewable sources
- Avoid wastage of energy
- Use of energy efficient technology for storage and manufacturing
- Restrict water consumption
Packaging material
- Avoid plastic packaging
- Use of recycled and recyclable packaging material
Process chain
A supply chain consists of a sequence of processes that are carried out at various levels of an industry. By incorporating sustainable practices in these processes, the entire supply chain can attain sustainability.
Some sustainable solutions for various processes have been suggested below;
Procurement
- Procurement of environment friendly and safe material
- Consider local suppliers to reduce transportation
- Consider suppliers following sustainable practices
Manufacturing
- Provide safe work environment
- Design energy efficient production line
- Encourage use of renewable energy resources
- Restrict water and energy consumption
- Follow waste management practices
- Ensure pollution control
Warehousing
- Follow safety measures
- Use of renewable energy resources
- Use energy efficient techniques
Distribution
- Encourage distribution to local markets to minimize transportation
- Choose less polluting means of transportation for distribution to reduce carbon emissions (train, electric vehicles)
Retailing
- Encourage energy efficient buildings for retail outlets
- Procure energy from renewable sources
- Avoid use of plastic carry bags
- Recycling of waste paper
People
People play an important role in incorporating sustainability through a supply chain. It is very important to bring awareness about sustainability amongst all the people involved in a supply chain through communication and engagement.
Groups of people involved in a supply chain
Most of the companies are not in direct contact with their suppliers and this is one of the major challenges before supply chains. All these groups need to develop an understanding and follow sustainable practices in compliance with each other. Some sustainable solutions have been suggested below;
Suppliers
- Train and engage suppliers to promote sustainable practices
- Identify sustainability issues of suppliers
- Set compliance standards with suppliers
- Conduct inspections to ensure safe and healthy work environment at suppliers end
Manufacturers
- Provide safe and healthy environment to workers
- Prohibit child labour
- Limit work hours
- Ensure gender equality
- Provide fair wages to workers
- Reduce GHG emissions
- Ensure sustainable waste management
- Procure energy from renewable sources
- Ensure efficient use of resources
- Ensure wastewater treatment
Distributors
- Train and engage distributors to promote sustainable practices
- Reduce transportation by considering local markets
- Use of non-polluting means of transportation
- Use energy efficient techniques for storage
- Procure energy from renewable sources
Consumers
- Engage with consumers to promote sustainable practices
- Encourage responsible consumption
- Encourage sustainable waste management
- Avoid wastage
- Encourage recycling and reuse
Adopting sustainable practices is beneficial for all the groups involved in a supply chain. Manufacturers, suppliers, distributors can improve their ESG score through sustainability and widen their prospects. A sustainable supply chain leads to a sustainable business which contributes to sustainable development at large scale. The UN SDGs is a helpful tool for practical implementation of sustainable supply chain and through proper training and guidance, it is possible to turn an entire supply chain sustainable.
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