Supply Chains Must Join The Sustainability Train

0
416
photo|thefifthestate.com.au

In the great book, ‘the living company’  published in 1997, Arie de Geus described a study conducted by Shell in the early 1980s on companies that had survived for more than 200 years. What those organizations had in common was an understanding of themselves first as being part of a community and second as a money-making machine.

Over the past few decades, we have lost a lot of the community approach. However, a business is a group of people working together. You cannot build a new vision without a strong community-oriented culture-which, by the way, is rare. It sounds good, everybody nods their heads, but the gap between that idea and how most companies are managed is enormous.

With each passing year, sustainability becomes a focus in everyday life. 2019 is no exception. From metal and paper straws replacing plastic ones to the heightened awareness of the plastics waste in our oceans many businesses are making sustainability part of their company’s culture. Most businesses have streamlined their supply chain to not only become eco-friendlier in each step of the process but also reduce costs.

Sustainability is a big culprit in any supply chain. Effecting change across a supply chain needs more focus on the nature of the relationships involved. A big manufacturer or retailer who pressures upstream suppliers to get their costs down creates room for very little trust and very little ability to innovate together.

Embracing partnerships with NGOs and other non-business entities gives access to expertise that a company cannot grow fast internally. A classic example is water: for instance, a few years ago Coca-Cola decided to cut their water usage for making a litre of coke from more than 3 litres to 2.5 litres. However, it overlooked the 200 plus litres it took to grow the sugar that went into making that coke. This was later found out when Coca-Cola partnered with the World Wildlife Fund (WWF) which knew how to analyze the water footprint of the value chain. Today Coca-Cola knows the difference between drip-irrigated sugarcane and flood irrigated sugarcane.

A sustainable supply chain plays a huge role in making a company greener. It goes beyond storage, logistics, manufacturing, and production. Of course, the ultimate benefit of sustainability is to aide the environment, but there are also more tangible benefits as well. Often times, implementing sustainable practices in the business’s supply chain will come with an up-front fee that will prove somewhat costly in the short term but sustainable in the long run.

Offering wider margins for profit, while helping to keep a business running for the foreseeable future is the exact goal for any company and aiding this through sustainability is a brilliant strategy. Henceforth, implementing a sustainable system will streamline business processes, increase efficiency, lower operating costs and increase revenues. These sustainable practices are overlooked too often- forgetting that you get what you pay for.

Boosting a sustainable supply chain resonates with customers and end-users making the companies’ internal and external business processes transparent. Instead of trying to cover up, showcase innovation. Some of Africa’s biggest companies are open about their sustainability practices and are gaining recognition for it; consider Safaricom and Dangote groups whose goals are aligned to the UN’s 2030 agenda for sustainable development. They are both good examples of huge companies renowned for implementing sustainable practices in their supply chain.

Not only does a sustainable supply chain improve short term efficiency but also helps the organization’s plan for the long term. Implementing a reliable system affords a company a much more accurate scope for the future. Understanding long term needs allows the organization to better realize new opportunities, which would help the company to grow in a more efficient manner. 

The demand for sustainability in business is a trend that has become increasingly prominent on an industry-wide level. No longer is it just enough for a company to just talk about sustainability, they now have to turn words into actions and ensure it extends throughout their supply chain.

The next decade belongs to smart firms!

LEAVE A REPLY

Please enter your comment!
Please enter your name here