28th May 2019
Sustainability is demanding more collaboration across the supply chain, both within teams, and with technology.
At a recent Sourcing Summit in Hong Kong, there was an intense discussion about why sustainability should be the responsibility of the entire supply chain network and not siloed. As the speaker from Esquel commented, ‘rather than an initiative that runs parallel to the business, sustainability has to permeate every process—and everybody. While the C-Suite has to set the tone and the directive, it’s up to all employees to do what he or she can.’
So how can you eradicate the silos that are standing in the way of sustainability? Here are the 3 key steps:
The MIT Sloan Management review states, 90% of executives believe collaboration is essential to sustainability success, but only 47% say their companies collaborate strategically.
Collaboration helps organisations to get a complete picture of the impact of their supply chain operations, as all data can be secured on one single platform. This way there is one-version of truth which enables teams to quickly identify any trends and information about suppliers and products that could provide them with an opportunity to make the necessary changes where required.
- Understand don’t undermine
Meeting public demand for transparency and visibility, and answering consumer questions on various social channels through campaigns such as #whomademyproduct, is an increasingly important part of customer relationships. Despite this, a startling amount of retailers aren’t able or willing to provide the information customers are looking for. As per the Baptist World Aid Australia 2018 Ethical report: Only 23% of companies shared data about their broad auditing results with the general public and only 1% know all their raw material suppliers.
It is possible to achieve the levels of visibility needed to instill consumer trust. Having a system led workflow to manage and share the entire process across the critical path, will give organisations a comprehensive view of each element from source through to product. This is particularly important when products contain sensitive materials such as timber. In these instances it’s essential for retailers to leverage insights into the end to end supply chain to track the source of every piece of wood used within the product line, from the type of tree to location and certification.
- Think Outside the Tick Box
“Knowing your supplier” means ensuring they conform to ethical standards and legislation, such as the Modern Slavery Act, Ethical Trade solutions and tracking tier 2 suppliers. Complying with the Modern Slavery Act is more than just a tick-box exercise of an organisation’s own HR records, it demands visibility throughout the supply chain, working with companies which can verify their compliance with the Act and that can be trusted.
Supplier relationships shouldn’t be transactional; they should be collaborative and strategic. This means monitoring the working conditions, labour relations, and occupational safety and health policies, committing to talking to your suppliers, educating them and encouraging them to use new systems. Measuring and tracking the allocation of factories to suppliers and their audit results is also critical in order to quickly identify any risks. Using the huge pool of under utilised data to predict issues and suggest the best way to mitigate these issues helps to proactively find ways to make a difference.
Sustainability requires a cultural change not just a change in process. Silos need to be broken down and stronger supplier relationships built, as collaboration is the key to success. The right technology is paramount to keeping everyone on track, providing a deeper understanding of one another and flagging any potential issues. Organisations who can look beyond silos and embed sustainability across their company culture will be the ones to lead the way in this area and gain consumer trust.