How to Build Sustainable Supply Chains That Are Consistent With Consumer Values
Sustainability — the act of maintaining resources to prevent depletion — has become an important factor in consumer purchasing decisions. Consumers appreciate it when businesses put in the effort to be more socially and environmentally responsible. According to a report by Capgemini, nearly four out of five consumers (79 percent) adjust their purchase preferences based on this aspect alone. What’s more, 77 percent say that a brand’s sustainability approach can increase customer loyalty. This confirms what many organizations have known for some time: enterprises need to take a greater role in achieving sustainability, and that includes building a more sustainable supply chain.
All businesses must take note. Even consumer stalwarts like Apple and Starbucks, which have immense brand value, could be negatively impacted if any part of their supply chain engages in unethical or unsustainable practices.
Some strategies, such as using slow-steaming container ships, can be effective at reducing both emissions and expenses. However, in a global market with suppliers all over the world, achieving sustainability can be very difficult, especially when cost is the primary factor driving many supply-related decisions. Thus, in order to achieve sustainability and environmental efficiency, organizations need to look at all suppliers in the chain, including those that serve their partners.
Transparency is Essential, Data is Invaluable
Greater transparency — which increases supply chain agility, resiliency and cost effectiveness — is absolutely necessary to enable better decision making. This is critical in building and enabling sustainability, and it's essential because supply chains can only become more sustainable by first becoming more responsible.
Brands should broadly examine their suppliers, including manufacturers and logistical providers, and evaluate how each of these businesses contributes to their sustainability goals. A decision at any point in the supply chain could negatively impact other parts of their operations, offsetting a brand’s overall progress. In order to overcome these challenges, brands must clearly understand the consequences of each choice.
These two components — transparency and managing the ripple effect of decisions within the supply chain — are heavily rooted in data. By creating a data-driven, transparent network that can quickly and effectively pivot during unanticipated events, brands will be better equipped to achieve their sustainability goals.
Conducting Business in a Manner That’s Consistent With Consumer Values
Sustainability cannot be achieved overnight, however. The reality is that every supply chain network, no matter the size, is likely to involve multiple parties and providers. Each provider has its own set of suppliers, manufacturers and material sourcing partners. Logistics companies also have concerns unique to their businesses, including priorities, stakeholders and pressures that must be managed.
This isn't a small undertaking, but it has become very important in a world where consumers are committed to supporting enterprises that are focused on sustainability. They want to be assured that the brands they use are conducting business in a manner that's consistent with their values. Organizations can achieve sustainability internally, but that is only the first step. They must also work hard to ensure that their suppliers, as well as the wider network through each supplier, are doing the same.
Be Prepared to Meet Consumer Expectations
If businesses want to build a more sustainable supply chain, they need to have a clear understanding of their entire supplier network. They'll also need to accept accountability for all parties involved. This might sound like an insurmountable task, but by taking the necessary actions to manage and monitor their supply chain — focusing on data, transparency and gaining visibility into the extended supplier network — brands will be best prepared to meet consumer expectations.
Antony Lovell is vice president of applications at Vuealta, a global company providing tailored advisory, implementation and ongoing support services for Anaplan, the leading connected planning platform.
