5. Sustainable Supply Chain Management
Supply chain management is the major operation of any business.
Sustainable supply chain management is being widely recognized as a key component of corporate sustainability. However, the scale, complexities, and evolving market relations make supply chain management one of the biggest challenges for companies.
When the social sustainability of a business is considered, the entire supply chain of a business can have a big impact on advancing human rights, fair labor standards, and anti-corruption laws. Thus, it is important for businesses to shift towards a better and sustainable supply chain management.
Better supply chain management can be achieved when the chief executives view the supply chain as a component of their workforce and set goals for best practices across the supply chain which can include key components like selection, training, auditing, and remediation. Such aforementioned steps enhance the perspective and contribute to better decision-making beyond procurement in the supply chain.
What is Supply chain sustainability?
Supply chain sustainability is the management of the environment, social and economic impacts, and the encouragement of good governance practices, throughout the life cycles of goods and services.
Supply chains are the driver of the global economy, serving - delivering goods and services around the world, connecting businesses and individuals across different geographies, cultures, countries, and regulatory boundaries.
Steps in Sustainable supply chain management -
According to the UN's Global Compact Management Model[4]; in order to achieve sustainable supply chain management a flexible framework can be adopted to mainstream the strategies in operation. In addition, there are three core principles to sustainable supply chain management - governance, transparency, and engagement.
Governance- It helps to make a framework of rules, guidelines and policies to improve the efficiency of the supply chain management.
Transparency- This principle helps to incorporate traceability and reporting in the supply chain and thus, helps in minimizing waste and improving supply chain management.
Engagement- Helps in building awareness amongst people involved in the supply chain regarding various factors like compliance, laws etc through engagement activities like training, audit and other activities.
There are various steps involved in sustainable supply chain management.
Commit: The companies must commit and form a vision to make their supply chain sustainable. Also, they must ensure the applicability of the same.
Assess: The companies must assess and identify the challenges in the path of establishing a sustainable supply chain management system and the impact on people, planet and profit.
Define: Also, the companies must clearly define their needs and terms with the supplier and other stakeholders in the supply chain. This step helps to ensure the smooth flow of the supply chain.
Measure and Communicate: The companies must track their progress and have effective communication within the operation of the supply chain.
The following figure has further information regarding the same.
Additional Information
Read more about Gender equality and Diversity
Read more about CSR|UNIDO