What Is Supply Chain Sustainability?

What is Supply Chain Sustainability?
A sustainable supply chain is one that uses environmentally and socially sustainable

practices at every stage to protect the people and environments across the whole chain. This
means an organisation upholds environmental and social standards for their own operations
and their suppliers’ operations.
The environmental standards include issues like environmental degradation, deforestation,

greenhouse gas emissions, pollution, and water security.
The social standards include issues like working conditions, forced labour, fair labour
practices, and health and safety.
Supply chain management focuses on speed, cost, reliability, optimization, and continuous
improvement of the supply chain. Global supply chain sustainability efforts focus on goals
that are environment friendly, improve resource optimization and retain or increase ROI at
the same time. Sustainable chain management is put into practice right from the procurement
of goods and services to delivering the right products at the right time.
Sustainable supply chain is a strategic business decision that includes sustainable sourcing,
production, packaging, and optimized, responsible delivery of produced goods. SCM
sustainability efforts under an enterprise’s corporate social responsibility activities also drive
green operations and result in cost savings and an improved supply chain over the long term.
How to Build a Sustainable Supply Chain?

To build a sustainable supply chain, an enterprise needs to identify the issues in its supply
chain management. The ideal scenario is to break down the supply chain pipeline into various
identifiable segments, after which an enterprise can focus on adopting a circular supply chain
where the raw materials are recycled back into the production process. The reduction in waste
by recycling and reuse of materials creates a balance — where input equals output.
A crucial step in sustainable supply chain management is to bring behavioural changes

throughout the supply chain, where the management must clarify the objectives to employees
and provide the necessary help. Behavioural change is often possible through training and
capacity building programs. Examples include creating awareness on waste management,
energy efficiency, labour rights, women’s health and women empowerment.
Managing sustainable procurement is another important cog in building a sustainable supply

chain. To adopt the sustainable procurement model, it helps to understand day-to-day
involvement with suppliers. This involves setting up a supplier code of conduct, conducting
supplier audits at regular intervals for proper supplier evaluation. Enterprises need to be
aware of sustainable procurement tools like self-assessment questionnaires (SAQs), category
risk evaluation, corrective action plans as well as sustainability scorecards.
Role of Supply Chain Collaboration in Sustainability
Supply chain collaboration is an established practice in the industry to reduce operating costs,
reduce leaked spend and increase margins, improve order management and productivity, as
well as capture demand changes and reduce inventory liabilities among others – with an aim
to create a sustainable supply chain in the long run.
The best supply chain collaboration tools leverage transformative technologies to centralize
procurement for all trading partners associated with an organization. Real-time visibility
ensures that just the right amount of inventory to fulfil commitments.
How to Improve Supply Chain Sustainability?

The practical, sustainable supply chain starts with mapping the entire sustainable chain. To
improve sustainability in supply chains, managers must assess risks and opportunities.
Prioritizing work is essential in achieving a sustainable supply chain. Sustainability in the
supply chain improves by bringing in sustainable targets in the procurement process. Setting
smart goals is key to establishing sustainability in the supply chain.
Maintaining transparency and clarifying sustainable objectives with clients and suppliers is
essential. Enterprises can address sustainability challenges, waste management, and labor
practices by working together with suppliers. Another critical element is multi-tier
collaboration with suppliers to gain a comprehensive view of the entire supply chain. This
way, it’s easier to group suppliers with similar objectives, thereby optimizing the supply
chain.
Best Practices for Sustainable Supply Chain Management

These are the 10 easy to implement and easy to follow best practices for a sustainable supply
chain.
 Supplier Code of Conduct

 Green Packaging
 Sustainable Transportation
 Ethical Sourcing
 Waste Reduction
 Life Cycle Assessment
 Product Design
 Stakeholder Engagement
 Reporting and Transparency
What are the Key Elements of Supply Chain Sustainability?
The three elements of a sustainable supply chain are as follows:
 Environmental Responsibility:
It involves protecting the environment from potential harm caused due to supply chain
activities like production, storage, packaging, transportation and other minute
operations.
 Financial Responsibility:
It addresses the financial needs of the firm. Financial markets include shareholders,
employers/employees, customers, clients, business partners, domestic institutions and
financial institutions.
 Social Responsibility:
It involves principles, ethics, morals and philanthropic expectations of the society

from a business. This means every person in a sustainable supply chain is treated
fairly, equally and in line with human rights requirements.
Why is Supply Chain Sustainability Important?

The importance of supply chain sustainability is going beyond the green revolution. Taking
measures in favour of nature and the environment is necessary, but companies should also
focus on overall sustainability. Sustainability in the supply chain is key to improving
productivity and optimizing costs.
Other benefits of supply chain sustainability include:
 Helps reduce environmental impact

 Brings continuous improvement in the supply chain
 Improves company partnerships
 Creates win-win business opportunities
 Promotes a conducive work culture
 Helps in implementing better CSR activities, thereby increasing a company’s
goodwill
 Helps develop better supply chain risk mitigation techniques
Source : https://www.gep.com/supply-chain-sustainability
IKEA as Case Study

Becoming People & Planet Positive
The IKEA People & Planet Positive strategy describes the sustainability agenda for the total
IKEA value chain. Our sustainability ambitions and commitments are set for 2030 in line with
the UN Sustainable Development Goals.
The purpose of this strategy is to inspire, activate and lead us in our decision-making
and goal setting so that we together can achieve the big positive changes we want
to see in the world, and for the entire IKEA ecosystem. This strategy gives us a roadmap
to follow and outlines a strong, common long- term agenda. The IKEA People & Planet
Positive strategy describes the sustainability agenda and ambition for everyone in the IKEA
franchise system and value chain.* It will stimulate action across IKEA in the coming years.
The strategy will be reviewed annually to secure alignment with the total IKEA strategic
framework.
Recycled polyester – a step towards a more sustainable future

Polyester is the most commonly used synthetic fibre in the world. IKEA has taken the
decision to only use recycled polyester instead of virgin polyester, a decision bringing us one
step closer to one of our ambitions, only using renewable or recycled materials by 2030.
Their Sustainability program provides a convenient way to the IKEA consumer to dispose of
their IKEA products and appliances when they reach their end-of-life.
The consumer deposit the Plastic as well as the E-waste at any of the IKEA stores in the
Waste collection bins provided or can call Service Centre at 1800 1200 72659 (Toll-Free)
from 8 am to 9 pm or visit website to know the nearest collection centre where they can drop
off the Plastic Waste or the Electronic waste.

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What is Supply Chain Sustainability?

A sustainable supply chain is one that uses environmentally and socially sustainable

The environmental standards include issues like environmental degradation, deforestation,

How to Build a Sustainable Supply Chain?

A crucial step in sustainable supply chain management is to bring behavioural changes

Managing sustainable procurement is another important cog in building a sustainable supply

How to Improve Supply Chain Sustainability?

Best Practices for Sustainable Supply Chain Management

 Supplier Code of Conduct

It involves principles, ethics, morals and philanthropic expectations of the society

Why is Supply Chain Sustainability Important?

Other benefits of supply chain sustainability include:

 Helps reduce environmental impact

IKEA as Case Study

Recycled polyester – a step towards a more sustainable future

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