Creating a sustainable supply chain can actually decrease supply chain costs, as a reduction in truck and air freight in favor of intermodal rail and ocean will result in substantial cost savings for your firm. Additionally, household buying power is increasing and more and more money is spent on consumer goods. Suppliers which receive higher sustainability scores can then be offered supply chain finance at a lower or more favourable interest rate, as a reward for their more ethical practices. Creating a More Sustainable Supply Chain. What’s more, a company with a good record on sustainability may be better placed to win new business and attract the interest of ethically minded investors. or supply chain finance solutions, companies can build a more economically sustainable supply chain. The world is changing faster than ever. 1. by . Different companies will prioritize different factors in accordance with their own sustainability goals, but considerations could include environmental, ethical or health and safety performance. They face calling for a range of solutions due to the diverse challenges. This might involve asking suppliers to commit to specific objectives or adapt their practices. So, companies must reduce the natural and societal costs of their products and services in order to satisfy their stakeholder and at the same time capitalize on rising demand. found that for a typical consumer company, the social and environmental cost of its supply chain far outweighs the impact of its own operations. But one condition can greatly slow down a company’s growth; poor sustainability. Companies that fail to embrace sustainability goals run the risk of falling foul of regulatory requirements, or incurring reputational damage. Sign up for our weekly newsletter or follow us on social media and you will get useful tips and can catch up with news and seminars. By using this approach, buyers can not only provide suppliers with the usual benefits of a supply chain finance program, but can also give suppliers financial incentives to improve their sustainability performance. Mcdonald's Supply Chain 1312 Words | 6 Pages. A well-functioning supply chain at every company, not only CPG need to address two major sustainability related risks. Companies will then be better placed to set sustainability goals for their supply chains, and work collaboratively with suppliers to reduce their sustainability impact. 22 Badurdeen et al., 2009 , p. 57 First, get connected with suppliers and localize the critical issues across the whole supply chain using tools such key performance indicators and sustainability standards. Determining a way to find out, and creating a policy based on how sustainable you want to be, is the essence of sustainable supply chain management. Patrick Mallon, Field Director, Business in the Community. A supply chain management plan can help ensure the efficient flow of such goods and services, maintain your ability to … According to a study from McKinseys by Anne-Titia Bové, there are two major trends that will contribiute to a strong growth projection for the coming years. Develop a policy for your suppliers and customers. A responsible supply chain typically ensures it operates within all legal and ethical parameters. Identifying risky suppliers. Include your supply chain in your considerations of how sustainable you are. They're looking at creating supply chains of top performers with the ultimate goal of using them to create a better, more environmentally sound, and ultimately more profitable company. The second approach is to link supply-chain sustainability goals to the global sustainability agenda. What are your goals and objectives, and how do you want to go about them? Overcoming these hurdles to resilient and sustainable supply chains will require collaboration among multiple stakeholders within a sector, both to set standards and fund platform-type investments, as well as to focus resources, share costs, and gain traction. And buyers can also benefit by reducing the risk of disruptions to their supply chains during challenging times. There are major opportunities in the future of consumer companies. The latter can, in turn, result in financial losses. Almost any business involves goods and services provided by other companies. Discussing the importance of a sustainable supply chain and actually creating one are two entirely separate enterprises. Related. December 14, 2020. As your supply chain expands, you’ll need … But in his own way, Tiffany was ahead of his time. 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