Roadmap to supplier sustainability management


By: Ddivya Kumar -- Senior Research Analyst, Procurement Opportunities

01 January, 2017

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Sustainable consumption has emerged as a mega trend especially in the Fast Moving Consumer goods,and Food and Beverage industries. Customers are curious to understand the sustainable production of products and it is one of the motivating factors for these companies to address social and environmental issues in the supply chain. The importance of applying the principles of sustainability across the entire supply chain including the company's as well as the supplier's operationsis vital as that determines the reputation and revenue for a company. Although it is a complex process, the failure to act might be the biggest risk of all. The article aims to contribute real time best practices in enhancing sustainability in a supply chain which mitigates disruptions. The article highlights current and future sustainability issuesthat need attention, the problem areas that companies should focus on and the methods to eradicate the barriers to adoption of sustainability among the suppliers. The article also mentions how specialist sustainability assessment tool providers/platformscan help in capturing details relatedto a supplier's complianceto the sustainability policies and standards set by the company.

Roadmap to become a more sustainable organization

The path to become a sustainable organization is continuous and there is no finish line. Best-in-Class organizations aim to incorporate sustainabilityin all business activities. They continue to measurethe effectiveness of sustainability programsat regular intervals.

Suppliers operatingfrom which regions should be prioritized for sustainability assessment?

It isessential to understand where raw materials come from. Often it is important to prioritize sustainability assessment for suppliers in remote and risk-prone locations. Though assessing sustainable practices of suppliers that provide large volumes of raw materials is of high importance, the decision for prioritizing suppliers should be based on aspects such as regions where most volume originates or where the potential risks are high. It is a best practice to prioritize suppliers originating from Latin America and Asia-Pacific regions to undergo sustainability assessment.

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