4 Ways to Leverage Your Supply Chain Towards Sustainability

We mentioned before that to create a sustainable supply chain, it's important to consider building a solid business case for your stakeholders. However, managing a supply chain can be a daunting endeavor as a legacy business but especially as a startup. Now let's be real, as a startup, there's no way you're going to have as much weight to throw around as Apple does, so you might think that suppliers won't be incentivized to make changes internally towards sustainability. But just because you're not a big fish doesn't mean there aren't ways to practice sustainable supply chain management. If you're managing a supply chain, you typically have four levers to pull to make progress towards sustainability.

1. Select new suppliers with high sustainability capabilities

When auditing a new supplier, you can specifically look for capabilities in sustainability. Their transparency in answering these questions provides insight into the progress they've made towards sustainability in their supply chain and operations. Transparency is key to building a strong relationship with the suppliers. 

As a general overview, you can start by asking what initiatives they're making towards sustainability, and if they would provide insight into their full supply chain. If you want to dive into the specifics, you can ask questions about where they're getting their raw materials, how they manage waste, chemicals, and how they provide a safe workspace for their employees.

2. Work with existing suppliers to raise expectations and set commitments for continuous improvement in sustainability

Setting expectations through a robust code of conduct can come in handy. Make your intentions known with current suppliers, but let them know that you would like to make these changes gradually. An immediate change in their processes and operations would be a shock to their system, and could negatively impact production. As an important partner in your organizational ecosystem, you should make the business case to them as to why they should make these changes and how it will benefit them. From there, you can put an implementation plan in place. A code of conduct can help develop a shared mindset of sustainability across your company and its partnerships. 

3. Work to consolidate purchases 

Sourcing a majority of components from fewer reputable and trusted suppliers is generally more sustainable than sourcing from many suppliers. Consider your purchases to reduce the number of resources required for production and transportation. Some would argue that supply chain consolidation increases risk, especially if a critical component supplier goes under. Diversification can be an excellent way to reduce risk, but when considering sustainability, it can be a significant source of resource usage. Evaluate your risk tolerance to determine if this is the right path for you. A majority of Dragon's database of trusted contract manufacturers are vertically integrated, meaning they are a one-stop-shop for production and box build. Many contract manufacturers in our network have relationships that allow them to source components from local vendors. These relationships allow for the reduction in production and logistical costs across the board.

4. Establish incentive programs to encourage suppliers to implement sustainability programs

For both large and small companies, an excellent way to encourage manufacturing sustainability within your supplier network is to establish an incentive program. By establishing benchmarks early in the process, you can measure and track their progress towards sustainability. Based on their progress, you can reward them with various incentives.

Some examples of incentives could include:

  • Placement on a preferred supplier list
  • Increased business
  • Recognition & rewards
  • Reducing the number of audits
  • Cost-sharing for sustainability improvements

Wrap-up

As with everything in manufacturing, making progress towards sustainability will take time and there will be struggles. But even as a smaller team or company, you have several options when it comes to making progress towards sustainability within your supply chain. Establish long term sustainability goals, and evaluate your supply chain to see where you can make improvements.

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