Why incorporate sustainability in supply chains 

If you’re a hardware company in 2020, the sustainability of your products should be a driving factor when considering product design and supply chain. According to a study published in 2019, there is overwhelming evidence to suggest that modern consumers are willing to pay more for sustainable products. If you’re able to become a company that incorporates sustainable practices, consumers will reward you with increased sales and brand loyalty.

Manufacturing is never perfect. No matter what you do, it’s going to leave a mark on your profits, people, and the planet. Whether you’re a startup or a large business, your supply chain plays a small but significant part of the global economy that can have a ripple effect down to the various local communities that contribute to the making of your product. 

Aside from the monetary benefits, building a sustainable supply chain can provide long term value environmentally, socially, and economically, which aligns with the UN’s Sustainable Development Goals.  

We’ve already covered some basics of sustainable manufacturing, so let’s take a look at how we can make progress towards sustainability in our supply chains.

Make the business case for sustainable supply chain management

To make big changes within any organization, you will require buy-in from key stakeholders within your company. Incorporating sustainability into your supply chain will be no different. First, direct your focus on developing a business case for sustainability. Ensure engagement of investors, your finance department, supply chain managers, product designers, customers, and end consumers. When you fully understand the internal and external landscape of your industry and company, you can accurately evaluate the risks and opportunities you are facing. 

Here is a small sample of drivers to consider while building your business case for sustainability:

  • Are you minimizing your business’s impacts environmentally, socially, and economically?
  • Are your suppliers incorporating minimum standards in management practices (fair wages, appropriate hiring ages, good health & safety conditions, etc.)?
  • Evaluate how to reduce the cost of materials, energy, and transportation
  • Evaluate how to increase labor productivity
  • Evaluate sub-supplier supply chains
  • Understand raw material resource management, extraction, and logistics to see where improvements can be made.
  • Are you meeting customer and business partner requirements?
  • Are you innovating for longevity and a changing market?
  • Are you considering the circular economy / complete lifecycle of your products?
  • Are you sourcing raw materials with social and environmental impacts considered? (biologically based plastics that emit fewer greenhouse gasses throughout their lifecycle)

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Every company is different, so consider your unique situation and how sustainability can benefit your entire organization and those that your organization impacts. 

Establish a supplier code of conduct

Good supply chain managers consider their suppliers an extension of their company and treat them as such, nurturing these partnerships for the long haul. Therefore, developing a shared mindset of sustainability with your suppliers is important.

A good initial step in the right direction: create a supplier code of conduct that helps to establish expectations, guidelines, and metrics to evaluate performance over time. Some examples of expectations you might set are:

  • Safe workplace
  • Working-age above 16
  • Minimized waste production
  • Minimized water use
  • Operating off renewable energy or offsetting energy use through other means
  • Responsible sources of raw materials used
  • Participation in a material recycling program
  • Proper chemical management
  • Fire & emergency action plans in place

There are many more factors to consider. Apple’s supplier responsibility report has some great examples of incorporating sustainability principles into their supply chain. 

Since this is becoming more of a global issue, many companies are not afraid to share their sustainable supply chain practices. It would be worthwhile to ask around within your industry and work with your peers to establish a shared standard so that suppliers don’t need to adhere to the standard of each individual company. Do what you can to take the stress off of your suppliers since this might be a significant change for them. They will greatly appreciate it!

Consumers want sustainably sourced products

Today's generation of consumers are increasingly demanding sustainably sourced products, so it’s well worth the consideration to make changes in your supply chain. Make no mistake that it will be a huge task, and it won’t happen overnight. Taking steps towards sustainability can have significant positive impacts environmentally, socially, and economically around the world. Hopefully, with the information we’ve provided, you’re now equipped with the basic knowledge of establishing a sustainable supply chain!

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