Sustainable Supply Chain – 4 Steps To Creating An Ethical And Responsible Supply Chain

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Whether you’re dealing with foodstuffs, medical equipment suppliers or textile manufacturers, it’s essential to ensure you have an ethical and responsible supply chain. It may be tempting to bury your head in the proverbial sand and only worry about the companies you deal with directly. However, this can leave you connected to problematic business practices occurring further down the supply chain. To save your business from the dramas that can arise from this, follow these five steps: 

1. Don’t underestimate the value of supply chain ethics

Though the good you’ll be doing in the world should be motivation enough, sometimes we all need a little extra push to do the right thing; especially when the right thing requires a whole lot of extra work on our part. If you find yourself in need of a motivation bump when establishing your socially responsible supply chain, consider this: 

Around 90% of millennials will switch to a brand if it displays impressive business ethics. On average, these customers are also happy to pay $27 more for a $100 product if they’re guaranteed that workers operate under good conditions. Similarly, people are willing to pay $18-$19 more for products made with ethically-sourced materials from businesses that offset their carbon emissions. 

These statistics, provided by the 2015 Cone Communications Millennial CSR Study, prove that supply chain ethics can be a profitable exercise for businesses large and small. 

2. Identify trustworthy trading partners and nurture those relationships

Whether you’re assessing an existing trade partner or considering a new one, you’ll want to confirm that they maintain sustainable working practices, treat all staff fairly, use conflict-free materials in their products, and have eco-friendly initiatives in place.

With so many moving pieces, it can be hard to find companies who not only tick all these boxes but whose other trading partners are equally scrutable and scrupulous. Once you’ve established working relationships with ethical companies, it’s essential to nurture the connections as they are of immeasurable value to your business. Try finding an ecological consultant if you find it difficult to make a right decision. 

3. Do a reality check on claims and labels

In a bid to boost profits, many businesses play fast and loose with the truth when it comes to their marketing and product labels. As a business owner, it’s your responsibility to be honest and transparent with your customers. A big part of this involves ensuring all the claims made on the products you sell are legitimate. 

Walmart offers an interesting example of a supply chain ethics overhaul in action. The company recently made an effort to do away with food labels that come with a misleading “use by” date. Many food items are safe to consume well after the dates on their packaging. However, companies can make more money if people throw “expired” items out and purchase new ones. Of course, this contributes to the 103 million tons of food wasted each year in America alone. 

4. Never stop monitoring your supply chain

This may sound like a monster task, but it can be easily achieved through the wonders of AI and machine learning. These tools can help you ensure your supply chain is measuring up well against your ethical standards. They can also help you set goals and apply measurable KPIs for you and your trading partners. 

It may take some extra work and a whole lot of research to get your supply chain in order. However, the benefits for you, your business, and the world at large are immense enough to make the exercise well and truly worth it.