Evaluating Supply Chain Sustainability
Entrepreneurs start to take care of waste generation and resource consumption as SME business sustainability is the call of this time. Stakeholders require a company to be transparent and eco-friendly to occupy a leading position in the market. But business must consider not only its own operations, but the whole network of suppliers, and supporting resources to understand whether their products are sustainable. Putting all together, the company can take a comprehensive approach for measuring the environmental sustainability of supply chains.
Why Does Supply Chain Sustainability Matter?
Supply chain sustainability is a business issue that affects the business supply chain when it comes to the environment, risks, and waste costs. It is a relatively new concept that has different variations in levels of maturity, adoption, metrics, and management, which vary from country to country. However, the idea is common for all companies, which is combining enhanced revenue and falling customer costs, improving living standards, and diminishing environmental costs. This all creates new practices that must be considered while establishing an SME business sustainability strategy and goals. Motivations for incorporating supply chain sustainability are as follows:
· Brand reputation and management
· Profit growth
· Decreasing costs
· Clients’ demand
· Expectations of investors
· Government regulation
Lifecycle Assessment as the Means to Spot Sustainability Issues
Lifecycle assessment (LCA) is beneficial for SME sustainability. It is a precise analysis of the entire life cycle of the product from the prospect of sustainability. Using this approach, you can measure the overall impact of a product or service on the environment, accounting for supply chain sustainability. LCA is a systematic process that consists of four steps:
1. Goal and scope
The main purpose of this stage is to make sure that LCA is carried out regularly. You need to describe the product, activity, or process. Next, establish the context in which you are going to perform an assessment, and state the lines and environmental issues you want to review.
2. Inventory analysis
Now you can get a full picture by looking at all environmental outputs and inputs that are associated with a service or a product. Identify and measure water, energy, and other materials as well as environmental releases (for instance, solid waste disposal, air emissions, etc.)
3. Impact assessment
At this step, you need to draw the conclusions which let you make superior business decisions. You are expected to analyze the environmental effects, and evaluate them by what is most crucial for your business. Also, you should decide how to integrate the outcome and share it with the target audience.
4. Interpretation
It is high time to evaluate the results of two previous stages and make sure that all conclusions are sustainable enough. Now you can come with improvement decisions, realizing what impact your product has on the environment.
LCA may take scrupulous technical calculations, but this is necessary for understanding the impact your company is making.
Assessment of Supply Chain Sustainability
LCA should help companies account for all the suppliers that take part in the delivery of service or the creation of a product. Thus, they need to:
- Spot critical issues across the supply chain. They should check used natural and human resources along the entire product life cycle to understand the impact of their goods. Entrepreneurs can reach suppliers’ sustainability reports to learn how they adhere to local laws and make conclusions on further possible cooperation.
- See how the supply chain performance aligns with their own sustainability goals. After identifying critical issues, companies can set goals for decreasing the harmful impact. It is recommended to use the tips from scientists, and always track the process of their implementation and measure the success.
Further Steps
Many companies sincerely want to incorporate environmental responsibility throughout their supply networks. An excellent way to step on the path of SME environmental sustainability is to assess supply chain sustainability and work out strategies to reduce a negative impact. If you do not have the required expertise for building programs, consider online sustainability learning on SustainOnline. Also, companies can do more; they should send a regular message to the suppliers that social, economic, and environmental issues are all crucial.
