Sustainable Supply Chain Practices in Manufacturing
With 50-70% of an enterprise’s operating costs stemming from their supply chain, adopting sustainable supply chain practices is crucial for 21st century manufacturing. By implementing strategies such as reducing waste, ethical procurement and promoting transparency, companies can reap numerous benefits including cost savings and improved reputation. Although there may be challenges and barriers along the way, taking steps towards sustainability is essential for long-term success.
What is a Sustainable Supply Chain?
A sustainable supply chain refers to the management of the flow of goods and services, from the sourcing of raw materials to the delivery of the final product, in a way that minimises negative environmental and social impact while also maximising economic benefits. This approach focuses on integrating environmentally friendly practices, ethical labour standards and waste reduction throughout the entire supply chain.
Conversely, an unsustainable supply chain refers to an inefficient system of production and distribution that is not environmentally or socially conscious, financially unstable or does little to prevent wasteful practices. Unsustainable supply chains can have negative impacts on the environment and can have long-term financial consequences for a business.
The Impact of Unsustainable Supply Chain Practices
Environmental Impact
The environmental impact of manufacturing supply chains is far-reaching. The first among these is pollution, caused by improper waste disposal and emissions from transportation and production processes, poses a threat to air, water and soil quality.
Deforestation, driven by the demand for raw materials for packaging, has consequences beyond the catastrophic disruption of ecosystems. Irresponsible deforestation can lead to soil erosion, loss of biodiversity and have detrimental effects on local communities that rely on forests for their livelihoods.
These unsustainable practices not only harm the environment but also affect human health and biodiversity. It is crucial for businesses to adopt sustainable supply chain practices that minimise pollution, protect forests and reduce carbon emissions to mitigate these negative environmental impacts.
Social Impact
When supply chains are not sustainable, workers often suffer the consequences. Labour exploitation occurs when workers are required to work long hours, work in unsafe conditions, receive inadequate wages or experience abuse. In extreme cases, human rights violations can also occur, such as child and forced labour.
These unethical practices not only harm the workers directly involved but also tarnish the reputation of the companies involved. Consumers are increasingly concerned about the social impact of the products they buy, and companies that fail to address these issues may face negative backlash and loss of trust.
Economic Impact
When supply chains are not sustainable, businesses can expect a financial impact, including increased costs. Unsustainable practices can lead to the depletion of natural resources such as water, forests, and minerals. As these resources become scarce, their prices rise, resulting in increased costs for businesses.
Additionally, as mentioned above, unsustainable supply chains can contribute to pollution and environmental damage which could lead to fines and penalties imposed by regulatory bodies. These costs further add to the overall financial impact of unsustainable supply chains.
Examples of Sustainable Supply Chain Practices
Reduction of Waste and Use of Recyclable Materials
By incorporating practices such as waste reduction and the use of recyclable materials into a supply chain, manufacturers can minimise the amount of waste generated throughout their supply chain. This can be done through strategies such as optimising packaging to reduce material usage and ensuring packaging can be reused where possible
When selecting packaging suppliers, consider their ability to provide recyclable materials. Using recyclable materials in your single-use packaging components can help reduce overall waste. By reducing waste and using recyclable materials, manufacturers can play an active role in creating a more sustainable supply chain.
Financially Responsible Production
Manufacturers as part of a supply chain can implement strategies that prioritise efficient resource utilisation and long-term financial stability. Instead of relying on external loans for growth or machinery acquisition, manufacturers should leverage group resources where possible and prioritise internal investment. This approach reduces the burden of debt and exposure to economic uncertainty.
Ethical Sourcing and Fair Labour Practices
Promoting ethical sourcing and fair labour practices can be done by incorporating responsible and transparent supply chain practices. This means actively seeking out suppliers who adhere to ethical standards, such as fair wages, safe working conditions and respect for human rights.
Conducting thorough audits to ensure compliance with these standards and holding suppliers accountable for any violations is crucial to maintaining a sustainable supply chain. Collaboration with organisations and initiatives that promote fair labour practices, such as the Ethical Trading Initiative, can help manufacturers contribute to a more socially responsible supply chain.
Transparency and Accountability
Transparency is crucial in ensuring that all stakeholders have access to information about the environmental, social, and ethical impacts of a supply chain. This includes openly sharing information about sourcing, manufacturing processes and labour conditions, as well as addressing any issues or violations that arise.
By being transparent, manufacturers can build trust with customers and stakeholders, while encouraging others in their industry to follow suit resulting in industry-wide benefits. Accountability goes hand in hand with transparency, as it involves taking responsibility for the actions and impacts of their supply chain.
Challenges and Barriers to Implementing Sustainable Supply Chains
Despite the long-term rewards of a more sustainable supply chain, around 33% of directors say they have no business case for investing in one. There are many reasons for this, with many industries facing unique challenges, but some of the common challenges are explored below.
Resistance within the Supply Chain
Overcoming the various challenges and barriers to implementing sustainable supply chains can be a daunting task for larger businesses. One major challenge that businesses often face is resistance within the supply chain. This resistance can come from different stakeholders, such as suppliers, employees and even customers.
This resistance can stem from a lack of awareness or understanding about the benefits of sustainable practices. To overcome this, businesses can actively communicate to stakeholders the importance and advantages of sustainable supply chain practices. By addressing their concerns and highlighting the long-term benefits, businesses can gradually implement more efficient supply chains and logistics.
Lack of Resources and Expertise
One major challenge faced in sustainable supply chain practices is the lack of resources and expertise. Many organisations struggle to allocate sufficient resources and acquire the necessary expertise to effectively implement sustainability practices.
Limited financial resources can hinder investments in sustainable technologies and infrastructure, while a lack of expertise can result in ineffective decision-making and implementation. Additionally, the complexity and evolving nature of sustainability issues require continuous learning and innovation, which may be challenging without the necessary expertise.
Complexity of Global Supply Chains
Global supply chains are intricate networks that span across multiple countries and involve numerous stakeholders, such as suppliers, manufacturers, distributors and customers. The complexity arises from factors such as distance, language barriers and varying regulatory frameworks.
These complexities pose significant challenges to implementing sustainable practices. For example, ensuring transparency and traceability throughout the supply chain becomes more difficult when dealing with multiple suppliers in different locations.
Additionally, coordinating efforts to reduce carbon emissions or promote ethical labour practices becomes more challenging when supply chains are spread across the globe. Overcoming these complexities requires careful planning, collaboration and the adoption of technologies that enable real-time visibility and communication across the entire supply chain.
Strategies to Help Implement More Sustainable Supply Chains in Manufacturing
Education and Training
In order to implement more sustainable supply chains in manufacturing, businesses can invest in training for their employees. By equipping their workforce with the necessary skills, businesses can make informed actions that contribute to sustainability.
Education and training programs can be tailored to focus on various aspects, such as procurement, delivery and waste reduction techniques. Collaborating with educational institutions and industry experts can lead to customised training programs that address the specific needs of the organisation.
Collaboration with Industry Peers and NGOs
One major challenge faced in sustainable supply chain practices is the lack of resources and expertise. Many organisations struggle to allocate sufficient resources and acquire the necessary expertise to effectively implement sustainability practices.
Limited financial resources can hinder investments in sustainable technologies and infrastructure, while a lack of expertise can result in ineffective decision-making and implementation. Additionally, the complexity and evolving nature of sustainability issues require continuous learning and innovation, which may be challenging without the necessary expertise.
Incentivising Suppliers to Adopt Sustainable Practices
Achieving more sustainable supply and logistics chains is not solely down to manufacturers and suppliers. Governments and regulatory bodies incentivising suppliers and providing clear criteria and goals that suppliers must meet is a proactive way to drive positive change.
Financial incentives for suppliers and manufacturers would not only reward suppliers for their efforts, but also create a competitive advantage for those who embrace sustainable practices. Furthermore, offering discounted training and support to suppliers can help them overcome any barriers or challenges they may face in implementing sustainable practices. This sends a strong message that sustainability is a priority and incentivises suppliers to make necessary changes.
Sustainable Practices at Currie & Warner
At Currie & Warner, we are committed to being part of a more sustainable supply chain. Our partners can take confidence from our ISO 14001:2015 certified by the British Standards Institute.
Our distinctive approach combines traditional manufacturing techniques with green initiatives. Currie & Warner is dedicated to environmental responsibility, ranging from simple packaging material recycling to being the first UK sub-contract manufacturer to machine lead-free Eco Brass.
Adhering to a comprehensive environmental policy, we stay at the forefront of compliance as government environmental commitments evolve. Even as legislation changes, Currie & Warner remains a leader in the manufacturing sector's ability to adapt and meet the increasing demands for environmentally-conscious business practices.
