Adopting an ethical people-first approach
, vulnerabilities concerning human rights, modern slavery, and health and safety have surfaced. The stability of these supply chains faces various risks, notably exacerbated by disruptive markets and social forces like COVID-19.
Such pressure may entice some organizations to compromise ethical standards to meet demand, putting the human links in supply chains at risk.
These challenges are widespread, as indicated by a survey of supply chain and procurement practitioners, with 80% advocating for stronger reporting legislation to prevent future abuses.
Supply chain sustainability extends beyond mere revenue and profit considerations; it entails recognizing the human and environmental impact of product supply chains. Embracing a people-first approach to supply chain management offers organizations numerous benefits.
Through this approach:
Investors gain confidence in supporting ethical business practices.
Regulators are satisfied with adherence to sustainable practices and standards.
Organizations meet customer demands for socially responsible consumer goods.
Customers gain confidence in socially responsible products and services aligned with the transition to net zero.
Building a sustainable supply chain
Supply chain disruptions can significantly impact financial performance. Building a sustainable supply chain increases resilience?and improves quality control. Close collaboration with suppliers and logistics providers reduces overheads and optimizes cash flow. It also reveals new opportunities, like accessing capital markets.
Consumer buying choices can be influenced by various factors, among them are sustainable values like environmental protection, ethical practices, and fair working conditions for all employees. Up to 66% of consumers will abandon organizations whose behaviour is inconsistent with their stated purpose.
By placing sustainability goals at the core of a business's commercial strategy, supporting innovation, and fostering collaboration with suppliers, it can pave the way to a leadership position in a competitive landscape.
Complex supply chains affect both people and the planet. By promoting a healthy and sustainable workforce and taking a stand against corruption and environmental impact, you can add value to your business.
Key market drivers to embrace sustainable values
Key market drivers are pushing businesses to embrace sustainable values, mitigate risks, increase profits, gain a competitive advantage, and uphold equality and inclusivity. These drivers highlight the significance of a people-first approach in supply chain management:
Consumer Demand - younger generations prioritize sustainable values like environmental protection, ethical practices, and fair working conditions.
Risk Mitigation - building a sustainable supply chain enhances resilience and improves quality control, mitigating the impact of disruptions on business and financial performance.
Increased Profit - closer collaboration with suppliers, efficient inventory management, and optimized shipping and transport costs reduce overheads and optimize cash flow, leading to increased profits. It also opens new opportunities, including access to capital markets.
Competitive Advantage - placing sustainability goals at the core of your commercial strategy, supporting innovation, and collaborating with suppliers create a leadership position in a competitive landscape.
Equality, Inclusivity, and Responsibility - complex supply chains have significant impacts on both people and the planet. Supporting a healthy and sustainable workforce while taking a stand against corruption and environmental impact adds value to your business.
By putting people and the environment at the forefront of their supply chain management, organizations can not only meet the demands of today's socially responsible consumers but also ensure resilience, profitability, and a competitive edge for a sustainable future.
Mitigating the impact of disruptions
Setting clear aims that align with your vision, values, and mission statement is vital. To achieve this, getting to know your suppliers and working with them to establish for your monitoring program is crucial. Defining the sustainability performance areas that require prioritization is also essential.
Adopting a standards-based approach can enhance an organizations' ability to embed robust processes for mitigating the impact of disruptions in an ever-changing global landscape.
