Sustainability is on the agenda of all organizations. It is a consensus that governments, society, and companies around the world must adopt practical measures to stop the advance of climate change and leave a positive footprint for the future.
Faced with this scenario, supply chains are the great backlog to achieve it. Along the way, obstacles and challenges will be encountered, but the long-term benefits for business and the planet will be irrefutable.
By definition, a supply chain comprises all the partners and suppliers with which the business interacts. And to become sustainable, each of the links must comply with the three pillars of ESG.
- SOCIAL The entire ecosystem must guarantee ideal working conditions, a good remuneration structure, a healthy relationship with the communities in which it operates, and generate a positive impact on these same social networks, including circular economy strategies or continuous training of drivers, operators, and other human teams.
The second pillar is governance: from obtaining and maintaining certifications and listings, such as ISO-14001 or the Dow Jones Sustainability Index (DJSI), to strategic planning methodologies and physical and digital security.
This pillar is what has traditionally been most associated with the concept of sustainability, which includes aspects such as reducing the carbon footprint, optimizing vehicle routes to pollute less, transitioning to renewable energies, reusing equipment for reverse logistics, or recycling waste associated with transport.
The important thing in all of this is that the company is able to identify, in the first place and for the three fundamental pillars, the impacts of all its suppliers, measure and certify them, and finally, organize a work plan to continue improving.
Therefore, digital transformation plays a crucial role in creating sustainable supply chains. It is not just a question of implementing the Internet of Things (IoT) to monitor goods, artificial intelligence to forecast demand or blockchain to achieve traceability of products and their transformation, but of having the right technology partner to ensure that the technology, processes, and people will go hand in hand to make the project a real success.
Historically, the starting point has always been from within the organization, where purchasing strategy, operational logistics, internal movement of goods, warehouse management, and customer delivery processes are reviewed. It is a limited ecosystem, known and with a high degree of study. However, the real challenge occurs when it is necessary to extend the concept of sustainability beyond the company's walls and take it to the field of relationships with third-party suppliers, carriers, logistics operators, or warehouses.
Generating Value in a Highly Competitive Market
One of the major barriers on the way to a sustainable supply chain is precisely the existence of this multiplicity of players who do not always have the same levels of maturity in terms of digital transformation, and on which any transformation project must focus not to lose its essence before the end customer.
If it happens, the ecosystem itself will naturally end up excluding suppliers that do not meet the expected standards.
It is here that we must be attentive to the great winds of change when choosing a key partner for a business. Green procurement is already transforming the mechanisms for choosing partners, where we no longer just choose the supplier that best meets our product expectations or the most cost-effective, but the one that has the best sustainable performance and is naturally integrated into your customer's digital ecosystem.
A Commitment That Has No End
Implementing a sustainable supply chain is a challenge that must be sustained over time. In fact, the very concept of "sustainability" is adapted to the principles of continuous improvement: what was cutting edge in the past is now the baseline for future improvements. The positioning of the competition, market trends, and mindset of each organization will continue to drive the industry, and what three years ago could be considered advanced in terms of supply chain sustainability, today is the most basic of standards.
A Chain Towards the Future – A Game Where Everyone Wins
The benefits of incorporating the sustainability of the supply chain are born from the care and future of our planet, but get stuck in business in clearly quantitative aspects, but also and not least in the company's positioning, more difficult to measure in advance, but with greater strategic impact. In the first case, it was demonstrated that sustainable strategies lead to operational excellence, reduced energy costs, minimized waste in processes, and optimized available resources. In addition, companies that certify their sustainability strategy through international standards have access to more favorable financing rates, reducing their financial costs. Once again, technology consolidates itself as a fundamental ally: data is what allows us to understand if we are on the right track and what the opportunities for improvement are.
In terms of positioning, on the other hand, in the coming years, those looking for a supplier will increasingly opt for those with sustainable added value, giving us a greater market opening, increasing the volume of revenue, and positioning us as an outstanding partner in relation to our competition.
Therefore, there is currently a clear impact on business opportunities and the return on required investments, and where the main benefit of implementing a sustainable supply chain will be globally capitalized. Technology, data generation, and certification will be the gateway to this traceable, reliable, and sustainable supply chain. The key to creating a better future for everyone is in our hands.