DRIVING SUSTAINABILITY IN SUPPLY CHAINS

With competition increasing, businesses are incrementally outsourcing non-core activities resulting in a complex multi-country supply chain network. This mesh makes it challenging to implement and monitor sustainable sourcing strategies.

- Indra Guha

During the last decade, we have experienced a stark change in consumer preferences and the way consumers perceive ‘sustainability’ of the product they purchase or use. People are conscious about the way things are getting produced. The end does not always justify the means. While the usefulness of the end product is relevant, what goes into the product and processes involved are equally important. Irresponsible, unethical, or opportunistic behaviour has become detrimental for a company’s reputation.

With competition increasing, businesses are incrementally outsourcing noncore activities resulting in a complex multi-country supply chain network. This mesh makes it challenging to implement and monitor sustainable sourcing strategies. In most cases the place of production can be traced to developing nations. The production process, part or whole, is often carried out in factories of the supplier. The focal company which sells the product under their brand name, is legally not responsible for the conditions at the point of production. Nevertheless, the focal company/brand gets badly hit if the chain falters on critical sustainability counts. This calls for association by guilt. We have seen some of the biggest brands face the music at different times owing to supply chain issues in different sustainability areas.

There are very clear advantages lined up for Sustainable Supply Chain Management (SSCM) practices. One, it can provide competitive advantage – innovative ways of optimising on natural resource management, fulfilling social responsibilities and a robust governance framework puts business in good stead as a positive differentiating factor; on the other, the licence to operate is gradually becoming more stringent with stakeholders demanding sustainability management across the value chain.