Five steps towards a more sustainable supply chain
John Perry, Managing Director at SCALA, shares the processes businesses should undertake to become more sustainable.
Sustainability is becoming increasingly crucial to both consumers and key stakeholders alike, with research from Unilever finding that one in three consumers now choose brands based on their social and environmental credentials. This, combined with the UK having recently become the first major economy in the world to legally commit to net-zero emissions by 2050, means that businesses are now having to ensure that their supply chains are as sustainable as possible – the question is, how?
Developing a business case
The first step towards achieving a more sustainable supply chain is to build the business case for action. This will help to identify the highest priority supply chain issues for the company, evaluate opportunities and risks, and build the internal support needed to move forward.
The business case for a particular company depends on a variety of issues, including: industry sector, supply chain footprint, stakeholder expectations, business strategy and organisational culture. However, in most cases, supply chain sustainability offers a number of significant benefits.
This can include minimising business disruption from environmental, social and economic impacts; protecting a company’s reputation and brand value; reducing the costs of material inputs, energy and transportation; increasing labour productivity and fostering growth by meeting evolving customer and business partner requirements.
Establishing a vision
Once the business case has been successfully put forward, it’s important to then establish a clear vision for the company’s sustainable supply chain programme. Defining the objectives at the outset of the project will prove invaluable when it comes to devising the strategy. Having a vision in place also makes it easier to evaluate the success of the programme and identify areas for continued improvement.
In order to ensure full support from the business’s senior executives, which will be crucial for success, they should be actively involved throughout the creation of the vision. In addition to the c-suite, representatives from across the business including sales, marketing, finance, IT systems, manufacturing and procurement should be consulted, as each of these functions will have a role to play in the implementation of the sustainable supply chain programme.
A key element of supply chain sustainability is efficiency, which is best achieved through careful planning. Sophisticated digital modelling tools can provide end-to-end supply chain perspective, enabling businesses to pinpoint inefficiencies and design a more sustainable supply chain and logistics network going forward.
By assessing all potential options and analysing a range of future ‘what if’ scenarios, companies can ensure not only that their supply chain and logistics networks are resilient to future changes, but also that they can benefit both the environment and their bottom line by eliminating wastage and overspending.
For example, modelling software can help supply chain professionals to minimise physical space used by identifying redundant facilities or opportunities to rebalance storage, avoid empty miles by analysing their transportation network, and reduce emissions by directing inventory to serve demand.
While it’s impossible for businesses to fully control the practices of every third party they deal with in their supply chain, they should work to ensure that wherever possible they only partner with companies that share the same goals, sustainability values, and environmentally-conscious supply chain processes as themselves.
Customers will ultimately hold the businesses they interact with directly accountable for the products or services that are delivered. So, if it is discovered that products contain parts manufactured unsustainably that have come from an external supplier, it won’t be the supplier that faces the backlash and suffers the consequences.
Qualifying the right sourcing partners is a critical piece of the sustainability puzzle, and it requires businesses to enforce the same high sustainability standards to which they hold themselves. Establishing and communicating expectations through a supplier code of conduct is an effective way for businesses to involve suppliers in their sustainability efforts.
When looking to improve sustainability, logistics is one of the areas where the biggest difference can be made. With a large number of vehicles moving high volumes of goods to diverse and dispersed locations, there is a significant risk of inefficiency when it comes to transport operations.
In order to optimise their logistics network, businesses should look at whether their fleet’s size, type and geographic spread remains optimal; whether their distribution centres are in the right places; whether customer order profiles and delivery requirements have changed since the original transport operation was designed; and whether a dedicated transport operation is even still needed, or if it could be more economical and environmentally-friendly.
This will not only help to ensure that the supply chain can operate as smoothly as possible, but also reduce empty miles and carbon emissions, which has a significant positive effect on a business’s environmental impact.
In addition to helping the environment and satisfying public demand for ethical and environmentally sound business practices, sustainability can drive significant business value both now and long into the future.
For more information on business topics in the Middle East and Africa, please take a look at the latest edition of Business Chief MEA.
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.