May 2023 – This Month In Labor
Sustainability.
You can’t throw a rock without reading about – or hearing about – the sustainability of the supply chain.
Sustainability takes on many forms with a variety of definitions:
- Environmental (think: deforestation and carbon footprint)
- Economic (think: near-shoring, buyer-supplier relationships)
- Employee (think: getting women in the pipeline)
- Ethics (think: transparency and traceability)
After all, as the Wall Street Journal reports, global supply chains have been permanently disrupted and trends have been dramatically accelerated in the last few years. Companies are looking for ways to future-proof their systems, labor force, and products.
Here are some insights from recent articles:
Environmental // Avoid Risk and Enable Sustainability
A new Oxford Economics study of 1,000 supply chain executives across the world revealed that environmental sustainability isn’t just trendy. In addition to being good for the planet, it also gives a boost to employee satisfaction, market differentiation, and public perception.
A Forbes article discusses how companies are seeking to reduce their carbon footprint, eliminate waste, and increase circularity, and provides five strategies to do so, including:
- Strategic sourcing and production
- Visibility through real-time data
- Collaboration across departments and companies
- Leveraging intelligent technologies
- Full embedded (vs. siloed) sustainability efforts
Economic // Economic Uncertainty is Changing the Buyer-Supplier Dyad
According to an article on Supply Chain Brain, the buyer-supplier relationship is in constant flux, with the power dynamic shifting accordingly. Recently, we have seen buyers are becoming more cautious and risk-averse, while suppliers are seeking to maintain margins and manage supply chain disruptions.
To mitigate supply chain risks and uncertainty, buyers and suppliers are increasingly collaborating and sharing information. This includes sharing forecasts, production plans, and inventory levels to ensure that both parties are aligned and can respond quickly to changes in demand.
Economic uncertainty is increasing the importance of flexibility and the focus on sustainability in the supply chain. Suppliers that can adapt quickly, provide flexible solutions, and have clear sustainability practices are more likely to win business[1] .
To reduce their reliance on a single supplier or region, buyers are diversifying their supplier base. This allows them to spread their risk and ensures that they have backup options if one supplier is unable to deliver.
Employee // Building the Pipeline by Lifting Female Supply Chain Leaders
Diversity and inclusion are hot topics across the entire workforce, but there is a unique need to increase the representation of women in leadership roles within the supply chain. According to an article on Supply Chain Brain, it takes intentionality and a multi-faceted approach.
The recommendations include:
- fostering a gender-inclusive culture through things like flexible work arrangements and unconscious bias training
- providing mentorship and education opportunities in the form of mentors and leadership or technical trainings
- increasing visibility and recognition for women in industry publications and internal teams
Ethics // There Are No Shortcuts to Supply Chain Due Diligence
A recent podcast episode on Supply Chain Brain discuss how the pressure on global supply chains to engage in ethical practices is increasing. Since the pandemic, 25 new regulations around the world have been put in place that require due diligence. From anti-forced labor in the US and anti-green-washing throughout the EU, companies need to stay on top of their suppliers to assess their labor practices, environmental impact, and human rights record.
Unfortunately, the intent of the law is very clear, while reporting structures are still lacking, leaving companies to create systems as they go. The best-in-class companies require suppliers to show full transparency along the chain in order to be approved. While this has been the standard in some industries for awhile (e.g., food, agriculture), for others it is new (e.g., electronics).
This may mean that companies have to continue to ask questions and dig deeper. Some companies discover tens of thousands of suppliers they didn’t know about as they do due diligence. The goal is not just reporting, but also accountability.
No matter how you define it, sustainability remains a hot topic in supply chain logistics – and doesn’t seem to be cooling off any time soon.
At nGROUP, we recognize that sustainability is a journey, not a destination. As the world changes, so must our targets and tactics. That’s why we’re proactive in building sustainability all across our business – from internal processes and our team to our partnerships. As our business has become increasingly concentrated in reverse logistics and re-commerce over the past few years, we have grown our interest and capabilities in sustainability. We’ve taken good steps, but realize there is still room to grow. Keeping our finger on the pulse of the industry motivates us to continue moving forward.
This sentence could also be a blog call-out.
