Achieving a Responsible Supply Chain Through Standardization
Supply chain standardization allows for improved efficiency, and can be paired with sustainable methods to ensure that companies stay on track when attempting to meet and beat targets. As such, the process of responsible supply chain standardization is one that any business is likely to go through at some point.
Take fresh produce, for example. It’s a massive market that goes through a long supply line as it travels throughout the world, while each item is subject to a number of different regulations depending on the region. In terms of a supply chain, standardization ensures that each item is similar, conforming to the rules set out by the supplier. Of course, it doesn’t have to relate to a product, as the term can be used to describe a process, procedure, or anything else involving improving business practices.
Here’s everything you could possibly need to know about responsible supply chain standardization, from what it involves, to common issues and how to get started with your own frameworks.
What is Supply Chain standardization?
Standardization is a popular method to implement improved practices, whether it be via defined processes or new frameworks. It will help to develop and measure the components of a part or process, which should lead to streamlined results in the future. No matter the size of a business, the majority could benefit from increased supply chain sustainability. Rather than starting from step one every time, you will be able to ensure that everybody is on the same page, and you should see improved results in the long run.
Consider McDonalds, and their large supply chain which spans a number of global markets. standardization comes in two forms. There’s the food itself, which is similar no matter where you go. (A Big Mac tastes like a Big Mac, whether you’re in Amsterdam or London.) Then there’s the packaging, which also conforms to set standards.
In terms of sustainability, huge strides have been made in recent years, from a switch to paper straws in the UK, to ensuring that napkins and cup carriers are made from 100% recycled materials. It has helped to repair their reputation, which took a serious hit in the mid-2000’s following the release of Super Size Me.
The changes have happened all the way down their respective supply chains, affecting both buyers and suppliers along the way. The point is, no matter the product, part, or process, standardization should help to see improved results if you’re hoping to develop or measure new sustainable frameworks or practices.
We’ve focused on food so far, but the same rules can be applied to almost any product or service. For example, Clothing is another large market that is currently pushing towards a more sustainable future.
Take C&A, a clothing retailer based in the UK. They’re the world’s largest buyer of organic cotton, with 71% of thecotton they use being organic as of 2018. They’re aiming for a 2020 goal of 100%, showing how easy it is for standardization to allow for measurable change over a specific time period.
How to Begin Standardizing Sustainability Processes
Firstly, you will need to foster the right type of environment, where you can replicate a process to get actionable data. Companies and their suppliers need to be able to communicate effectively to do so, while working towards a common goal.
It can sometimes be difficult to get sub-suppliers to adhere to existing standards, so you will need to ensure that your viewpoints are aligned from the get-go. standardization is a good way to do so for multi-tier supply chains, as you will be able to measure exactly what’s going on. In the long run, standardization is also cost efficient, as you won’t have to start from the beginning each time once you have frameworks that are already put in pace.
A code of conduct is often used as a way to standardize sustainability processes, giving a clear indication of what a company is setting out to achieve. you will also be able to use actionable data to see whether you are hitting your current targets, as well as what could be improved in the future. If you haven’t done so, implementing a code of conduct will be extremely helpful. It also helps when facing potential issues, as you will have a clear framework for needs to be done if a situation does occur.
Existing standards can always be improved, but they’re a great building block for measuring sustainable change. This can be in terms of energy output, or switching to a new sustainable method with suppliers. You can look to sustainability software in this regard, or there are a number of professionals who can help to standardize sustainability processes.
Supply Chain standardization: Summary
A first step towards initiating a standardized supply chain can be achieved through reviewing existing processes and tools. The right software and automated actions can help to eliminate tedious manual work. For example data collection and reminders can be fully automated, freeing time for analyzing information and focusing more on taking action rather than, for example, chasing respondents. Supply chain standardization is likely to pay off in the long run, and that’s true for both buyers and suppliers. Establishing standardization in supply chain management allows all parties to reuse information shared between different stakeholders, saving a great deal of time.
There’s a reduced reputational risk, and customers are likely to be more loyal to your cause moving forward. It might be easier to conform to Sustainable Development Goals (SDGs) and other international standards, like widely used risk indices and other benchmarking activities, while also having numerous financial benefits to consider.
Streamlined processes should lead to more efficiency, and once they are set up, they will chug along in the background, helping to raise the overall effectiveness of any given task. You will also be on the same page throughout the levels of your supply chain, so you should see less pushback from suppliers that have to conform to your demands.
As companies like McDonalds and C&A have shown, the more you do, the easier it is to keep improving your supply chain standardization practices through constant refinement. It might seem daunting at first, but building a consensus between vendors and partners will help everyone become fluent in terms of what the business actually wants and needs. Having a standardized supply chain supports transparency and thus, helps to achieve a more responsible and sustainable supply chain.
To learn more about how to achieve a sustainable supply chain, read about our newest addition, Sustainable Sourcing Kickstart. It’s a standardized Worldfavor solution, allowing supply chain mapping and sustainability risk assessment - automated, and ready-to-use.