Supply chains are made up of numerous relationships happening continually between buyers and suppliers. When there’s more than one level of manufacturers to produce a product or service, small adjustments can make a big difference to the environmental impact of your operations.
Supply chain sustainability at medium-to-large enterprises is never a walk in the park. When you factor in multiple tiers of suppliers and purchasing procedures based on ever-rising and falling levels of demand, the road quickly gets bumpy.
Complex supply chains make reporting complex
Many industries have complex multi-tier supply chains, which makes supply chain management a herculean task. Here are some examples:- Clothing and apparel. The typical clothing/apparel supply chains includes raw material suppliers and garment manufacturers (spinning, weaving, dyeing textiles) in liaison with production plants and local procurement agencies. Suppliers ship garments to product storage warehouses and distribution centers, from which they serve retailers close to the customers.
- Payments. Making card payments involves the shopper, the merchant or store owner, the payment service provider, the card processor, a merchant bank, a bank processor, a card schema like Visa or Mastercard, and the issuing card bank.
- Food. The supply chain required to prepare a meal in a restaurant involves six broad stages, including the sourcing of raw materials (harvesting), production, processing and packaging, shipping and storage, wholesale distribution, and retail redistribution to consumers via restaurants, bars and stores. This industry is perhaps the most complex multi-level supply chain today. And, with millions of restaurants, bars and cafes in the world, its environmental impact is considerable.
More than a third of all food is wasted
Globally, more than a third of all food that is produced is ultimately lost and/or wasted through inefficiencies in the supply chain. Whereas in developing economies, the bulk of lost food often occurs in the early stages of the supply chain, in mature ones, it is due to food that has been purchased and not eaten, then thrown away. This equates to around 63 million tons of food wasted annually in the U.S. alone.
From making relatively simple changes in supply ordering to better engaging staff, the food industry can reduce food waste while saving money. This involves monitoring and reporting potentially hundreds of different companies that play a vital role in bringing a product to life.
Boost multi-tier supply chain visibility
New digital services can help boost multi-tier supply chain visibility as they can handle large data sets and share them with all stakeholders. Visibility plays a vital role in multi-tier supply chains when it comes to sustainability because the interest in, and responsibility for, ensuring sustainable practices in supply chains has widened to regulators, consumers and other organizations.
Media attention is a force that’s urging everyone to consider the environmental impact of the products and services they buy and puts pressure on supply chains to improve visibility with easily accessible information and understandable requirements.
Suppliers’ sustainability and compliance information needs to be made readily available, using a globally recognized sustainability reporting framework. This will make the information directly accessible to interested parties, such as their customers or potential customers. Tools like ours offer suppliers an overview of the information different stakeholders request of them, what’s expected, and the ability to provide access to the data they need.
Want to know more about how your business can ensure transparency and sustainability in multi-tier supply chains?
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Related blog posts you might like:
- Transparency as an Enabler for Sustainability
- An Introduction to Sustainable Sourcing
- A Code of Conduct Can Supercharge Your Sustainable Sourcing
