Three elements of sustainable supply chain management

Companies have strived for quality products and service improvement for decades. Companies are increasingly focusing on creating a more sustainable future by implementing sustainable supply chain management. Businesses that want to stay competitive in a rapidly changing world will need to ‘go green’. This is more than just a good idea for the environment. Although there have been many other options, GSCM is becoming more popular for businesses involved in manufacturing, distribution, and sales of goods.

Sustainable production and distribution are not new concepts. The old methods were not successful and often inefficient. This led to the search for new ways to improve supply chain management while increasing efficiency. Companies are now turning to GSCM for solutions to some of these problems. Although the idea may seem simple, implementation is not. It requires careful planning, communication, and a lot of experience.

The supply chain for petroleum is one area of GSCM that has been particularly relevant to companies who want to improve their manufacturing environments. The average North American company uses nine to ten suppliers for raw materials, machinery, and services in order to produce its finished products. Even worse, these companies are heavily involved in the oil industry and face substantial competition from suppliers willing to lower their costs or outsource certain manufacturing requirements.

Manufacturers need to find a solution that is both efficient and communicates well. Successful GSCM requires a lot of knowledge about the entire oil industry, as well as specific recommendations for each supplier. Many organizations have created standards for sustainable supply chains management to help deal with the complexity of the industry, including the Roundtable on Energy Strategies, the Roundtable on Environmental Management and the Basel II Basel Convention. These organizations claim that there are many policy frameworks. They include the reporting requirements for government agencies as well as the compliance requirements of different manufacturers and suppliers.

A feedback line with suppliers is another aspect of sustainable supply chain management. Manufacturers constantly evaluate the efficiency of their supply chain. It is a good idea to consult suppliers when a process is being developed or improved upon. This feedback channel of communication allows both the supplier and manufacturer to establish a more efficient process that will result in improved profitability.

Information systems are another aspect of sustainable supply chain management. They can be used to improve operational efficiency, reduce costs and streamline processes. Information technology systems, such as RFID software, allow manufacturers to track their inventory and make accurate inventories. This eliminates the need for expensive real-time tracking. This allows manufacturers to plan better for product growth, produce more efficiently and manage their raw materials effectively. Manufacturers can reduce waste by using greater accuracy and also benefit from economies of scale. Integrated systems provide real-time data feeds that streamline the process of receiving and organizing payments. This allows suppliers to ship their products faster.

Going green is the third aspect of sustainable supply chain. Going green is the process of reducing the environmental impact of supply chains. Companies that reduce their environmental footprint are more likely to win new customers as well as retain existing ones. Companies that go green can reduce waste and save money as well as reduce dependence on nonrenewable resources. They will also be able to improve energy efficiency and create a healthier workforce by using clean energy sources.

The White House Council of Advisors on Energy and Environmental Policy believes that improving the management of the supply chain will result in significant improvements in efficiency and effectiveness with which the U.S. creates and consumes energy and other resources. Creating jobs in American communities and increasing American competitiveness through a sustainable supply chain will lead to long-term prosperity. These benefits can be realized through increased economic growth, a decrease in greenhouse gas emissions, and a healthier populace.