Building a Sustainable Supply Chain: Keys to Creating an Ethical Process
As consumers, we can easily see and understand the sustainable process of food and beverage companies. For example, fair trade coffee is becoming increasingly popular as consumers become more knowledgeable of labor exploitation. The buyers’ dedication to the cause has made them willing to pay more for a product that is created respectfully and honorably.
So for a supplier to boost sales, it is important to create a strategic marketing plan that helps humanize the supply chain in a way that makes sense to the consumer. Direct-to-consumer companies are often used as examples of how ethical and sustainable supply chains can bolster financial success. But manufacturers often find it more difficult to convince their clients – and, by extension, the end customer – that their sustainable methods are truly legitimate, and are not just a response to a marketing trend.
In the paperboard industry, we find it especially difficult to convince consumers of our ethical practices. Many people still believe that paperboard and other paper products are sourced by clear-cutting trees and depleting natural resources. In reality, we are committed to sourcing only from sustainably managed forest land and tree farms, where resources are harvested and replanted much like any other supply crop. To be seen as a truly sustainable manufacturer, we must clearly demonstrate our methods to the masses, which can be challenging because our supply chain is fairly complex, involving a vast number of suppliers and processes.
This challenge is not unique to paperboard packaging. Many manufacturers struggle to implement sustainability practices and communicate their results due to the sheer size of their supplier networks. It just isn’t as easy to quickly implement effective and transparent improvements. However, there are steps that your organization can take to build a sustainable supply chain that will have a positive impact on you, your network, your clients and consumers – and our planet.
Process and Operations Considerations
Although many believe that procurement precludes sustainability, you must start by closely reviewing your procurement process. It is extremely important in building a sustainable business. As the first building block of your process, procurement will present potential areas for improvement as you develop a deeper understanding of your raw materials.
For example, after assessing our procurement process, Proteus identified bar code scanning as a faster, more accurate way to track and audit our paperboard materials. We also implemented a policy around North American sourcing after identifying that some of our suppliers on other continents were attempting to switch their raw material streams without notifying us. After reviewing our procurement process, our new process allows us to be certain that all of our North American material sources are reliable. This type of process improvement increases internal and external confidence in the quality of your products. By becoming more transparent about these types of changes, you can also improve the level of trust your purchasers and suppliers have in your supply chain.
Procurement tracking helps create this transparency by removing mystery and allowing you to easily prove the details of your process and product quality. In our industry, creating paperboard packaging can be an extremely wasteful process – or at least that’s the misperception clients and consumers have of our business. In reality, analytics and control numbers from procurement tracking can be used to trace materials back to the source. This allows us to prove that a material’s origins are not from a controversial source, which not only helps prove the sustainability of our supply chain, but also offers supporting data in the event of a recall. Through procurement tracking and assessment, we can quickly and easily demonstrate that our partners and practices are fully sustainable and take corrective action if there’s an issue.
Sustainability and good business practices do not need to be mutually exclusive. Closely monitoring the procurement processes in your supply chain is good business – not only does it provide proof of sustainable practices, but it can also create a much more robust system throughout your business which, once established, can help drive profitability. A well-managed procurement process offers a host of benefits, from reduced transportation and material costs to increased efficiency.
To maximize the results of your improved procurement process, it is important to effectively monitor performance. This can seem like a daunting task, but it is important for you to manage this process – you should not rely on suppliers to self-audit. By ensuring your supply chain is hitting the standards you set, you can back up your sustainability claims and once again be more transparent with clients and consumers. Auditing not only provides transparency, but it forces your suppliers to align with your desired practices and helps identify any potential problem areas. If sustainability is really an integral part of your organization, up the ante even more by engaging a third-party, not-for-profit auditor.
In the paperboard industry, our prospective clients often request our audit results. They want to know exactly where our materials are coming from – especially in the pharmaceutical industry where chemical migration into products is a big concern. Our clients want to know we can be trusted, and by giving them a third-party assessment, we can eliminate any doubt from the outset. The cost of a thorough auditing process may seem exorbitant in the short-term, but the long-term benefits of a well-implemented and monitored process will always pay off in the long run.