For businesses to continue to grow in today’s climate, a greater emphasis must be placed on ethical and sustainable practices
How organisations can use data to be green without compromising on performance – By Mark Morley
Organisations today are increasingly under pressure to seamlessly handle huge volumes of goods passing through their logistics network, while striving to mitigate costs and risks and meet new consumer expectations.
One relatively new and fast-growing expectation amongst consumers is around the need for organisations to operate sustainably. In fact, many consumers today expect brands to make an effort towards ethical and sustainable working practices before they consider doing business with an organisation.
According to an Accenture survey, more than half of consumers would pay more for sustainable products designed to be reused or recycled. This rings true with customers turning to brands that adopt sustainable practices, putting pressure on businesses to adopt a green approach.
While many businesses will address internal factors such as operations to be greener, there are other areas that have an impact, yet organisations have little visibility over – the activities of their partner and supplier network. Operating in a sustainable manner, inclusive of partners and suppliers, without compromising on performance or quality, is a substantial challenge, yet one that an increasing number of customers are expecting businesses to overcome.
Achieving an ethical and sustainable supply chain requires organisations to have full visibility across operations; the responsibility lies as much with the partner or supplier as it does with the business. Worryingly, many of the unethical practices that take place in an organisation’s supply chain occur without the brand’s knowledge.
The modern supply chainToday’s supply chain is more customer-facing than ever before, and many organisations are using it to drive business initiatives and improve customer experience. Consider a consumer who purchases something online: the product’s journey can be tracked by the customer as soon as the order is placed, all the way until the delivery is made.
A customer’s ability to know about the journey before the final fulfilment can become quite complex, including their potential awareness of components or raw materials sourced from multiple suppliers across multiple countries. If organisations can demonstrate a tightly controlled supply chain and an in-depth knowledge of its suppliers (and the working standards they follow), the modern socially-conscious customer would be more inclined to commit loyalty to that brand.
Given there is a detailed level of traceability and visibility now in play, organisations must ensure their entire supply chain is meeting customer expectations from a sustainability and ethical standpoint. With such a challenge on their hands, businesses must harness opportunities for collaboration and greater visibility across their network.
Defining the ethical supply chainPut simply, an ethical supply chain delivers the highest levels of ethical and sustainable operations. On average, an organisation’s supply chain contributes 5.5 times as many greenhouse gas emissions as its own operations.
With this in mind, organisations must work closely with their partner network to build an ethical supply chain. To achieve this, having the right technology in place – and a network that has bought into and exchanges data through it – is imperative.
Digitisation is key: technology is transforming the way the world works one industry at a time, and the transport and logistics industry is no different. To move towards an ethical supply chain, businesses should digitise and automate supply chain-based transactions with electronic data interchange (EDI) solutions. By doing so, businesses will experience reduced energy usage, greenhouse gas emissions, water consumption and solid waste. In my role at OpenText, I see customers digitise more than 26 billion transactions each year via EDI; this equates to almost 6 million trees saved.
Developing a trusted partner networkInformation is at the core of delivering a sustainable supply chain. Given the complex nature of a global supply chain, organisations need to have full visibility and transparency across all activities, from their employees to suppliers and trading partners. By having access to supplier information, including provenance of materials, environmental performance, and the ability to share it with customers, organisations ensure accountability across the entire supply chain.
Interestingly, 71% of organisations have a supplier code of conduct, but only half enforce the policy, revealing a disconnect between intent and action.
Businesses should look to establish a centralised repository or directory of suppliers and any associated information relating to their ethical and sustainable working practices. This directory will allow organisations to get a greater understanding of their partner network and how ethical their supply chain really is. In addition, it ensures accountability is maintained should any unethical practices occur. OpenText recently introduced our Global Partner Directory to help companies achieve this goal.
Delivering a truly ethical supply chainFor businesses to continue to grow in today’s climate, a greater emphasis must be placed on ethical and sustainable practices, extending to the supply chain. Customers will no longer allow organisations to pass blame, if the offender is part of an organisation’s supply chain network.
In order to deliver a truly ethical supply chain, the implementation of the right technology is paramount. Companies that continue to compete on price alone will quickly crumble, while the organisations that do ‘the right thing’ will prosper and develop long-term customers.
Mark Morley is the director of strategic product marketing and a manufacturing industry strategist at OpenText, a provider of enterprise information management (EIM) solutions which help companies simplify, transform and accelerate how information is used across their digital business