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5 Critical Steps for Establishing Ethical and Sustainable Supply Chain

Apr 14, 2017

The pressure is on: ethical and sustainable supply chain has become critical to business success, and more and more businesses are scrambling to make sure their supply chains meet these new standards. Consumers are overwhelmingly beginning to favor businesses that are committed to environmental-friendliness, offer fair wages and labor, and who have demonstrated social responsibility. However, establishing an ethical, sustainable supply chain should be done in a careful series of steps, and involves research, communication, and commitment. Here are five of the most critical steps for establishing a sustainable supply chain:

Key Steps to Establish Sustainable Supply ChainContact US

Step 1: Identify your challenges

Start by laying out the supply chain and procurement challenges that your industry, your suppliers, and your business itself typically face. How have you overcome them in the past? What is the typical root cause of these issues? Once you’ve asked yourself these questions, you can identify areas of your supply chain that require improvement and special attention when working towards overall sustainability. This important step will also help you to evaluate the overall productivity and effectiveness of your current supply-chain setup and your supply chain management that will ultimately build up a sustainable supply chain.

Step2: Outline your supply chain

Trace the flow of your entire supply chain. You should also identify how information moves through your supply chain, and where your supplies and services are coming from. Take a look at the geographic locations of your suppliers and seek to understand major issues—political, humanitarian, environmental, etc.—in those regions. Evaluate your suppliers in terms of risk and location, and address any issues accordingly. For example, a supplier that exploits underpaid migrant workers is, clearly, not a good fit for a sustainable supply chain.


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Step 3: Collaborate

Engaging in supply chain collaboration with like-minded businesses and sustainable supply chain companies can help you to reduce waste, save money, establish ethical business practices, and decrease overall production time. It can also strengthen your reputation in your industry and increase business opportunities and profits.

Step 4: Ensure visibility

You should have the full picture of how your suppliers operate, who they hire, what their impact on the environment is, etc.—and your suppliers should be aware of your business practices as well. Communicate effectively, share an accurate image of your supply chain and processes, and make sure you all share the same vision and are committed to ethical and environmentally-friendly business operations. You should also make sure that your suppliers and partners reflect positively on your business and don’t contradict your business’s values and efforts. All individual employees, too, should be fully in the know about your business’s practices and your overall vision and goals. This will effectively help you have a sustainable supply chain.

Step 5: Demonstrate your commitment to your goals

It’s not enough to simply have a mission statement about how your business seeks to be ethical and sustainable—you have to practice what you preach. You can demonstrate your commitment to your stated goals by becoming involved with communities and charities that match your vision and being transparent with your customers about how your business operates and what your goals are. This will also result in increased customer loyalty, a better brand reputation and will help you build a sustainable supply chain.


To know how SpendEdge’s procurement intelligence solutions can help you establish a sustainable supply chain

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