How Supply Chain Management Is Adapting to Support Sustainability and Protect the Planet
With recent disruptions and deficiencies in consumer goods, particularly with personal protective equipment, our supply chain has garnered much attention since the onset of the pandemic. It has become clear that we need to pay more attention to our supply chains to ensure adequate supplies of quality goods.
A little investigated but increasingly important area of supply chain management is sustainable, environmentally friendly goods and services. Supply chains are complicated, industry-specific, and critically important for maintaining a steady supply of consumer products. With multiple criteria affecting costs, delivery speed, and quality, our systems must adapt and respond to stakeholder demand. One of those demands is increasingly becoming a desire for companies to maintain sustainable supply chains.
Sustainability in Supply Chains Offers Significant Advantages
Sustainable supply chains are good for the environment as well as the company’s bottom line and the advantages multiply as more links in the chain go green. Taking a holistic approach to managing the supplies that are used in manufacturing and other business models is critical to our environment and to a company’s social status among business partners and consumers.
According to WPI’s Business School Professor Joseph Sarkis, “As we critically analyze the advantages and disadvantages of supply chains, taking into account logistics and complexity, there are many tangible and intangible benefits of sustainable supply chains. There are five clear reasons that companies should want to embrace sustainability.”
COST SAVINGS | More efficient use of supplies leads to less waste and results in saving money by using fewer materials, so companies are not paying for what they are not using, and there is less need to dispose of waste, which can be expensive.
ADDITIONAL REVENUE | By finding alternative uses for leftover or waste materials, a company can generate additional revenue either through consumer sales or by supplying materials to another company.
BUSINESS CONTINUITY | As companies use up the world’s resources, at some point the planet will run out of a particular natural resource, at which point the business will no longer be sustainable. As an example, overfishing is jeopardizing that industry and if sustainability practices are not implemented, it will no longer be viable.
OPENS UP OPPORTUNITY | When it has good sustainability practices, a business may become more appealing to international markets that might otherwise not want to do business with that company if sustainability is not part of its operation.
INVESTOR RELATIONS | Sustainable operations provide companies with a good reputation that investors are more willing to consider as socially and fiscally responsible making them more likely to continue to financially support them.
Investing in Sustainability Is an Investment in the Future
Among the many facets of supply chain sustainability are considerations that ensure that your supplier has good sustainability practices, sourcing locally when possible, and purchasing from suppliers in disadvantaged communities to support their growth and diversity.
According to Sarkis, a world leader in sustainable supply chains, “There is a green supplier dilemma, those who are green are often large companies with more resources and who can more easily provide sustainably-sourced supplies. Those who are socially disadvantaged—and who are more often people of color and women—are underrepresented groups who have a harder time providing sustainable goods.”
For companies sourcing supplies, their dilemma includes whether to purchase from a more sustainable supply chain or to support these disadvantaged communities and by doing so, help them grow and evolve into greener businesses.
There are rarely unambiguous decisions in business. So, it is essential that critical thinking becomes part of the process. As Sarkis reminds his students, “With so many variables in play, it is important that business professionals consider the ramifications of the supply chain decisions they make and realize that the company and the planet are in this for the long haul.”
We must learn from our mistakes and understand that reducing the number of materials we use, known as degrowth and dematerialization, does not necessarily shrink profits or the economy. What it does is protect our planet’s resources and our organizational futures.
Bouncing Back: With Help, Nature Finds a Way
Businesses are increasingly aware that it is becoming more critical to be sustainable and to incorporate these practices as part of a company’s core values and a real-life lesson has accelerated this realization. Graduates of programs such as the Master’s in Operations and Supply Chain Analytics at WPI can prepare those wanting to lead in the industry.
An interesting thing happened when the coronavirus pandemic hit. As factories closed or reduced operations, as fewer people were on the roads, and as fewer planes were in the air, environmental changes began taking place. The world became a little quieter, the air a little cleaner, animals became more visible, and people noticed.
These welcome changes have opened our eyes to the impact that we have on our physical world. More companies are paying attention and students are embracing these challenges. These challenges are fundamental to one such course offered at WPI, Sustainable Supply Chain & Operations Management, which is offered as an elective and as part of a Certificate Program in Supply Chain Management.
The course provides students with an understanding of environmental practices and policies, their impact on business and the environment, and how supply chain management and its relationship to the natural environment can be successfully managed. Collaboration and cooperation with suppliers, customers, and other stakeholders that influence supply chain activities is explored through case studies to understand trade-offs.
In a recently published article, Sarkis notes, “I consider potential solutions, including green and sustainable supply chains, the circular economy, carbon mitigation, and degrowth to be opportunities. None are easy. The environmental sustainability problem is a ‘wicked’ one. The first step is that we have to educate ourselves, our organizations, and our communities on why and how to best achieve a more sustainable world.”
The WPI Business School is grounded in science, technology, engineering, and math (STEM) and integrates these elements into its graduate programs. Students receive a world-class education that prepares them to lead at the intersection of technology and business. A project-based approach to learning and doing informs our curriculum that considers the ethical and social context of everything we do. Our students take advantage of the university’s strong relationships with technology-intensive organizations around the world.