Best Practices for Promoting Resource Efficiency in Your Supply Chain

Effectively managing the supply chain is critical for all companies large and small. In yesterday’s Advisor, we discussed the growing importance of supply chain traceability. Today we’ll look at some proven best practices to encourage resource efficiency in your supply chain.

Communication and Collaboration

There are many challenges and barriers when trying to manage a supply chain network, but everything starts with communication and the willingness to collaborate. Best practices that have worked for companies include:

• Holding regular meetings with members of your supply chain to share resource efficiency priorities, success stories, and promote consistent practices for sharing information;
• Requesting or requiring first-tier suppliers to incorporate resource efficiency requirements or priorities into their agreements with lower-tier suppliers to encourage resource efficiency across the full life cycle; and
• Participating in forums for company-to-company interactions that occur outside of competitive environments.

Procurement Practices

Multiple requests for life cycle information from manufacturers can cause confusion and nonresponse or missed expectations across your supply chain. Best practices that have worked for companies include:

• Equipping and empowering procurement staff to engage with suppliers on sustainability topics so they can send a consistent message across your supply chain about the value of resource efficiency;
• Integrating resource efficiency requirements and product life cycle assessments (LCAs) into supplier contracts; and
• Offering workshops and training programs to help suppliers understand and comply with the standards or requests for life cycle information.

Convincing Decision Makers

It is often difficult to convince company decision makers of the benefits of resource efficiencies. From a business point of view, they are often focused on short-term costs and long-term value. Best practices that have worked for companies include:

• Documenting benefits and communicating successes;
• Conducting pilot programs as proofs of concept to help foster the decision to adopt new resource efficiency practices;
• Using media recognition to share information about successful programs; and
• Finding or developing tools such as a Balanced Organizational Scorecard to help in putting monetary value on environmental and social capital.

Building Resources

Small- and medium-sized businesses often lack the resources to fund resource efficiency efforts. Best practices to help your suppliers with funding include:

• Encouraging them to work with other small companies to share the services of a sustainability or resource efficiency professional;
• Researching funding opportunities from government, foundations, and environmentally responsible investment vehicles to build a strong monetary base to conduct resource efficiency programs; and
• Accessing government technical assistance to build internal expertise.

Identifying Social Impacts

Social impacts along the supply chain can be difficult to identify and may take significant time to address. Best practices that have worked for companies include:

• Understanding the culture and social environment of your supply chain before taking any action;
• Setting realistic targets for demonstrating and communicating progress on social impacts;
• Developing strong partnerships among companies, industry associations, and your supply chain; and
• Using data to inform and educate the public to help them in understanding the issues and ways to address social impacts.

Takeaway

Effectively managing your supply chain is critical to reduce your company’s overall impact on the environment and other aspects of society. It is important that the companies in your supply chain see the value of protecting and making efficient use of resources. It is equally important that they consider you a partner in resource efficiency efforts.