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Sustainable Supply Chain Management

Procurement 201 Supplier Risk 201 Sustainable Supply Chain Management

A green supply chain “considers environmental impacts on its operations and takes action along the supply chain to comply with environmental safety regulations and communicate this to customers and partners.” (APICS Dictionary, 16th edition). It requires the alignment of the various stages of the supply chain for a product or service, including procurement, manufacturing, distribution and transportation, in order to reduce the supply chain’s impact on the environment. Overall, it is intended to promote the development of sustainable practices for products, materials and processes through organizational and supply chain activities.Enter your text here...

Benefits of a Sustainable Supply Chain

Why is sustainability relevant to supply chains? Watch the short video to learn more about why some business would want to undertake sustainability projects, even if they are skeptical.

The following are some of the considerations and benefits for organizations undertaking a sustainability initiative:

  • Regulations: There are many worldwide governmental and industry regulations that now require companies to be compliant with both environmental and social standards, or face penalties and fines.
  • Financial Impacts: Sustainable practices can often lead to cost savings and enhanced revenues and profits.  Examples of ways in which investing in sustainability efforts has resulted in savings include:
                               ◦ Improved efficiency resulting in reductions in electricity, fuel and water consumption and overall costs                  
                               ◦ Reduction of waste from products, services and processes leading to greater efficiency and lower cost
                               ◦ Reductions in amounts of hazardous or toxic chemicals to use or dispose of reducing insurance rates, disposal and treatment expenses, and legal liability

  • Environmental and Social Impacts and Benefits: Some social impacts and benefits of incorporating sustainable practices include:

                 ◦ Increased conservation and preservation of scarce or non-renewable natural resources
                 ◦ Reductions in harmful impacts of air and water pollution, waste and hazardous substances
                 ◦ Ethical standards and practices that are maintained amongst all stakeholders
                  ◦ Promotion of employee development, diversity and empowerment


  • Competitive Advantage: Companies engaging in sustainable practices have an increased chance of survival due to better community relations and access to new supply chain solutions.
    ◦ Development of new profitable products and alliances because of improved stakeholder, customer and supplier relations and intelligence
    ◦ Longer tenure and increased attraction of high-quality workers due to company reputation, values and focus
    ◦ Ability to be competitive by offering desirable products and services, drive increased demand and generate additional sales because of consumer support for sustainability
  • Improved Reputation and Brand Protection:Because consumers are more sensitive to environmental and societal practices, companies who engage in sustainable practices will likely benefit from improved reputation and brand awareness.
  • Improved Relations with Communities and Governments: Likewise, companies who use proactive, responsible and, ethical approaches might also benefit from improved relations with local communities and worldwide governments.
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