Strategic Sourceror on Thursday, January 9, 2014, Strategicsourceror.com
Having a sustainable supplier network is now a near-universal goal among companies – but so far, getting there hasn’t been easy.
A recent conference at the Massachusetts Institute of Technology Center for Transportation and Logistics (MIT CTL) addressed the problem of sustainable product sourcing among contemporary businesses. According to a report from the organization, one of the key issues that arose was the problem of supplier transparency. Full visibility into the distribution supply chain is essential for companies making a real effort to boost sustainability, but in practice, firms are finding it extremely difficult to attain this level of clarity with all of their business partners.
“Companies increasingly need greater supply chain visibility to understand environmental impacts and risks, and to protect themselves and improve their environmental standing. Many enterprises at the event have good visibility into tier-one suppliers, but very limited contact or knowledge when it comes to tier two, three or deeper suppliers,” the MIT CTL stated.
Some companies have made an effort to provide easier solutions to this problem by instituting certification or partnership programs in which companies agree to abide by a set of guiding principles and sustainable practices. A recent example of such an initiative is the Cotton LEADS program, an inter-corporation agreement to move toward environmentally friendly farming practices in the textile industry. The program currently boasts a roster of 30 companies, and many of these are major firms within the sector, including Fruit of the Loom. Overall, Cotton LEADS-compliant companies account for 17 percent of global cotton production.
The advantage of such a program is that it gives businesses a clearer understanding of what companies they can align themselves with. A sustainability-minded cotton manufacturer might choose a supplier in the Cotton LEADS network over one that doesn’t comply with the agreement, because the program serves as an assurance that participating companies are committed to sustainability.