As the world becomes more conscious of the impact of human activities on the environment, businesses are looking to improve their sustainability performance. While companies can take steps such as reducing energy consumption and waste, a crucial factor in achieving sustainability goals is through their supply chain. At Catalyst Sourcing, the best India Sourcing Company, we understand the need for change. Let us help you explore essential steps to improve your sustainability performance through their supply chain.
Step 1: Determine your sustainability strategy
One of the critical steps to improving sustainability performance through the supply chain is to set your sustainability strategy. It involves defining what sustainability means to your business, identifying areas for improvement and prioritizing sustainability in procurement decisions. The sustainability strategy should align with the values, mission, and vision of your business as well as regulatory requirements.
Step 2: Involve your procurement function from the beginning
To ensure the development and implementation of your sustainability strategy, involve your procurement function from the outset. The procurement function plays a critical role in making procurement decisions that meet sustainability goals. As such, your procurement team should understand and participate in the development of your sustainability strategy. This will enable them to incorporate sustainability considerations used in the assessment of suppliers when making procurement decisions.
Step 3: Give your Procurement Team the right knowledge and tools
Sustainability may not be a priority for all suppliers and therefore requires an understanding of supplier management, monitoring, and evaluation. The procurement teams must be trained to include sustainability considerations in their decision-making processes. This training can include methods of assessing suppliers’ sustainability, compliance with environmental regulations, and other relevant social issues affecting the global community.
Top Supplier management companies in India have also been catering to this by providing training and support for better supplier management.
Step 4: Segment your suppliers
Once you have trained your procurement team on sustainable procurement practices, it’s necessary to segment your suppliers according to their sustainability performance. Segmentation allows for the identification of high-risk suppliers who require more attention than those who meet sustainability requirements. High-risk suppliers include those who violate environmental regulations, have substandard working conditions, or engage in unsustainable resource use practices.
Step 5: Measure and communicate your results
Suppliers should be assessed for compliance and given feedback to ensure that sustainability requirements are met. It’s necessary to measure the performance of suppliers against the sustainability goals established in the sustainability strategy. You can provide feedback to suppliers through a range of channels to communicate the results of performance evaluations. This feedback can include both positive and negative results. Performance results should be communicated regularly to ensure transparency and continuous improvement.
The Bottom Line
While it’s tempting to view sustainability initiatives as a top-down approach, it’s critical to recognize that they often fail when there is a disconnection between the boardroom and operations. The procurement function, in particular, is essential in ensuring that sustainability initiatives are integrated throughout all aspects of the organization. To effectively deliver on sustainability objectives, organizations must ensure that the procurement function is equipped with the necessary knowledge and tools.
In conclusion, improving sustainability performance through the supply chain involves developing a sustainability strategy, involving the procurement function from the outset, equipping the procurement team with the necessary knowledge and tools, segmenting suppliers, and measuring and communicating results. These steps enable companies to promote a more sustainable supply chain by encouraging suppliers to adopt sustainable practices and reduce their environmental footprint.
By engaging the right India Sourcing Company, businesses can achieve better results, streamline their processes and make their business more sustainable. If you are planning to choose a Global Sourcing Company that can help you with sustainable supply chain management, connect with Catalyst Sourcing. We are here to help!
