Building an Ethical Supply Chain

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Consumers are increasingly interested in how their products are sourced and produced. Both social media and traditional media channels deliver a continual stream of consumer concerns about equitable labor practices, climate change, and many other social, political, and environmental considerations. In the past, supply chains existed within a more hidden framework.

But the age of Big Data has brought about a shift toward greater transparency. And with greater transparency, of course, comes more intense scrutiny of your company’s social responsibility. This applies to every area of business, and the supply chain is no exception.

As climate change and social and environmental issues continue to be major focal points for consumers and companies alike, many businesses are exploring ways to reduce waste throughout the supply chain, focusing on recycling and reuse initiatives. Zero-waste efforts have also become more and more popular, as industry giants like Ikea and Unilever begin to implement plans for eliminating the waste created throughout production.

Today, many consumers expect enterprises to do exactly what the customer would do when they discover an entity is, say, working with child labor or supporting poor working conditions for employees: remove the intentional or unintentional support by refusing to transact with that particular supply chain partner.

Achieving an Ethical Supply Chain

The creation of new green or socially responsible techniques and technologies is not the sole responsibility of academic institutions or governments. Research and development within the supply chain realm should include exploration into new methods and best practices for environmental and social sustainability. Meanwhile, existing technologies, such as sensors, blockchain, machine learning, and artificial intelligence (AI) can bootstrap innovation for reducing harmful emissions and removing redundancies that increase energy consumption.

Establishing a reputation for an ethical supply chain can also help in addressing the widening skills gap; the younger generations seek out workplaces with solid social and environmental responsibility plans in place, and shaping your company identity around smart, sustainable supply chain practices can put you on the map as a forward-thinking industry leader.

It really all comes down to whether you want to invest the time and money into being a leader in your field. Take the time to regularly review and update contracts for conduct agreements, and make sure that you have dedicated resources set aside for exploring opportunities to reduce waste. As industry expectations shift and evolve, largely in response to consumers’ expectations and desires regarding sustainability and social responsibility, it’s crucial to keep abreast of new trends and assess how competitors are shaping more ethical supply chains.

And finally, take the time to conduct regular reviews of international labor laws and climate change regulations. Don’t waste time with supply chain partners that could imperil your reputation, as these partners will likely end up costing you in lost time and money as well.

Creating a Plan of Action

Ethical supply chains are achievable, but they will not come without some short-term pain points. The long-term positive impact, though — for employees, consumers, and the planet — makes it well worth the effort. 


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