Supply Chain Automation and Transparency May Be Key to a Sustainable Supply Chain

Published : January 29, 2015

supply-chain-ideaA sustainable supply chain is one of the most critical aspirations for any business that hopes to achieve long-term success—impacting not just sourcing and fulfillment, but how customers perceive a brand as well. As a result, supply chain managers are continuously searching for effective strategies they can adopt to improve both the efficiency and sustainability of their supply chains.

Recently, supply chain experts have identified two key characteristics that may be the key to a sustainable supply chain: supply chain automation and transparency.

To maximize the effectiveness of the supply chain and improve profitability overall, companies should focus on these characteristics when considering any supply chain-related strategy— from the incorporation of vendor management best practices to the company's protocol for interaction with the media.

Transparency and the Ethical Supply Chain

Some companies view ethical operation as a desirable endeavor that is simply too expensive to pursue. However, according to Elementum, garnering an image as an ethical company can be incredibly rewarding in today's market.

Although the development of an ethical supply chain can raise overhead costs, it also gains the company long-term favor with consumers, which can more than make up for the added expense. In fact, recent surveys indicate that the average consumer would be willing to pay as much as 27 percent more for a product if he or she knows that the product was manufactured and distributed under fair working conditions. Consumers have also indicated that they would be willing to pay more for greener products, as well as products sold by companies that offered better workplace safety and educational opportunities to their employees.

To leverage consumers' interest in ethical brands and products, companies must keep ethics as a priority during all phases of the supply chain, from the solicitation of materials to the ultimate distribution of the product. For example, a process for vetting ethical suppliers should be combined with other vendor management best practices to ensure that each partner is both capable and in no danger of compromising the company's image through their own unethical operations.

Companies must also promote transparency so that consumers have all of the information they need to conclude that the company is strongly committed to the health of the environment, the safety and welfare of its employees and the quality of its products.

Automating for Improved Efficiency

Another key factor in the development of the sustainable supply chain is the automation of business processes—which allows companies to complete all business processes with both speed and precision. The use of automated processes can also decrease required warehouse space, improve customer service, reduce the company's carbon footprint and reduce the need for manual supervision throughout the supply chain.

Although automation may require some initial investment, the benefits are well worth this expense. BetaNews reports that automation:

  • Increases reliability
  • Improves standardization of products and services for more predictable results
  • Reduces inefficiencies and inconsistencies by addressing the root causes of these problems
  • Aligns easily with compliance initiatives and business rules

Building a Sustainable Supply Chain

Together, process automation and transparency can address some of the most significant supply chain obstacles faced by businesses today— including inefficiencies, inconsistencies and the environmental implications of the company's activities. Although both of these strategies may require an initial investment, they certainly can—and will— increase profitability in the long run.

Transparency and the pursuit of ethical operations improve the company's image and increase favor with consumers, while supply chain automation addresses inefficiencies, limits environmental concerns and reduces the company's expenses over time. So, the next time you’re considering any important protocol—whether developing your own vendor management best practices or instituting new shipping and packaging methods— investigate ways that you could be incorporating automation and transparency.

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Topics: Vendor Management

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