Supplier Engagement Enhances Supply Chain Sustainability Efforts

In recent years, heightened focus on sustainability has prompted significant changes in supply chain practices. A recent report by The Sustainability Consortium (TSC) reveals that 40% of the 2,000 suppliers surveyed have improved their sustainability scores, reflecting a growing commitment to more sustainable business models. This article examines the steps being taken to enhance supply chain sustainability and the role of supplier engagement in these efforts.

Improving Supplier Engagement and Data Collection

Supplier engagement has become a crucial element in the pursuit of sustainability within supply chains. TSC's latest report highlights that many suppliers have developed data collection systems to better assess and address their environmental and social impacts. Despite this progress, 40% of suppliers reported being unable to respond to sustainability surveys due to a lack of data, although they plan to develop data collection capabilities in the future. This indicates a momentum toward more sustainable business models and increased transparency, which in turn, helps identify areas for improvement.

“Momentum for sustainable business models is gaining, and increased transparency identifies improvement opportunities.”

The heightened focus on transparency in supply chains is not new. TSC’s first Impact Report, published in 2016 and vetted by over 100 stakeholders, set the precedent for these efforts by covering both environmental and social impacts. The subsequent 2017 report expanded on this by including online case studies, further emphasizing the importance of transparency in driving sustainability.

Technological Advancements: The Role of Drones

Technological innovations are playing a pivotal role in transforming supply chains. Drones, in particular, are revolutionizing air cargo sustainability in the logistics industry. Their increased use in air cargo transportation is boosting efficiency and significantly reducing carbon emissions. Drones are being deployed to deliver goods to a wide range of retailers, including grocery stores, home centers, hardware stores, home furnishings, hospitality, specialty, and sporting goods/outdoors retailers.

The integration of drone technology is not limited to retail; it also benefits consumer product suppliers, analysts, consultants, solution providers, students, faculty, and other non-retail entities. By contributing to a more sustainable and environmentally friendly supply chain, drones are helping to decrease delivery times and increase operational efficiency. Companies are investing in drone technology as a means to enhance their sustainability efforts and mitigate environmental impacts.

Moreover, drones have the potential to revolutionize last-mile delivery, particularly in remote or hard-to-reach areas. However, the widespread adoption of drone technology in supply chains does face regulatory challenges. Regulations are being developed to ensure that drone use in air cargo transportation complies with safety and aviation standards.

Blockchain and Multi-tier Transparency

Another technological advancement that is enhancing supply chain sustainability is blockchain. This decentralized system provides permanent records of product journeys, ensuring data integrity and enhancing supply chain security, especially when integrated with the Internet of Things (IoT). Blockchain technology tackles issues such as labor exploitation and environmental destruction by verifying ethical sourcing across industries.

Despite the potential of blockchain, a significant challenge remains: only 45% of supply chain leaders have visibility into their first-tier suppliers, and a mere 7% achieve transparency across multiple tiers. This lack of multi-tier transparency underscores the need for more comprehensive data collection and sharing systems, which blockchain can facilitate.

Notably, industry giants like Walmart and Maersk are leveraging blockchain technology to certify their supply chains, demonstrating the technology's capability to provide reliable and secure supply chain certification.

The Path Forward: Challenges and Opportunities

As the push for supply chain sustainability gains momentum, various challenges and opportunities present themselves. The need for improved data collection and supplier engagement is clear, as is the potential for technological solutions such as drones and blockchain to drive significant improvements in sustainability practices.

While technological advancements offer promising pathways to enhance sustainability, achieving comprehensive transparency and ethical sourcing across all tiers of the supply chain remains a formidable challenge. As companies continue to invest in these technologies, the development of robust regulatory frameworks will be vital to ensure that these innovations are applied safely and effectively.

In conclusion, the pursuit of sustainability in supply chains requires a concerted effort from all stakeholders, with supplier engagement and technology playing pivotal roles. By embracing these advancements and addressing existing challenges, the supply chain industry can move towards a more sustainable and transparent future.