New Inroads for Suppliers via Sustainable Supply Chain

Today’s economic environment has many companies reevaluating their supply chains. While some organizations are calling for price concessions from suppliers, leading sustainability businesses are forming stronger relationships with suppliers with aligned values.

The supply chain has become an avenue to create long-term sustainable value. Businesses are working with suppliers to refine their relationships and implement business sustainability concepts into every transaction.

As a sustainability consultant, we view these actions as a shift in supplier performance measures and a new wave of supply chain management. Business sustainability has become a top priority for business leaders and they are looking to their business partners to follow their lead.

According to Wal-Mart CEO Lee Scott, "Meeting social and environmental standards is not optional". The recently revealed Wal-Mart Supplier Agreement requires manufacturers to adhere to specific social and environmental criteria.

The leading business sustainability companies are implementing:

•    Supply Alliances: shifting from intermittent transactions towards longer-term relationships with sustainable business partners.

•    Integrated Supply: a sustainable flow of materials and services that are integrated into internal processes and aligned with material and quality standards.

•    Sustainable Product Quality Standards: business sustainability standards prevalent in material selection, manufacturing process and product packaging.

•    Supplier Commitments: suppliers have aligned value for meeting internal company business sustainability metrics, environmental law, and social expectations.

•    Supplier Compliance: companies work with business partners to meet specific sustainability targets and assist others that fail but are committed to make improvements over time.

This is a bold change from traditional cost-focused supply chain management. For many suppliers, it may alter the way they currently do business with their customers. However for those looking for inroads into traditionally unavailable markets, these new company expectations create an opportunity to differentiate themselves from the competition.

Companies will be able to use business sustainability as standard supplier performance criteria. Suppliers ready to implement sustainability concepts into their core business will now have a clear set of measures and a defined value opportunity.