The importance of SSCM for your business

Sustainable Supply Chain Management (SSCM) is defined in today’s globalized economy as management of our supply base to drive affordability and innovation through social responsibility and environmental stewardship, outsourcing business operations but not responsibilities or risk. It promotes ethics, safety, and human rights while managing the supply systems, processes and practices. Leading companies understand that they have a role to play throughout the lifecycle of their products and services.

Internationally, SSCM is becoming an increasingly important issue specifically and systematically addressed by companies of all sizes. It is intimate related to Business Social Responsibility (BSR) as it basically depends on corporate behavior, governance and transparency in key social, environmental and business areas. SSCM is key to maintaining the integrity of a brand, ensuring business endurance and managing operational costs. It is about considering the larger impact of company actions on all the involved parties, ensuring that companies do business responsibly, taking a leadership position in environmental, community and social issues.

Through SSCM, companies take care of the long-term viability of their business and secure a social license to operate, by properly managing the flow of their goods and services. Every company has the responsibility to respect human rights during every step of the supply chain process and throughout the lifecycle of their products and services. The basic concept companies should bury in mind is that at every stage in the life-cycle of specific products there are social and environmental consequences, or externalities, on the environment and on people, that should be reduced to the minimum.

Why is SSCM important?

There are numerous reasons why companies should apply the SSCM principles. The main reason among all is to guarantee compliance with laws and regulations and to adhere to and support international principles for sustainable business conduct. Another reason why every business involved with the supply chain should take SSCM into account is that companies are increasingly taking actions that result in better social, environmental and economic impacts because there are business benefits to doing so and society expects it. By managing and seeking to improve social, environmental and economic performance and good governance throughout supply chains, companies should act in their own interests, the interests of their stakeholders and the interests of society at large.

market for honey_david kiger_Sustainable Supply Chain Management
Image courtesy of Nestlé at Flickr.com

Businesses should always strive to implement international labour standards within their supply chains, including the right to freely chose employment, the freedom of children from labour, freedom from discrimination and the freedom of association and collective bargaining. The rights of all peoples to work in safe and healthy conditions are critically important as well. SSCM also addresses to promote a broad range of human rights such as gender equality and access to education and health.

SSCM is progressively more recognized as a key component of corporate responsibility. Managing the environmental, social and economic impacts of supply chains, and combating corruption, makes good business sense as well as being the right thing to do. Nevertheless, supply chains consist of continuously evolving markets and relationships. In order to give some fundamental information related to SSCM, we offer a few baseline concepts below:

#1: SSCM Environmental Impacts:

Environmental impacts from supply chains are often severe, price pressures are significant and natural resources are perceived to be abundant, when sometimes they are not. These impacts can include toxic waste, water pollution, biodiversity loss, deforestation and long term damage to ecosystems as well as high greenhouse gas emissions and energy use.

As knowledge relating to environmental damage increases, the pressure to change the ways in which organizations behave also has increased – particularly amongst the manufacturing, mining and resources sectors. Companies should engage with suppliers to improve environmental impacts, by applying the precautionary approach, promoting greater environmental responsibility and the usage of clean technologies. They can also develop an environmental purchasing policy that aims to reduce the environmental impact of their own and their suppliers’ activities, goods and services.

#2: A SSCM Anti- Corruption Policy

The significant corruption risks in the supply chain include procurement fraud and suppliers who engage in corrupt practices involving governments. The direct costs of this corruption are considerable, including product quality, but are often dwarfed by indirect costs related to management time and resources spent dealing with issues such as legal liability and damage to a company’s reputation. Companies that engage with their supply chains through meaningful anti-corruption programs can improve product quality, reduce fraud and related costs, enhance their reputations for honest business conduct, improve the environment for business and create a more sustainable platform for future growth.

#3: SSCM respect for Human Rights

Human rights in the supply chain, include a range of complex issues, such as: slavery, child labour, bonded labour, freedom of association, working conditions and wages, exploitation and nondiscrimination. SSCM in this basic aspect means to give equal opportunities to every one without addressing acts of discrimination on the basis of race, sex, religion, sexual orientation, disability and age.

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