The tools, capabilities, and strategies companies must embrace to achieve the 4 goals of social supply chain sustainability.
Social supply chain sustainability is one of the three pillars of a sustainable supply chain and crucial for the long-term prospects of a company. As regulators tighten scrutiny and customers become ever more vocal about their expectations for the brands they invest in and champion, a socially sustainable supply chain is a must for any progressive company.
It is just as important for your company’s activities to be socially sustainable across the entire value chain as it is to be environmentally or economically sustainable. This guide will go over the digital solutions and strategies that any company can leverage to unlock the benefits that come with a socially sustainable supply chain.
The Need for Social Supply Chain Sustainability
More than ever before, globalization and the associated falling costs of manufacturing, transportation, and coordination present businesses with a tremendous opportunity to produce and deliver products and services at scale. However, this opportunity comes with the increasing demand from stakeholders — governments, investors, employees, consumers, and shareholders — to protect the rights and dignity of workers throughout the value chain.
Questions about labor exploitation are such hot-button issues across sectors and industries that no company can claim to be truly forward-thinking without serious reflection on these areas and how they may be affected.
Why Companies are Embracing Socially Responsible Supply Chain Management
An increasing number of companies and corporations are opting for socially sustainable supply chain management due to regulatory demands from government and pressure from stakeholders and the media. More than ever before, there is strong interest in scrutinizing a company’s track record in upholding and respecting the wellbeing of individuals along the entire value chain.
A socially responsible supply chain takes into account environmental, social, and good governance factors throughout the sourcing, manufacturing, and distribution process. Supply chains that are socially sustainable are crucial for the creation of value in these, as well as economic, areas. They enable companies to secure the long-term viability of their business and social license to operate.
Apart from current global policies, consumer sentiment is another major factor pushing the trend towards social sustainability. Consumers want to view the companies they patronize as an extension of themselves. As the balance of power between companies and consumers continues to tilt towards the latter, more and more companies are finding it valuable in the long term to adhere to the social responsibilities expected by their market.
Today, companies worldwide are expected to adhere to the United Nations Guiding Principles on Business and Human Rights (UNGPs), which outline how businesses and states should tailor their operations to meet three guiding principles:
- The state duty to protect human rights
- The corporate responsibility to respect human rights
- Access to remedy for victims of business-related abuses
Businesses are expected to take responsibility for making sure their operations uphold and protect human rights at every phase of the value chain, including any process which is outsourced.
The 4 Goals of Social Supply Chain Sustainability
There are several benefits to companies that opt to make their supply chains sustainable. All of them can be traced back to four fundamental factors that are the goals of pursuing social sustainability in the first place:
- Ensure adherence to proper labor, safety, and security standards
- Uphold the standards of fair trade and social equality
- Enrich lives across the globe through better delivery and availability of products
- Automate routine and mundane tasks
The more a company achieves these four goals, the more likely they are to enjoy the associated benefits, such as greater employee and customer loyalty, regulatory compliance, and social license to operate.
3 Strategies Required to Achieve Social Supply Chain Sustainability
Vetting the social sustainability of your supply chain without the right technology is a Sisyphean task. That’s why the digital infrastructure that makes this possible is so important. To achieve the four goals of supply chain sustainability, you will need to have these capabilities:
- Use supply chain and measurement solutions to track activity and progress
Digital supply chain management solutions help aggregate the real-time data needed to have a clear view of the conditions and activities of the partners involved in making your company tick. Safety standards and performance indicators pertaining to their processes can be assessed digitally to know exactly how many hours are going into the present output of the company. This also lets you forecast whether better results can be expected without the need for additional human resources or automation.
The right solution makes it easy for companies to adhere to the social commitments by which they define their brands, such as adherence to proper labor, safety, and security standards.
- Trace and monitor sourcing and collaborate with other sustainable suppliers
Traceability empowers businesses to align themselves with consumer demand for transparent practices across the entire value chain. Monitoring the sourcing of raw materials and other input flowing into the supply chain makes it easy for global companies to comply with regulations concerning the movement of goods and services across and within borders.
Companies willing to invest in tools and strategies that give them visibility into the supply chain are able to make strategic choices about supply, sourcing, and partnerships that allow them to be confident in their products from their sources to the consumer. Thus, they attain the goal of enriching lives through better delivery and availability of products as well as upholding standards of fair trade and social equity.
- Maintain accountability along the entire length of the value chain
Companies need to secure buy-in from all those involved in their operations in order to establish the possibility of personal and company-wide accountability. Processes that ensure accountability include routine audits, progress reports, and software that tracks impact and customer-facing goals. Operating in this fashion merges a company’s economic interests with its social commitments, leaving all the stakeholders better off.
Logility Provides the Platform to Empower Social Supply Chain Sustainability
As the world takes supply chain sustainability more seriously, companies with more comprehensive solutions will stand out. The Logility Digital Supply Chain Platform, with its innovative blend of artificial intelligence and advanced analytics, can help your company get that much-needed edge through automated planning, accelerated cycle times, increased precision, improved operating performance, and greater visibility across the entirety of the supply chain. Reach out to Logility today to learn more.