4 Benefits of Leaner, More Sustainable Supply Chain Management

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supply chain management The efficiency of your supply chain determines how much money companies are spending on production costs.

By taking the time to reanalyze your supply chain to find areas where waste can be reduced and resources can be saved, you will end up lowering your costs and becoming more environmentally friendly. Here are 4 tips for doing just that.

Reduced Losses

Companies can develop new production methods that will help them reduce waste and speed up processes by dedicating management resources and modern technology towards creating a more sustainable supply chain. This begins with raw materials and component manufacturers and goes through to the end stages of retail shelves and end users.

When companies make a point to be more sustainable, they’re better able to reduce their losses and gain higher profits by better keeping track of the flow of materials, components, supplies, and information surrounding these things. This can help lower a company’s overhead costs significantly and can have several consequential benefits as a result.

Benefits of a More Sustainable SCM

The benefits of incorporating more sustainable supply chain management fall into a number of business categories, including lowering business costs, enhancing brand development, and appealing to a larger consumer audience. These can all have an overall positive effect on a company’s image, and help them remain relevant among their business competitors.

Better Financial Performance

When a company finds a more efficient way to create and package products that involves using fewer materials and less employee time, costs will drop because you’re cutting the need for excess materials and effort. Excess waste in a supply chain is often the result of the management team not constantly looking to innovate and improve their procedures.

Today’s globalized economy allows businesses to source the cheapest, most high-quality products, which can help them remain competitive with low prices. By using technology to keep track of data relating to the best and most affordable products, production managers can spot areas for improvement and opportunities that may help lower costs.

This is often an area that is overlooked because finding ways to cut costs is an initial investment without a lot of immediate return. However, by constantly looking for ways to innovate and stay ahead of the competition, companies can seize opportunities as soon as they arise.

Enhancing Your Brand

As sustainability becomes a more hot-topic issue, companies that prioritize a leaner and green supply chain will have the opportunity to market themselves as eco-conscious businesses. This helps show consumers that they care about the planet and all the people on it, and that their business leadership is willing to change business practices to invest in our planet.

In 2013, the number one priority among corporations was the ability to grow, the second was cost reduction, and the third was innovation. By incorporating sustainable business practices and working towards a more sustainable supply chain, companies can and are doing all three of these things. Consequently, companies that make an effort to be more sustainable enhance their brand image as they become associated with social responsibility efforts.

In order to switch to a leaner and more sustainable supply chain, you should start by developing a sustainability policy, that will preface to clients, employees and consumers what your intentions are. These policies often describe what your sustainability goals are from the beginning, and how you hope to accomplish them.

This gives employees and consumers an idea of what to expect from the company and will serve as a guide for how your company hopes to conduct itself going forward. It will also establish credibility for your company, and can help create a general understanding of the environmental and social issues that are important to your organization and the specific objectives you have regarding them.

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