These days, companies are increasingly taking longer, harder looks into their supply chains’ operations. And they’re doing that for very good reasons. They need to understand and manage the environmental and social impacts risks that lie there. As we’ve said before, today’s global supply chains are complex networks of companies linked together, for better or worse.
As a sustainability professional, you know that you need suppliers who can meet your company’s environmental and social expectations and requirements. Your suppliers are your partners in managing the impacts and risks associated with products in today’s global economy. So how do you know whether your partners are going to help or hinder your own sustainability efforts? Simple. Start a conversation with them. Sustainability professionals often speak of “supplier engagement” as a strategy, but when you get right down to it, it’s really all about open, direct communication. So start a conversation. It’s amazing what you can learn if you just start asking the right questions.
To get you started, here are three questions you should think about raising with your suppliers.
What you need to know: What do your suppliers know about their own supply chains?
Given the limited exposure most mid-sized (and smaller) companies have into their extended supply chain, chances are you don’t know much below the first tier (your direct suppliers). But those hidden entities are important players in your overall chain. And the place to begin getting visibility into and learning about lower-level supply chain participants is with your direct suppliers.
So ask your suppliers what they know about their own suppliers. Here are a few questions you might want to talk about with your suppliers:
- Have they identified all their first tier suppliers?
- Where are those suppliers located? Which countries?
- Where do any raw materials that go into the products come from?
- Have your suppliers ever asked any of their suppliers who they in turn are buying from?
What you need to know: How are your suppliers managing risk in their supply chain?
We’ve said it before, but it bears repeating: risk in the supply chain is shared by every participant. Your supplier’s risks can quickly become yours. And if you are taking steps to manage your risks, you need to know whether your suppliers understand theirs as well.
So ask your suppliers what steps they are taking to identify and mange their supply chain risks. Here are a few questions you might want to talk about with your suppliers:
- What does the suppliers know about the business, environmental and social risks that exist in the chain?
- What steps, if any, have they taken to manage and reduce those risks?
- Has the supplier developed a supplier code of conduct? If not, why not? And if so, how do they make sure that their suppliers are meeting its requirements?
What you need to know: Are your suppliers good product stewards? Are they taking a life cycle view of their products?
You probably already understand that in today’s market, every product represents the sum total of every material, resource and process that has gone into its production.
When you adopt a full, life cycle approach to any product, you necessarily think about and consider the nature and impacts of the product’s entire journey through the economy. Starting with the raw materials and natural resources that are used to create it, through the production and distribution phases, the use of the end product, and its eventual disposal (or rebirth) – all of it is embedded in the product you purchase. And product stewardship (taking responsibility to manage and minimize the environmental and social impacts of products) is shared among all the participants in the supply chain network.
Approaching product stewardship in this way can help you visualize where in your chain potential hotspots may lurk. It also creates an opportunity for collaboration among network participants, and allows innovation to emerge and flourish.
So ask your suppliers what they know about the life cycle of the products they sell. Here are a few questions you might want to talk about with your suppliers:
- What raw materials are used? Are they renewable?
- What resources are used during processing and manufacturing?
- What wastes or other by-products are created? How are they handled?
- What do the suppliers know about the working conditions in the processing facilities?
- How do the materials and products your suppliers use get to them?
There are at least dozens more questions you can, and should, discuss with your suppliers. But you get the idea. Start engaging by starting a conversation. Asking questions in an open, non-judgmental way is a great way to start a conversation!
Looking for more ways to think about the risks in your supply chain? Sustrana’s platform is filled with project suggestions, educational resources and materials to help you get a jump on managing your supply chain. Sign up for a free webinar to find out how Sustrana’s technology with resources, education, and guidance can help.