One of the most complicated parts of a business can be its supply chain, which is made up of dozens or even hundreds of suppliers. As businesses try to be more socially and environmentally responsible, supply chains are often forgotten, even though they have huge effects.
But even when businesses think about how their supply chain affects the world, it can be hard to find a balance between being responsible and growing the economy. This article talks about a few ways to balance environmental and social responsibility in a supply chain with business growth. These include promoting transparency, sourcing in a responsible way, focusing on planning for demand, and making sure that everyone in the supply chain is planning well.
![](https://i0.wp.com/dropship-empire.com/wp-content/uploads/2023/05/How-To-Manage-Supply-Chains-In-An-Ethical-Way-And-Still-Grow.png?resize=704%2C704&ssl=1)
Help make things clear
The first way to increase economic growth while also taking care of the environment and people is to make your supply chain more visible.
A complex supply network can make it easy for a lot of information to get lost. By allowing clear communication and close supervision, businesses can not only make sure that ethical practices are followed at every stage, but they can also gain a competitive edge.
First, let’s talk about how being open helps people be more ethical and responsible for the environment. Most companies only know about about 7% of what is going on in their supply chain, according to research. This can make it easy to miss ethical or environmental violations.
A lack of transparency in the supply chain can not only lead to unsafe and unfair working conditions, but it can also cause environmental laws to be broken. By making your supply chain more visible, you can keep an eye on your suppliers and how they do business to make sure they are following your standards or international labor laws.
Your business can also save money and make more money by making itself more visible. When you know what’s happening when in your supply chain, you can find places where things aren’t working as well as they could and fix them. Having more information about what’s going on can also help cut down on costly disruptions.
Lack of transparency can also lead to recalls or scandals that hurt the reputation of a brand or even lead to legal action. In this way, transparency is also important for economic growth. If you don’t know what’s going on in your supply chain, you’re much more likely to have expensive ethical problems in the future.
Lastly, as your business grows, use transparency to make sure that growth doesn’t come at the cost of doing things in an ethical way. Efforts to grow a business should go hand in hand with being honest.
When adding new suppliers to an existing network, the value chain of each new supplier should be fully analyzed to make sure that safety, sustainability, and social measures are being taken.
Companies often use software for supply chain management and other technological tools to make things more clear. By doing this, companies will have more control over their suppliers and be able to clearly define and moderate ethical practices with little time and money.
Many companies also use supply chain software to make sure they follow a wide range of international fair labor standards.
Source Liability
Another way to make sure that economic growth is done in a responsible way is to buy from suppliers who are ethical and care about the environment. Responsible sourcing not only helps you reach your moral and environmental goals, but it can also help you avoid problems and build a loyal customer base.
First, make sure that the companies you buy from have fair working conditions so that your supply chain doesn’t break down and cost you money. Many companies think that they are not directly responsible for what their suppliers do, but they do have direct control over who they buy from and, by extension, what their social practices and responsibilities are.
This may seem like a big investment of time and money, but buying from suppliers who are ethically responsible can have big long-term benefits for a business.
For example, the Covid-19 pandemic showed how bad working conditions can cause big problems in the supply chain. Workers who are forced to work in factories that are too crowded and not safe structurally are very likely to get sick or hurt. This can stop production, which can have big effects on their supply chains.
When growing a business, try to find suppliers who are ethical and care about the community. Some of these may be more expensive than others, but if companies make small investments to reduce risks as much as possible, they can greatly improve their ability to deal with problems and problems that come up out of the blue.
Second, using materials that are good for the environment can also help cut costs. One part of responsible sourcing is using materials that are part of the circular economy. The circular economy is an economic system that reduces waste by promoting products that are made with reusable materials instead of materials that can only be used once.
Businesses can help the environment and save money in the long run by making goods that can be reused or are made from recycled materials. For example, a business that takes apart old electronics to reuse the precious metals inside is likely to save money over time on the cost of finding materials.
Lastly, buying things in a responsible way can also bring you more customers. Over 60% of young people today think about a company’s ethics before they buy something from them. Taking steps to be more ethical and care for the environment will help you become more popular with the next generation of consumers. This is a chance that very few companies can afford to miss.
Pay attention to demand planning
Waste is a big reason why supply chains aren’t sustainable. Even though companies and customers don’t always see it, wrongly planned production schedules can lead to a lot of waste from manufacturers. This also costs the business more than it needs to.
By using historical data to plan for future demand, companies can make their supply chains much more efficient while reducing waste and using fewer resources than they need to.
Scope 3 emissions, which include all of a company’s indirect effects on the climate throughout its value chain, are mostly caused by waste. Demand planning, which is often done with the help of AI technology, can help companies optimize their production schedules and cut waste by up to 65%.
As this improvement moves up the supply chain, less resources are used to make materials, less pollution is made during shipping and distribution, and less plastic is used for packaging.
AI is already being used by top companies in almost every industry to cut down on waste, which helps them reach their sustainability and economic goals. For example, supermarkets in the US and Europe have started using the AI tool Wasteless to predict retail needs and reduce food waste. With this tool, it’s thought that about $1 billion worth of food can be saved, and as a result, sales will go up in a similar way.
Even though AI is good at planning for demand, it will be most useful when it is used with human leadership and teamwork. For example, people must set priorities that machine learning can then act on.
Expect Changes
Supply chains are unpredictable, just like any other part of business. As the Covid-19 pandemic showed, large-scale problems can happen with little or no warning, and smaller problems can happen even faster. Careful monitoring of the supply chain can help predict, prevent, and prepare for changes and disruptions, making companies more resilient to things they can’t control.
Monitoring not only helps businesses get ready for changes, but it also helps them spot new patterns in the market, possible weak spots, and places where they can improve.
Sustainability and ethical responsibility standards change all the time, and businesses can keep up with these changes by keeping a close eye out for any mistakes or flaws.
Monitoring helps find flaws in production, but it also helps find flaws in ethical responsibility, like unfair treatment of workers, irresponsible waste disposal, and resource harvesting that isn’t sustainable. In the end, businesses have a lot to gain from keeping a close eye on every part of their supply chain.
Finding the right balance between business growth and ethical responsibility is a big job for a company, but the changing market makes it a must.
More and more customers want businesses to be responsible for how they affect the environment and society. Companies can improve their overall practices by improving their ethical initiatives and business growth. As more and more people want businesses to act ethically, businesses that want to be successful in the future must think about ethics in every part of their business.