Outsourcing Drives Sustainability Requirements Into Supply Chains
July 27, 2011
The importance of outsourcing may be seen as a way of creating sustainability, which has taken a top priority in the corporate agenda. Keeping this in mind, consumers are driving business and maintaining a ‘green’ supply chain is a significant part of an enterprise.
A clear advantage of globalization is that transportation networks and universal information make it easy to obtain goods and services from any part of the world. As far as consumers are concerned, very few of them know where the original product was manufactured.
However, an awareness of environmentalism along with technology is changing all that. It is now an important part of ‘point of sale’ decision making to check embedded environmental footprint of a product. This is because the Internet puts this information out for consumers and it has become a valued part of product culture.
An example of this is the ‘salmonella scare’ associated with sea food exported from China, a few years ago. Another would be the contamination of toys with lead paint – also exported from China. Both these examples show the importance of the origin and intrinsic properties of a product playing a significant role in consumer action. this is exaggerated in outsourcing, since the host company is different from the location of where the product is made.
Interestingly, the Carbon Disclosure Project, showed that 86% of firms practicing sustainable procurement last year were able to benefit. this compares to 46% in 2009. Yet another reason for practicing sustainability is risk management. One clear risk emanating from the impact of climate change on the supply of natural resources reports outsourcingmagazine.co.uk.
Some of the recommended steps in green outsourcing include the following:
- Derive innovative policies from the environmental analysis
- Focus on vendors and service providers that deliver on the basis of environmental impact.
- Concentrate on the business and not the social value that green supply management produces.
- Equilibrate green supply chain objectives with business objectives.