The Importance and Opportunities for Enterprises to Implement Sustainable Supply Chain Practices - Essay Sample

Introduction

The issue of the environment and the role of different stakeholders have dominated many discussions platforms in the twenty-first century. Consumers are now more than ever weary of their role in taking care of the environment. As a result, green movements and environmental activism have a significant effect on the performance of many companies. As a result, organizations are moving towards a triple-bottom-line strategy that incorporates the environment as a business strategy. Previously, organizations have been taking care of their surroundings as a means of corporate social responsibility. However, with the increase in consumer concern over environmental sustainability, companies now incorporate the environment as a business strategy. Areas of interest include energy consumption, greenhouse gas emission, waste disposal, and wastage management (Zaid, Jaaron, & Bon 2018, p. 790). As a result, businesses are now concerned about business partners along the supply chain. Organizations want to ensure that their partners abide by their standards in regards to sustainability. Companies want to source for inputs from suppliers that have a sustainability strategy and distributors that abide by a given rule. Increased concern for sustainability strategies provides an opportunity to produce new products and services that are sustainable. Sustainability strategies are essential as the world is increasingly concerned about the environment. This paper discusses the importance of and opportunities for enterprises to implement sustainable supply chain practices.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Importance of Sustainability in the Supply Chain

Organizational sustainability refers to the commitment that the organization has towards economic, social, and environmental factors. These factors make up a company's tipple-bottom-line strategy (Gimenez, Sierra, Sancha, Rodon, & Markovic 2018, p.141). Sustainability in the business world has increasingly grown in importance due to numerous factors that associated organizations with the environment. According to Garza (2013), strategic level management considers environmental factors as the most critical issues in the twenty-first century. Regarding ecological issues as merely a form of social responsibility is a risky endeavor. The organization that ignores the issue of sustainability faces the risk of a backlash from the government and the public. People have become increasingly concerned with environmental issues. Customers increased knowledge, and ecological pressure continuously pushes organizations towards sustainable strategies (Luthra, Govindan, Kannan, Mangla, & Garg, 2017). One of the efficient ways to implement sustainability is through sustainable supplier selection processes. Through this approach, organizations look at the environmental costs, price, and quality of the product, as well as the safety of the supplier's systems.

Firms are increasingly incorporating green supply chain management strategies in their organizational strategy. According to Zaid, Jaaron, and Bon (2018 p.168), enterprises adopt green supply chain management due to the increased harm to the environment. Companies give particular importance to green supply chain management as it consists of a large share of the organization structure. Supply chain management touches on several segments of the organization structure. Hence, developing a green culture for supply chain management is a significant step in the development of a green organizational culture (Silvestre 2015, p. 4). Generally, green supply chain management is useful in environmental conservation. Firms use green supply chain management to ensure that they adhere to partners requirements. Most importantly, organizations employ green supply chain management as a means to promote environmental conservation. Green supply chain management incorporates environmental, social, and economic aspects. Hence, through chain strategies, companies can develop and maintain a sustainable and long-lasting competitive advantage.

The supply chain is an essential aspect of organizational culture. The practices and strategies of supply chain management must abide by the corporate culture. In other words, it must meet the organization's mission and vision statement. The mission statement sets out the company's commitment to sustainability (Silvestre 2015, p. 4). It is the first step towards setting up a sustainable organizational culture. Suppliers and distributors must adhere to strict practices that define their actions and standards of delivery. These exercises and criteria determine the corporate culture in terms of the supply chain. If the organization needs to incorporate sustainability in supply chain management, it is essential to make the practices sustainable. According to Galpin, Whittington, and Bell (2015 p. 4), to meet the customer's sustainability needs, a company must increase supply participation. The firm may also focus on sustainable inputs. A good example is sourcing for sustainable sources of energy supply. This move implies changing the suppliers to include sustainable suppliers.

Hence, sustainable supply chain management is necessary to avoid the risk of a backlash with the government and customers. But also, a sustainable supply chain management is meaningful to the business (Garza 2015, p. 25). The use of sustainable strategies can also be a means of reducing costs and increasing efficiency. Sustainability focuses on energy saving, emission reduction, waste reduction, and proper waste disposal. Sourcing products from suppliers that abide by the above goals ensure cost reduction and improved efficiency. A good example is the source of energy and carbon emitting inputs. Having an efficient energy supply is one of the goals of sustainable development. Having a suitable energy source also implies reduced costs of energy. For example, using renewable energy is in line with sustainable development. By so doing, the organization adheres to its triple-bottom-line and saves on cost.

In a nutshell, having a sustainable supply chain management has five significant benefits to an organization. Green supply chains reduce the risk of reputational damage. Garza (2015 p. 5) argued that sustainability helps an organization avoid a backlash with the customers and the government. Customers and other stakeholders continuously push for sustainable and responsible business practices that are mindful of the environment. Also, having a sustainable supply chain helps the organization to reduce its environmental impact and costs. Working with suppliers to minimize the impact on the environment contributes to the general organization's contribution to saving on costs. It also forces the suppliers to reduce their negative environmental impact. Some ecological effects can also affect the continuity of supply. Supply chain sustainability improves the continuity of supply of imported inputs (Gimenez et al., 2018, p.150). Global warming can reduce the number of specific factors of production including clean water. Reducing the environmental impact improves the continuity of supply for such inputs. Also, sustainable supply chains force suppliers to implement innovative products and services. Sustainable suppliers can help the organization by suggesting innovative measures to improve productivity. Hence, the sustainability of the supply chain contributes to strengthening the relationship between the business and its partners (Gimenez et al., 2018, p.150). It helps the firm to understand the supplier's needs and to work towards the achievement of those needs. Similarly, the suppliers understand the company's needs and work towards achieving its objectives.

Opportunities in Sustainable Supply Chain Management

Sustainability supply chain presents a vast array of business opportunities for existing and upcoming businesses. For existing businesses, sustainable supply chain provides the organizations with an opportunity to improve internal processes. Organizations have to develop affordable and sustainable procedures that adhere to their missions. The improved partnerships increase innovativeness and collaborations leading to enhanced methods (Silvestre 2015, p.160). Also, sustainability helps to improve supplier relationships and communications. Since an organization has to select sustainable suppliers, developing long-term relationships with the suppliers increases the chances of attaining sustainability. Having long-term relationships with suppliers increases the quality of production and the understanding between the partners. As a result, the company develops a high degree of consistency in quality and the possibility of a continuous reduction in cost. Improved relationships also lead to increased economies of scale and better terms of engagement Silvestre 2015, p.160). Preserving suppliers increases a company's competitiveness and bargaining power. Developing a long-lasting relationship with suppliers reduces the costs of production.

Also, the sustainability of the supply chain increases the organizations future market share. According to Garza (2015 p. 2), consumers have become increasingly concerned with environmental issues. The rise of green movements, activists, and non-governmental organizations increases the possibility of a new consumer group. Consumers that are wary of the importance of sustainability will be willing to pay an extra cost to acquire sustainable products. Hence, organizations can focus on supplying to this new customer group and increasing their profit margin. Through innovation and creativity, organizations will be able to develop products that are in line with the needs of sustainable consumers. Creating products for these new consumers creates room for market leadership and market differentiation. For example, consumers of healthy and organic products will eventually push companies to start investing along that line.

Developing a sustainable supply chain gives an organization the opportunity to innovate and create products that match such needs. Another possibility in this line is the chance to supply to upcoming green organizations (Zaid et al., 2018, p.970). Firms that are quick to develop sustainable supply chains have the opportunity to provide to new businesses. Also, the organizations will have an edge in the market over others. Another source of business is the link with non-governmental organizations that require sustainability as a prerequisite condition (Silvestre 2015, p.160). On top of that, firms will have the ability to maintain social goodwill or a functional organization image. The world is moving towards sustainability as a significant determinant of decision-making in society, government, political, and business worlds. Having a good standing with the different determinants of trends will give the organization an upper hand and increased bargaining power.

Conclusion

In conclusion, due to the increased damage to the environment, societies and governments have become increasingly concerned with different stakeholders' roles. As a result, organizations have no option but to incorporate sustainable business strategies that help reduce their contribution to environmental damage. The main purpose for organizational participation in sustainable development is cost reduction and avoidance of the risk of a backlash from stakeholders. Investors, consumers, government, partners, and even employees benefit from the effects of sustainability. Hence, companies have to maintain good relationships with the stakeholders by incorporating sustainable business strategies. Organizations have to reduce their impact on the environment by incorporating all their business partners. Green supply chain management strategies ensure adherence to...