View all Events

Supply Chain Sustainability

December 22, 2022
 

The Importance of Practicing More Sustainably

By Catherine Haub

Consumers are focusing on purchasing sustainably, indicated by a recent study from IBM found that 80% stated that sustainability is important to them and 60% would change shopping habits to reduce environmental impact [1]. They are also looking into how the company operates, which was evident when Apple was exposed for having poor working conditions in their Chinese factories since their profits decreased [2]. Due to this, companies cannot just claim their operations are sustainable but need to be transparent about their operations, including the environmental, social, and economic impacts of operations along with their vendors [3]. Companies look at the way they and their suppliers do business to find ways to create a more sustainable supply chain.


When looking to increase supply chain sustainability, a company cannot just look at operations from an environmental standpoint but also from social and economic standpoints [4]. This would include looking at the entire manufacturing process beginning with where and how raw materials are obtained, the whole process of making the product, and ending with how the product is used and ultimately disposed of [3]. From an environmental standpoint, this would include ensuring products are recyclable, sourced responsibly, and production does not negatively impact the environment. From a social point of view, this would mean treating employees fairly by creating a safe working environment and not overworking employees. There are things companies can do to work towards creating a more sustainable supply chain, and one would be to find sustainability issues within the supply chain [4]. This is important as a company can know which areas need changes and can create a plan to do so. Companies should also encourage their suppliers to adopt similar sustainability goals and practices to ensure all parties in the manufacturing process are practicing sustainably [4]. At Placon, we can help companies create a sustainable supply chain since we make packaging that contains recycled material, reducing greenhouse gas emissions that would have come from making new material.
Creating a more sustainable supply chain is beneficial for a company from a reputational and financial point of view. With the growth of the internet, scandals aren’t as hidable as they were previously, making it harder to hide them. Back in 2020, Starbucks and Nespresso received backlash for having child labor and low wages on the coffee bean farms that they got their supply from, upsetting many consumers [5]. The companies launched their investigations to find which farms this was occurring on, but the news still damaged their reputation. As larger companies are looking to make more sustainable moves, they will be relying on their suppliers to do the same, meaning they are more likely to choose a supplier who practices sustainably. A company won’t want to work with a supplier if they know they’re practicing unsustainably as Starbucks and Nespresso did. If a supplier can prove their sustainability credentials, there is a higher chance of obtaining more business and creating new partnerships [2]. This could greatly benefit the company as it would be generating more revenue.
Sustainability has become more important to consumers making it equally important to producers. Companies are likely going to be stricter on supply chain sustainability with suppliers, which is evident with Wal-Marts Project Gigaton as they rely on their suppliers to act responsibly and is helping them do so. Other larger companies should help suppliers practice more sustainably, like Wal-Mart, to not only help the planet now but ensure its safety for future generations [4]. Companies should be looking to make sustainable changes in the supply chain, not only to better themselves and their suppliers but the planet.

[1] What is supply chain sustainability? – IBM Supply Chain: IBM Supply Chain Blog

[2] Five benefits of a sustainable supply chain – Supply Management (cips.org)

[3] What is Sustainable Supply Chain Management? (rmagreen.com)

[4] Sustainable Supply Chain: Why Is It Important And Best Practices | Locad (golocad.com)

[5] Children as young as eight picked coffee beans on farms supplying Starbucks | Starbucks | The Guardian

ABOUT PLACON
For 55 years, Placon has been a leading designer and manufacturer of custom and stock plastic packaging for the food, medical, and retail markets. Placon has manufacturing operations in Madison, WI; Elkhart, IN; Plymouth, MN; and West Springfield, MA, and currently ranked in Plastics News 2020 Thermoformers Ranking Top 20. Placon delivers packaging breakthroughs that inspire better engagement between people and products with industry leading innovation and award-winning packaging designs. For more information, visit www.placon.com.