Working Towards a Sustainable Global Supply Chain
Sustainability in the supply chain affects business resilience, reputation and relationships across business segments. In the food and grocery industry the strategic importance of sustainability continues to grow, as the industry is being challenged and challenges itself to reduce its impact on the environment.
Companies start a supply chain sustainability journey for a host of reasons, though primarily to ensure compliance with laws and regulations and to support international principles for sustainable business conduct. Additionally, organizations increasingly are taking actions that facilitate better social, economic and environmental impacts. As a result, businesses are benefitting from the conservation of resources, optimization of processes, product innovation, cost savings, increased productivity and the promotion of corporate values.
The United Nations developed the UN Global Compact, a practical framework for the development, implementation, and disclosure of sustainability policies and practices. This initiative has facilitated the development of voluntary Food and Agriculture Business Principles (FAB Principles), which establish the attributes of well-functioning and sustainable global food and agriculture systems, and articulate a common understanding of the resources, ecosystem services and socio-economic impacts needed to build resilience into these systems and the markets that they serve. They are the first global voluntary business principles for the food and agriculture sector. The six FAB Principles focus on food security, health and nutrition, environmental responsibility, economic viability and shared value, human rights, good governance and accountability, and access and transfer of knowledge, skills and technology.
Organizations are encouraged to align their policies and practices with the FAB Principles, activities and achievements that contribute to meeting the global challenges of food security and sustainable agriculture. Information technology and Enterprise Resource Planning (ERP) technology solutions provide a platform to achieve these principles of supply chain sustainability, as well as provide quantifiable business benefits.
While each of these principles benefit from sophisticated “Whole Chain” ERP solutions, the sixth principle is especially dependent on technology: “Businesses should promote access to information, knowledge and skills for more sustainable food and agricultural systems.”
America’s largest retailer, Walmart, is leading by example when it comes to utilizing technology to improve its supply chain sustainability. In its 2014 Global Responsibility Report Walmart cites the use of technology ensure consistency and effectiveness across its compliance programs. In 2014 Walmart has expanded the use of an audit tool to its international markets and began centralizing data collection systems to create a global view of compliance practices. In addition, following successful implementation in the U.S of an automated food safety process and technology called SPARK (Sustainable Paperless Auditing and Record Keeping), a project has been started to roll SPARK out to international markets over the next few years. SPARK utilizes handheld technologies, Bluetooth and temperature measuring devices to monitor and track food safety compliance at every store from a central system.
In addition to applications like that developed by Walmart, information technology and whole chain ERP systems contribute to the successful achievement of supply chain sustainability goals and principles in areas like inventory management, paper reduction, logistics and many more.
Initiatives like the UN Global Compact and the FAB Principles are important drivers in creating sustainable supply chains in the food industry. Already leading technology companies like LINKFRESH have stepped up to collaboratively create powerful whole chain ERP solutions that meet the specific needs of the industry and its quest for supply chain sustainability. This model must continue to be replicated across industries for globally, sustainable supply chains to become a reality of everyday business.
This article was originally provided as a Guest Commentary for The Packer in the August 2014 Issue.