November 16 2020

How Consumers are pushing Supply Chains to work more Sustainability

Supply Chains have various levels of communication; between consumers, customers, businesses and suppliers. The feedback loop for improvements runs both ways, from top to bottom and vice versa.They are global networks, and are constantly evolving and adapting on business and network levels to achieve more efficient, sustainable and accurate results.
The Internet and social media has allowed consumers to get closer than ever to businesses, their practices and their values. In the last decade, information technology has resulted in greater transparency over the practices and processes of both individual businesses, and whole supply chains.

Transparency & Traceability

The public now wants to know more about who they are buying from, what they are buying and where it came from.

“Consumers are not passive observers – they are playing a critical role in how companies address sustainability in the marketplace."

- Mark Milstein, Clinical Professor of Management and Director of the Center for Sustainable Global Enterprise
This means transparency over the sourcing, packaging and transportation methods used by global supply chain links. This transparency converts into trust, with both other network members and end-consumers as sustainability continues to influence all areas of business.
In the last few decades, visibility over supply chain operations has improved drastically - GPS tracking allows teams to watch deliveries take place in real-time, cloud-based systems allow different teams transfer information both internal and externally, alongside providing data so businesses can “understand new trends and make accurate predictions for the future.
Traceability can be thought of as accountability. In 2016, Canned fish giants, John West, were accused of using fish aggregating devices to catch tuna to meet global demand. This resulted in an enormous amount of bycatch, and the exposure resulted in Greenpeace announcing a campaign to boycott the company. John West has also been accused of a complete lack of transparency over where their produce comes from. This shows the detrimental impacts, should a company not be able to account for where they source their goods.
Translating into broader supply chain practices, traceability allows businesses and consumers to see how their goods travel. Paired with transparency and consumer perceptions, this will lead to increased trust and help to secure a progressive and reliable brand image.

Conscious Consumption

Conscious Consumption means environmental, ethical and sustainable values are having bigger impacts on products purchased. On a Business-2-Business level, this ethical stance means companies are becoming more careful about who they work with, and so supply chains are carefully reflecting on the practices carried out by individual links, and the chain as a whole.

conscious consumption

Dietary trends are swaying heavily towards plant-based, health-conscious and responsibly sourced products. A study released by Zion Market Research pointed to an expected rise of the global organic food and drink market to reach $323 billion by 2024.

*“Consumers are really switched on to the issues of waste and sustainability and, as a result, are becoming more discerning about their shopping habits”. *

“More businesses are thinking about the impact they are having on the environment and what they can do to improve any negative effect their businesses make.”

- Robin Boles, Former Chief Executive of In Kind Direct
Online networks and forums provide consumers with all the information they need to make more ethical decisions when it comes to their weekly shops, meaning consumer word-of-mouth travels further than ever in this digital age.
Consumers vote with their money, and this end decision has a big impact up the ladder. If businesses are to maintain customer loyalty, then addressing issues surrounding unethical or environmentally-damaging processes is critical.

__A Customer-Centric Focus __

customer focused

A Conscious Consumer wants to know where the products on the shelves come from, so they can make an informed choice which aligns with their values. As suppliers, distributors and retailers align their own values with sustainability in mind, different nodes within a supply chain must look to their customer’s standards to then reflect on their own processes.
With an Industry-wide stance swerving towards more ethical practice, this change is resulting in entire networks reconfiguring the ways they work to satisfy this collective goal.
With businesses working with the customer’s values in mind, it’s no surprise that conscious consumption by the individual in a supermarket is having reciprocal impacts far up the chain.

A Push for Sustainability

Consumers now have a larger influence on industry-wide practices than ever, and in 2020, this is translating into a push for more ethical standards.
Supply Chain businesses are reflecting on, and rethinking their practices to meet the expectations of ethically and environmentally-aware consumer preferences.
Speaking locally, retailers aim to please customers, so they will continue to promote product-lines that are selling quickly. Wholesalers and foodservice distributors use systems which let them know which products each of their customers requires and when, and they can use these insights to predict and plan for future product-lines, which accommodate new trends and the ever-evolving demands of the individual consumer.
This demand by consumers to know more about the products they buy surpasses the retailers where they bought their goods from - They want transparency throughout supply chains.
This type of power and influence is unusual - Government legislation and policies used to be the quickest route to changing Industry wide practices. Yet now we approach an age where the consumer’s values are just as influential in the decision-making of big companies on a global scale.

Final Thoughts

Today, sustainability isn’t just pursued by individual consumers or retailers. There is no doubt that ethical consumption is more influential than ever from a consumer’s perspective, but these values are becoming ideologically embedded into businesses, supply chains and global corporations.
Sustainability is now “tied to companies' performance as well as to their reputation,” and businesses are obligated to understand more about their value chain, from how they “procure raw materials and practice responsible sourcing, improve energy use in operations, reduce wasteful packaging and provide ingredient transparency for consumers.”
As industries move digital, this sustainability transformation will only accelerate. With more data, comes more room for improvement, and this will help supply chains to make operational changes to:

Improve transparency

1. Highlight the growing consumer demand for ethical considerations

2. Expose inefficiencies and unsustainability processes in supply chains

3. For more information, you can follow the additional links in the references below

References

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