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26 Mar 2024

Building a Sustainable Supply Chain: Strategies, Principles, and Initiatives for Franchisors and Franchisees

Building a Sustainable Supply Chain: Strategies, Principles, and Initiatives for Franchisors and Franchisees

Sustainability has become an imperative for most businesses, inputting strategies to reduce negative environmental impact and ensuring a future-fit company. A sustainable supply chain refers to the impact the supply chain has on the environment, society and economy. The goal is to minimise negative impacts on natural resources, ensure economic viability throughout the supply chain process, and prioritise a positive impact on the people and communities in and around the operations. Maintaining a sustainable supply chain is a fundamental way for organisations to ensure their commitment to eco-friendly operations.

There is a growing consumer demand for ethically sourced products and environmentally friendly practices, positioning companies that are sustainability-focused as leaders in corporate responsibility and preferred choices for conscientious consumers. According to The Economist Intelligence Unit, there has been a global 71% rise in online searches for sustainable goods, which highlights how consumers have growing concerns over the environmental impact of industry and production. This also accentuates how businesses can optimise their appeal in the consumer’s eye by ensuring sustainability within their supply chain process. In turn, this can bring long-term business success.


What are the core principles of supply chain sustainability?


The foundation of supply chain sustainability strategy lies in the integration of environmentally friendly practices in the overall supply chain management. This can span across the entire lifecycle of products, from sourcing raw materials to manufacturing, distribution, and minimising waste at the product’s disposal. Strong relationships and communication are essential with suppliers to ensure these practices are implemented.


Environmental Responsibility is a core principle of supply chain sustainability. This is an ethical obligation that businesses are committed to reducing their environmental impact and abstaining from damaging natural environments.


The next core principle is Social Equity. This is focused on the rights and respect for humans involved in the supply chain process, from fair labour practices to safe working conditions, fair wages and promotion of diversity, equality and social inclusion.


The final core principle is Economic Viability, which emphasises the importance of ensuring that sustainable practices are economically feasible and contribute to the long-term financial success of all stakeholders involved in the supply chain. By prioritising profitability alongside environmental and social responsibility, businesses can create a sustainable supply chain that benefits both society and the organisation itself.


What are the key strategies and initiatives franchisors and franchisees can implement to promote sustainability in their supply chains?


Ethical Sourcing: This is about ensuring your product or raw materials are sourced from suppliers that adhere to sustainable, ethical standards. For example, this would include ensuring the procurement did not disrupt working conditions or harm the environment.


Supplier Collaboration: This part involves working closely with your suppliers to optimise various aspects of the supply chain. Working together with transparency to set sustainability goals, track performance metrics and implement continuous improvement initiatives is fundamental to maintaining eco-friendly practices.


Product Lifecycle Management: Implement sustainable product design and manufacturing practices to minimise environmental impact throughout the product lifecycle. Consider factors such as eco-friendly materials, energy-efficient production processes, and recyclable packaging.


Green Transportation: Optimise transportation routes and logistics operations to reduce fuel consumption, emissions, and overall environmental footprint. Explore alternative transportation modes and prioritise minimising carbon emissions.


Waste Reduction: Minimising waste reduction, making the most out of the resources available and promoting recycling within your operations can massively reduce your environmental footprint. Strategies include ensuring consistency in product offerings and packaging sizes across all franchise locations, this would reduce product variation and could help minimise waste associated with excess inventory and packaging materials.


Energy Efficiency: Energy plays a crucial role in reducing carbon emissions, conserving resources and lowering operational costs. Strategies include conducting an energy audit, upgrading lighting systems, optimising heating, exploring renewable energy options and more.


In summary, implementing sustainable supply chain practices can have a number of benefits for businesses as being purpose-driven and environmentally conscious is a competitive advantage. With the earlier statistics demonstrating the rise in consumer concerns over sustainability practices, implementing an eco-friendly supply chain can help to attract a motivated, skilled workforce that drives financial success. Moreover,  adopting sustainable supply chain practices not only aligns with corporate social responsibility goals but also enhances brand reputation and customer loyalty. By demonstrating a commitment to environmental stewardship and ethical sourcing, businesses can differentiate themselves in the market and appeal to socially conscious consumers. Lastly, a sustainable supply chain can lead to cost savings through reduced waste, improved efficiency, and long-term resilience against supply chain disruptions. Investing in sustainability not only benefits the planet but also contributes to the long-term viability and success of businesses in an increasingly environmentally aware marketplace.


At The International Franchise Show on the 12th-13th of April 2024, we have a designated Suppliers Zone which is aimed to provide you with the right resources for optimising your supply chain. Grab your free tickets through the website and have a chat with the suppliers about sustainability measures.


IFA                       natwest

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