Supply chain efficiency
Work closely with suppliers to ensure you all maintain high environmental standards throughout the supply chain
If you are serious about reducing the environmental impact of your business, it's essential that you work in close partnership with your suppliers to ensure that they maintain their own high environmental standards. As a supplier, you should also help your customers to meet their environmental targets.
There can be significant cost benefits from being environmentally aware. Reducing energy consumption, raw materials, waste production and waste disposal can all have a major impact on the profit your business makes. By working together with other organisations in your supply chain you can help to ensure that you each operate efficiently and keep your impact on the environment to a minimum.
This guide explains what impact an effective supply chain partnership can have and how to manage suppliers in a spirit of co-operation and partnership. It also shows how suppliers can contribute to the process through positive action, by meeting independent standards for sustainability and environmental awareness.
Benefits of a supply chain that reduces environmental impacts
Reducing the environmental impact of your supply chain can cut costs, reduce waste and improve efficiency
There are significant business benefits in having a supply chain that minimises environmental impacts. As the importance of environmental issues grows, these benefits are increasing.
Advantages of an efficient supply chain
You can achieve significant cost reductions with a more efficient supply chain through:
- reduced waste
- improved operational efficiency
- better use of raw materials, technology and energy
By working with your customers and your suppliers you can cut costs for all parties and reduce the impact of your activities on the environment.
Working in partnership with your suppliers will increasingly enable you to participate in a 'virtuous circle' - in which you can both 91香蕉黄色视频 and reinforce each other in improving practices. Increasingly, businesses, the public sector and consumers are using environmental performance as one of their criteria when they make buying decisions. You may be asked, or find it necessary, to demonstrate improved environmental management as part of the sales process.
You may also find it easier to comply with health, safety and environmental legislation. For example, considering the design of a product or its packaging can help you to comply with packaging legislation and make it easier to be handled and delivered. Designing or redesigning products and packaging can also help you minimise waste in the first place.
Reputation is a key asset in business. Working together with other organisations in your supply chain can reduce the risk of your business being associated with another organisation that has a poor environmental record.
How to select a sustainable supplier
Steps to choose more sustainable suppliers to match your environmental aspirations and improve environmental performance
Using a supplier who can meet your standards for environmental and social issues can help you reduce your impacts through your supply chain.
Ways to select more sustainable suppliers
You may decide to reward a supplier who can exceed your requirements and provide a more sustainable product or service.
You can evaluate the environmental and social performance of a supplier before you award a contract to them for goods and/or services. This is called pre-qualification.
You may choose to use a pre-qualification questionnaire (PQQ) to check that a supplier can meet your standards for environmental and social issues.
In your pre-qualification questionnaire you can ask your potential suppliers about:
- environmental management practices, eg ask if the supplier uses a certified environmental management system (EMS) such as ISO 14001 to assess their own environmental impacts, monitor their environmental impact and performance, maintain legal compliance and gain senior management commitment
- compliance with environmental legislation, eg check your supplier has not been prosecuted for breaking the law
- a product's environmental impact, eg ask about its resource use, whether waste is created during its manufacture, whether it uses hazardous substances, how much packaging it uses
- delivery of your own specific environmental or social aims, eg to reduce the carbon footprint throughout your supply chain, becoming a signatory of the Ethical Trading Initiative base code
- the supplier's buying practices - this can be useful in identifying environmental and social risks further down your supply chain
- social responsibility policy and practices, eg whether the supplier identifies and assesses their own social risks and those of their supply chain and whether the supplier monitors compliance with International Labour Organisation standards in their supply chains
Work together to reduce environmental impacts of the supply chain
How you can work together with customers and suppliers to improve your environmental performance
Working together is essential to maintaining an environmentally sustainable supply chain, with good communication leading to closer collaboration. By partnering and developing good working relationships, suppliers can be encouraged to adapt their offering - products, packaging and services - to deliver improved environmental performance.
Improving supply chain performance through partnership
Improving the environmental performance of supply chains - whether as a customer or supplier - is a partnership that benefits from the following principles:
- commitment to the environmental objectives of the partnership from senior management and employees
- someone in authority appointed as the business' champion for the partnership
- a team established to implement improvements arising from the partnership
- a detailed review of environmental performance to identify key issues that the supply chain partnership should focus on
- a planned programme of environmental improvements
- objectives and targets established to ensure that the improvements can be measured to assess progress
- regular review of progress, with changes made when necessary
Feedback is essential on all sides, as is providing information about the importance of environmental considerations.
Benefits of buying sustainable goods and services
How making sustainable purchases can benefit your business and the environment and address social issues
There's no legal requirement for you to purchase sustainably, or to buy sustainable goods and services, but it could help you to:
- reduce your impact on the environment
- address social issues and improve the livelihoods of individuals and communities
- improve your business' reputation
- save money over the life of a product or service
Advantages of sustainable purchasing for your business
Sustainable procurement can help your business to:
- save money and reduce your materials, equipment and running costs, eg reducing the volume of waste you send to landfill could lower your operating costs, and by using energy and water efficient products and services you can significantly cut your utility bills
- win new business and improve your prospects when tendering for work - some larger businesses and public sector organisations could ask to see how you manage your environmental and social impacts or ask you to meet certain sustainability standards
- improve your reputation among staff, customers and the public
- reduce your exposure to risk, eg by keeping up to date with changes to environmental legislation which could affect the products you buy
- attract lenders or investors who work to environmental or ethical principles
- take advantage of tax breaks such as the Enhanced Capital Allowance (ECA) scheme, which provides a tax incentive to businesses that invest in energy-saving and water-saving equipment, and low-emission vehicles
- qualify for business 91香蕉黄色视频 and loan schemes when buying energy-saving equipment such as interest-free energy efficiency loans from the Carbon Trust
Environmental and social benefits of sustainable purchasing
By buying sustainable goods and services you can:
- reduce your carbon emissions, eg by using renewable energy or buying energy efficient products to reduce your energy use
- save natural resources, eg by choosing products and services that use recycled materials or waste as a raw material or resource
- reduce waste sent to landfill, eg by buying products which can be reused or recycled
- help your local or wider communities, eg by creating work for local suppliers or buying fairly traded goods to help improve living and working conditions
- create a market for new sustainable goods and materials to help the green economy grow and create new green jobs
Get a free sustainability report
All Northern Ireland businesses with an annual energy and resource spend of more than 拢30k can get a free assessment of their environmental performance across areas such as raw materials, energy, carbon, packaging, biodiversity and waste - .
How to improve your suppliers' environmental performance
Make sure that all your suppliers are managing and improving their environmental performance
You can reduce the environmental impact of your supply chain by conducting a detailed review of the resource efficiency of each business in the chain - including your own. Look for ways to reduce waste and to improve the efficiency with which resources such as water and energy are used. Examine opportunities for reuse and recycling of materials and packaging.
You should investigate whether there are technologies that you can use to improve the efficiency and sustainability of your supply chain. For example, using electronic data interchange technology can reduce your supply chain costs and paperwork.
You may be able to encourage your suppliers to develop an environmental management system by establishing purchasing policies that have an environmental policy as one of the key criteria. You can insist that your suppliers have policies designed to reduce waste, raw material use and energy and water consumption, and to use renewable resources wherever possible.
You should consider the advantages of requiring suppliers to have their environmental performance validated by implementing one or more stages of the standard BS 8555. This can help drive environmental improvements through your supply chain.
Your suppliers should follow the principles of continual improvement and have key performance indicators to measure and monitor improvements.
You can have your own environmental policy that your suppliers agree to follow, which sets out requirements on both sides to reduce waste and improve efficiency. The benefits of this are:
- greater control over energy, materials, water and waste costs
- improved efficiency
- better and easier compliance with legislation
- competitive advantages in dealing with other environmentally aware businesses
If your business is certified to the ISO 14001 standard or is verified under the Eco-Management and Audit Scheme (EMAS), you must carry out an environmental review of your suppliers. This typically includes:
- a pre-survey questionnaire
- a site survey by an experienced person, such as a trained auditor from your business or an external consultant that you appoint and pay for
- a report outlining the supplier's existing procedures, current environmental performance and suggestions for improvements and further action
The results of the review will enable your suppliers to focus their efforts on identifying and implementing opportunities to reduce waste.
If you're not in a position to persuade your suppliers you could emphasise the benefits of reducing their environmental impacts.
Being a supplier with good environmental credentials
Maintain a competitive edge by meeting the environmental standards that are increasingly set by major customers
As well as looking at your own suppliers, it will benefit your business if you consider your own environmental performance as a supplier. You can maintain and improve your competitive edge by committing to improve your environmental awareness and reduce the impact of your activities.
Increasingly many major businesses, government departments and other public bodies have environmental standards as a key requirement in their procurement policies. If you do not match these standards, you may not even be considered as a potential supplier - no matter how good your products or services.
As a minimum, you should have a written environmental policy with action points and key performance indicators listed. You should produce regular environmental reports and carry out staff training and performance monitoring. This policy can be objectively assessed by various independent bodies, and you could also make a public declaration of the steps you have taken to protect the environment.
More formally, you can also apply for certification to an environmental management system standard, such as ISO 14001, BS 8555 or the European Union Eco-Management and Audit Scheme (EMAS).
Developing an environmentally sustainable supply chain with your customers, as with your suppliers, commits you to a common set of agreed standards, and to continually improve your performance. Significant benefits can result, in the form of reduced cost, increased business and an improved image among customers, suppliers, employees and other stakeholders.
You may also be able to encourage organisations further up the supply chain to improve their environmental performance. Even if you are a small supplier to a much larger buying organisation, if you can demonstrate potential cost savings that lead to improved environmental performance you may be able to persuade the buyer to pass on some of the savings to you.
Key areas for your supply chain partnership to focus on
Key environmental issues that you should consider as part of an effective supply chain partnership
Your supply chain partnership will only work effectively if certain key issues are dealt with. First and foremost, you should be satisfied that your suppliers comply with any applicable environmental legislation.
If they don't it could have a direct impact on your business - for example if your business handles products or uses packaging that does not comply with environmental or safety requirements. It could also have an adverse impact on your reputation with customers and your own employees.
Complying with legislation is the minimum standard but other areas to concentrate on include:
- policies to minimise waste such as reduction, reuse and recycling
- improving water efficiency
- ensuring that packaging is minimised and what packaging is used can either be recycled, recovered or reused
- working on product and service design to improve environmental performance
- improving energy efficiency
- using transport efficiently, eg cutting down deliveries, using more efficient transport, eliminating unnecessary journeys
- warehousing - just-in-time manufacturing reduces inventory, which in turn has cost benefits and reduces the likelihood of waste through over-ordering
- introducing information technology that enables you to communicate more efficiently with suppliers and customers
- product returns - having a quality-control agreement with your supplier can cut down on the number of faulty, damaged or unsuitable goods delivered, which also reduces waste and prevents unnecessary delivery and re-delivery costs