While manufacturers were early adopters of a sustainable supply chain due to their desire to switch from plastics to biodegradables, reduce packaging and pursue recycling, the end user was not always aware of these efforts.
The “relationships” between manufacturers and their supply chain were not important to the end user, writes Kate Ancell, in an article on granthorton.com.
“The customer didn’t care,” said Robert Schwartz, National Performance Improvement Leader at Grant Thornton. “It was about being on time, with good quality, and coming in on budget.”
However that attitude is changing as more end-use buyers are willing to pay more for a sustainable product, according to Schwartz. This leads to a need for a closer collaboration between suppliers and manufacturers.
“Collaboration between manufacturers and their suppliers is imperative for competition,” says Schwartz. With better, more sophisticated technology, seamless integration is now possible across the supply chain. Automatic trigger points allow businesses to reduce “fire drills” and get products to market more quickly and efficiently. In this environment, then, “relationships are crucial, to make sure that all three elements of competition — schedule, cost and quality — are aligned,” says Schwartz. Simply put, companies that don’t get this right won’t compete in the future.”
The new level of collaboration will be necessary to achieve a variety of sustainability initiatives that manufacturers have underway. In Grant Thornton’s sustainability survey, the most frequent corporate sustainability initiatives revolved around developing ways to reduce energy consumption (66%), recycling (66%), production waste (53%), and packaging and unused product (46%).
Manufacturers need to create a baseline for suppliers to determine if their efforts are helping achieve the initiatives. “If companies have good information — and most companies don’t — they can quickly learn how vendors and suppliers are performing, and attack the issues,” said Schwartz.