Usually, supply chain collaboration discussions focus on brands and retailers, particularly those who directly deal with consumers and whose reputations, in terms of responsible sourcing commitments, are at stake. However, nowadays, suppliers are faced with increased requirements for sustainability and transparency from their customers. In the short and long term, the ability to be accessible regarding their supply chains, be transparent about their CO2 emissions, and adopt responsible practices implies key benefits for suppliers.
As a transparency platform, we have been working with thousands of suppliers. A recent example is Tecnocap who uses sustainabill to increase their supply chain sustainability. The company is an innovative metal closure manufacturer supplying divers industries.
1. MEET LEGAL REGULATIONS
A comprehensive understanding of your supply chain is essential to ensure supply chain risk resilience, compliance with pending regulatory requirements, and good sustainability performance. Suppliers are noticing the importance of their collaboration with the government and trying to direct their supply chains towards more sustainability.
A current example is the German Supply Chain Act. The German Development Minister, Gerd Müller, and the Minister for Labor and Social Affairs, Hubertus Heil, are campaigning for stricter regulations and due diligence for businesses. Under this legislation, corporations will be forced to ensure compliance across the entire supply chain, including international manufacturing sites.
2. STAY ON TOP OF CUSTOMER REQUIREMENTS
For brands and retailers, accountability is an increasing imperative, making it a priority for their suppliers as well. While brands communicate with their customers personally, customer preferences and market trends gradually become aware. Eventually, these reflect on their suppliers. Thus all actors in the distribution network are under the same obligation to engage in programs for supply chain accountability.
The COVID-19 pandemic has made corporations realize the importance of visibility in the multi-tier supply chain. Visibility enables more responsive risk management, efficient monitoring, and allows for overall more robust supply chains. In the months and years to come, requests to communicate with sub-suppliers and gather more detailed supply chain data are likely to increase. To answer such demands, suppliers that plan will be well prepared.
3. INCREASE BUSINESS OPPORTUNITIES
Maintaining business with current customers is one of the most crucial advantages of supply chain sustainability. More brands and retailers require the disclosure of accurate details about their supply chains through their manufacturers.
In the end, supplier collaboration to help satisfy corporate obligations is directly related to the sourcing decisions of brands and retailers. Suppliers that meet the required criteria for sustainability will continue to operate with their customers, while incapable suppliers will no longer be accepted as a source of supply. For upholding client-supplier relationships, accountability is becoming compulsory.
4. MONITOR CO2 EMISSION
In the current times of increasing CO2 prices in Germany and Europe, it is crucial to understand one’s emissions. Furthermore, the rising public awareness of CO2 emissions increases the pressure on brands and their suppliers to follow through with CO2 reduction. Collaboration becomes more crucial than ever before.
It creates the possibility for brands and their suppliers to reduce the CO2 emissions hand in hand. To reduce the CO2 emissions, customers will more often ask for data on the supply chain. With little or no visibility in their supply chains, these suppliers will waste considerable time finding the right data and documents. Proactively monitoring the CO2 footprint supports the chance of all supply chain actors addressing their goals of CO2 reduction together.
Achieving this goal creates a unique win-win situation for both the supplier and his customer. CO2 reduction reflects the position of business demands and the end customer, as all strive for a minimized Carbon footprint.
5. DISTINCT YOURSELF FROM THE COMPETITION
All companies want to interact with vendors who are open and easy to work with. Non-responsive suppliers cause consumers to spend extra time following up eventually, reflecting negatively on the supplier as a business partner.
Accepting accountability and delivering information on the client’s request portrays a proactive supplier. These are the preferred suppliers over those who respond slowly or fail to supply the requested data. Transparency in the supply chain allows manufacturers to efficiently obtain and provide the data to their customers in a time-saving matter.
Suppliers can stand out from the competition by choosing to be a responsive partner. This can support the maintenance of existing business and ultimately lead to the gain of new customers.
By prioritizing exposure and responsible procurement, suppliers have plenty to gain as they are a vital part of the manufacturing chain. Sustainability in the supply chain helps suppliers by setting them up for a profitable, immediate, and long-term future and by placing them in a position to meet consumer requirements and business demands.