Supply Chain | New Zealand Business Council for Sustainable Development (NZBCSD)

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Supply Chain

Introduction What is a Sustainable Supply Chain?How to Implement a Sustainable Supply Chain

Step 1

Upstream Supply Chain Internal Operations: Logistics Product Development and Stewardship What Drives Change?Links and Resources



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STEP 1: LOOK AT YOUR INTERNAL PROCESSES FIRST AND MAP YOUR OWN RISKS

Organisations need to identify, understand and manage issues within their own organisation before they start working with other organisations in their supply chain. That will ensure these issues are successfully managed throughout.

Creating a sustainable supply chain can therefore be a next step for companies that have produced a Sustainable Development Report. Greater detail on how to do this is provided in the NZBCSD Guide to Sustainable Development Reporting available at www.nzbcsd.org.nz/sdr . If there is one key driver for all of the participating companies it is that sustainable development is driven from the top down within each organisation. If senior management is unconvinced – it won’t happen.

Select your potential risks below and assess its level of importance to your business. Risks do not need to be certain for them to cause damage to your bottom line. You should start by improving the risks you rated as substantial or high risk. We will list these risks once you have completed the form.

PROCUREMENT


		Sustainable source of raw materials including all components Chain of custody is uncertain. May result in consumer concern/NGO activity; Ineligibility for public/private tenders Examples: Retailers request GM-free – foods and non-foods; NGO activity relating to deforestation; UK Govt procuring doors and desks for Whitehall from endangered species Not applicable Very low risk/impact Low Moderate Substantial High risk/impact


		Use of chemicals/hazardous substances Product safety scare. Precautionary Principle might be applied in certain countries. Product Recall Examples: Pesticides in produce. Marks & Spencer ban PVC. Not applicable Very low risk/impact Low Moderate Substantial High risk/impact


		Animal husbandry: Breeding; Feeding; Food supply Loss of business because chain of custody cannot be proved Examples: See Richmond case study – need to demonstrate animal husbandry. Not applicable Very low risk/impact Low Moderate Substantial High risk/impact


		Long-term supply Source drying up will threaten economic viability Examples: Fears for long term-fish supply prompted development of MSC; Maui gas supply; Toyota developed hybrid vehicle recognising diversifying energy supply. Not applicable Very low risk/impact Low Moderate Substantial High risk/impact


		Short-term supply Insufficient product to fulfil demand Examples: NZ police not able to source enough LPG vehicles. Not applicable Very low risk/impact Low Moderate Substantial High risk/impact


		Waste & packaging Inefficent use of resources. Cost to business Examples: Cost of landfill – levies and charges Not applicable Very low risk/impact Low Moderate Substantial High risk/impact


		Labour standards & practices. Conditions do not conform to ILO standards Media scrutiny; boycotts; Loss of business, eg. ineligible for public/private tenders Examples: Overseas labour conditions, eg. Nike; Gap. Not applicable Very low risk/impact Low Moderate Substantial High risk/impact


		Supplier dependence and viability Eliminating a supplier from supply base might close their business and cause public outcry Examples: Marks & Spencer's decision to move some of its supply base from UK to overseas. Not applicable Very low risk/impact Low Moderate Substantial High risk/impact


		Fair pay for suppliers Sustainability of supply base and potential adverse publicity Examples: Coffee supply; Fair Trade products Not applicable Very low risk/impact Low Moderate Substantial High risk/impact


		Inventory levels Negative impact on cash flow Examples: Companies left with seasonal stock due to inefficient procurement Not applicable Very low risk/impact Low Moderate Substantial High risk/impact


		Local supply or overseas Buying local may be more expensive and problems with continuous supply;. Examples: Sainsbury have preference for local produce supply – selling $6bn worth per year. Not applicable Very low risk/impact Low Moderate Substantial High risk/impact


		Escalating cost of supply Economic viability of product or services Examples: Increase in fuel costs; Energy costs which cannot be passed on to end consumer Not applicable Very low risk/impact Low Moderate Substantial High risk/impact

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