28
Jul
2020

Supply Chain Law: 3 Approaches for Smooth Implementation

 

Consumers have become critical. and even more so during the Corona crisis. Companies able to prove that they’re operating sustainably already have an advantage, and that will make them even more successful in the future. The good news is that switching to a sustainable supply chain isn’t all that difficult.

The German Supply Chain Law is supposed to go into effect on January 1, 2021. The law’s main goal is to make German companies assume their responsibility to avoid infringement of environmental or social standards in their supply chains.

In other words, companies must be responsible for what happens in their manufacturing countries–where and under which conditions they manufacture their products. Not in minute detail, but in general. The Otto Group, Tschibo, Rewe, and over sixty other companies had demanded this law, so there is a good chance that it will soon be approved at the European level.

The demands are not coming out of nowhere–consumers are becoming increasingly critical. Web searches for “sustainable fashion” triplicated between 2017 and 2019. According to a 2019 survey*, 71 percent of Germans consider clothes manufacturers responsible for their supply chains. Another survey by PricewaterhouseCoopers done after the COVID lockdown confirms that there hasn’t been such a strong convergence of themes dealing with transparency, sustainability, and social awareness since 2011.

So how do you get a sustainable supply chain project started?

Evoking this kind of trust in consumers will be worth every penny, and every measure taken clearly communicating to the public. The first steps towards a sustainable supply chain are relatively few and easy to implement. The focus should be on transparency. It is important to start with an awareness about when and where your supply chain could already have critical points, or at what point that could be the case.

  • This kind of transparency calls for a large, solid data foundation that’s being constantly updated. Suppliers must either provide or require this data, which can be obtained from large indexes like the HIGG index–a uniform methodology to collect sustainability data about textile production–among others.
  • The technical basis for this possibility is an ERP system that works on the one hand like a data reservoir or pool, while at the same time collating and interpreting it. This provides management with material to base their decisions on.
  • The contentis based on a self-assessment–companies must decide which values and standards they consider important in terms of environment protection and ethics, and prioritize those along the whole life cycle of a product. This includes, among others, materials, manufacturing, packaging, transport, use, and disposal.

We would be happy to assist you in taking the first steps towards a sustainable supply chain. You’re welcome to read our Lifehacks, which show how implementation works concretely.

  • Life hack for Sustainable Acquisition: Keeping an Eye on Suppliers’ Evaluations>> Read now!
  • Lifehack for Sustainable Acquisition: Monitoring Your CO2 footprint >>Read now!
  • LLifehack for Sustainable Acquisition: Creating CSR reports in a flash >> Read now!
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