Like counting the rings in a tree, you can evaluate how strong a manufacturer’s supply chain sustainability program is by charting its maturity and noting how it has changed and grown over time. Because the regulatory and environmental, social, and governance (ESG) landscapes are constantly evolving, a solid supply chain sustainability program is also one that constantly grows alongside emerging best practices and industry concerns. When you look at a leading manufacturer’s program, you are able to see where they took a leap forward ahead of minimum requirements — their sustainability management follows a maturity model that moves from a compliance foundation to a state of deep sustainability.
Let’s take a deeper look at what it means to develop a supply chain sustainability program with long-term staying power and a quick return on investment.
Why Growth Matters in Supply Chain Sustainability
There’s no end when it comes to supply chain management, regulatory compliance, or ESG management: Regulations are frequently updated to match new science around materials and chemicals, and sustainability is driven by non-stop innovation from organizations seeking to make the most of their resources. And because there’s no end in sight, a supply chain sustainability program needs to be designed from the very start to be able to address emerging trends and concerns. Otherwise, it soon becomes ineffective.
If your supply chain data management process around a particular regulation is static or hardcoded, then adapting to a new requirement can cause your entire process to break down. For example, after the EU Waste Framework Directive (EU WFD) introduced new reporting requirements for the Substances of Concern In articles, as such or in complex objects (Products) (SCIP) database, it was found that 88 percent of manufacturers were failing to provide sufficient information. In almost all cases, it was determined that processes manufacturers previously relied on to comply with other product compliance regulations did not sufficiently capture enough data for SCIP. In other words, the old way of managing supply chain data no longer supported compliance once a new requirement was introduced.
Sustainability management demands that manufacturers get deep visibility into their supply chains to verify that they are free from ESG risks such as forced labor or human trafficking, in addition to due diligence to ensure that resources are getting used to their maximum potential. Consumers, partners, and investors all put continuous pressure on manufacturers to become more sustainable.
Supply Chain Sustainability Maturity in Action: GE Appliances
GE Appliances (GE), a Haier Company, is a perfect example of a responsible manufacturer using a maturity model mindset to grow its supply chain processes. Examining its supply chain sustainability management focuses across the years reveals a deep commitment to being on the leading edge of sustainability issues.
As a global leader in appliance manufacturing across the globe, GE has a mandate to report on how it sources tin, tantalum, tungsten and gold (3TG) under the Dodd-Frank Act’s conflict minerals reporting requirement. GE implemented the Assent supply chain sustainability solution to help collect, roll up, and report its mineral data as part of a responsible mineral program. GE collected smelter data from its supply chain using Assent’s platform and supplier engagement services to ensure its products were compliant.
But GE’s sustainability journey didn’t end there: Working with Assent to map out a deep sustainability growth path for its supply chain, GE’s team matured their supply chain management by adding cobalt reporting processes.
Going Deeper With Cobalt
Cobalt reporting is not required by law, but there is growing scrutiny on the impact of cobalt sourcing by the ESG and regulatory communities. Cobalt is a mineral essential to lithium ion batteries, and is considered the highest material supply chain risk for complex electronic goods like electric vehicles and appliances. GE knew that in order to stay ahead of the crowd as a sustainability leader, evolving its current program to include non-mandatory cobalt reporting was an important step.
Assent rolled out a new cobalt reporting process for GE, expanding on existing supplier relationships and data validation processes. Because GE was already using Assent’s platform and services, expanding the program was simple. In fact, GE was able to streamline its conflict minerals and cobalt reporting processes to cut a collective 1,000 hours of effort while still engaging 350 suppliers in the program.
Get all the details on how GE started a conflict minerals program and then matured it with cobalt reporting. Read the case study now!
Take the First Step Toward Deep Sustainability
No matter where you are in your sustainability journey, you can take steps to enhance the maturity of your program for deeper sustainability. Supply chain sustainability is all about having a resilient and transparent supply chain that considers both product compliance and ESG factors to deliver durably good products to the market.
The supply chain sustainability journey looks different for every manufacturer, but there are some fundamental elements of achieving deep sustainability that every manufacturer should aim to achieve for their supply chain:
- Building a strong compliance foundation that protects market access and protects consumers and the environment from safety and health concerns
- Focusing on supply chain transparency and removing silos between departments
- Engaging suppliers and educating them on ESG and compliance goals so that they become strategic partners
- Taking opportunities to uncover and respond to ESG risks hidden in your supply chain
Ready to start your journey? Take the first step and contact Assent to learn more about how our supply chain sustainability solution can help your organization.