third-tier suppliers . In that case , it may be impossible to control the mode of operation of the lower-tier suppliers because realising visibility at every stage of a company ’ s supply chain network is complex . Sometimes the lower-tier suppliers are from undeveloped countries where sustainable initiatives are not seriously enforced .
Another concern for some companies is the initial cost of investment required to develop new sustainability standards and strategies to meet regulatory or customer requirements . A survey conducted by the Economic Intelligence Unit revealed that 38 % of companies believe the higher initial costs are a major barrier to implementing sustainability .
Nevertheless , the same survey also revealed that 34 % of the participating companies think that a sustainable supply chain will eventually reduce costs and enable them to break even soon . The estimated cost of ignorance in supply chain sustainability will reach US $ 120 billion by 2026 . Therefore , embracing sustainability as early as possible will help businesses conserve market share in the future and remain competitive .
THREE WAYS TO MAKE THE SUPPLY CHAIN SUSTAINABLE
1 . Don ’ t ignore the lower-tier suppliers ; they pose the most risk According to Harvard Business Review , “ companies tend to focus on their top-tier suppliers , but the real risks come lower .’’ Unknowingly , it could be one lower-tier supplier overseas making employees work in hazardous conditions or dumping toxins into rivers . This is why companies must not ignore the lower-tier suppliers in their network .
Since corporations are more conscious of their impact on people and the environment , companies have been trying to work only
28 July 2023