Consumers are more conscientious about their purchases than ever before.

They expect organizations

to meet a certain set of ethical standards, and supply chains aren’t exempt from scrutiny.

To meet these expectations, companies must enact significant changes that ensure environmental
stewardship, decreased damage, and sustainable sourcing, manufacturing and product distribution.

More than 90 percent of the damage caused to the environment by consumer-packaged goods (CPG)
producers — including 80 percent of greenhouse gas emissions — comes from the supply chain.

Why is the introduction of more ethical and sustainable supply chains a good practice for any business?
Because it improves regulatory compliance, enhances business branding and reputation, reduces waste
and overhead, and leads to responsible environmental sourcing.

To accomplish the goal of an ethical and sustainable supply chain, as well as the ability to track and trace
shipments to any location, companies will need to enable the right technology. Specific actions to be
taken include:PPT

Minimizing the environmental impact of supply chains will continue to be a focus for companies, as
consumers become more aware of how goods are sourced, manufactured and distributed. A forward-
looking supply chain strategy, combined with the right technological solutions, will help organizations
build more sustainable, responsible and ethical supply chains.

Traditionally, companies have tracked performance based largely on financial

accounting principles, many which date back to the ancient Egyptians and Phoenicians.
Financial accounting measures are certainly important in assessing whether or
not operational changes are improving the financial health of an enterprise,
but insufficient to measure supply chain performance for the following reasons:

 The measures tend to be historically oriented and not focused on providing

a forward-looking perspective.
 The measures do not relate to important strategic, non-financial performance,
like customer service/loyalty and product quality.
 The measures do not directly tie to operational effectiveness and efficiency.

In response to some of these deficiencies in traditional accounting methods

for measuring supply chain performance, a variety of measurement approaches
have been developed, including the following:PPT

NETWORK DESIGN

There is however some weaknesses in that the model is large and time consuming to develop. The
decisions that can be made using these models are more strategic than operational in nature.

ROUGH CUT

However, most of the studies of this type tend to ignore the production side at cell level and supplier
capacities which is a main part of the supply chain. The other limitation is that this model focuses on
inventory systems only and ignores the effect of transportation. For that reason many professionals
thinks this method is a bit restricted due to the theoretical nature of the model.
In general Supply chain modelling is used to test alternative supply chain decisions, evaluate
performance and analysis weakness of the supply chain by supply chain analyst or managers. Significant
efforts have been put into the creation of an ideal supply chain model so that accurate design on
improvements in performance can be made.

RISK MANAGEMENT

Risk management stimulates many supply chain best practices. Risk management generally improves
supply chain partner relationships as information sharing improves. Trust also increases as the practice
of risk management demonstrates commitment and capability the supply chain can count on.

Risk management delivers a strategic competitive advantage to organizations, allowing them to gain
market share from poorly prepared competitors when a common risk strikes. In addition, risk
management drives improvements in discovery, prevention and addressing smaller risks that
nonetheless cost the organization effort, expense or time. These benefits increase when practiced
across a supply chain.

A supply chain practicing risk management is faster to spot risk, faster to respond to it, and faster to
claim advantages from these capabilities. Competitor supply chains’ and organizations’ risk management
practices may not be as well developed. This becomes a key strategic competitive advantage, even for
commodity product producers

Five steps to improve risk management at your organization

One of the most common issues supply chain managers face is known as the “bullwhip effect” in which
small fluctuations in demand at the downstream end of the supply chain may cause out sized variations
at upstream suppliers. The effect is a bloated and ineffective supply chain with too much inventory. An
effective supply chain manager will want to use strategies to reduce the bullwhip effect to improve the
overall efficiency of the supply chain.  Some proven strategies are: PPT

1. Collaborate with customers and suppliers

Another strategy to improve supply chain effectivity is through better collaboration with customers and
suppliers. When companies work with customers to understand their plans and forecasts, they can build
promotions and seasonality into the forecast and then provide more insight to their suppliers to help
prevent the buildup of unnecessary inventory due to the bullwhip effect.

Supply chain management software often has capabilities to aid in collaboration. Supplier portals, EDI
transactions, event alerts and project portals are some of the most common ways to increase visibility
and collaboration.

2. Improve forecast accuracy

Even if a company tries to become more demand driven, it still need a forecast to plan long lead time
items or to cover demand from new customers, new products or in-house promotions. While it’s a given
that a forecast will be inaccurate, there are steps that can improve accuracy. Ensuring that you use the
right algorithm to project demand is one way to increase accuracy; taking input from sales and
customers is another.

3. Enable fast decisions with visibility and insight

The most important benefit of supply chain management applications is the visibility and insight they
provide. Without the right degree of insight, a supply chain manager must rely on guesswork or rules of
thumb to make decisions. The result will nearly always be sub-optimization of the supply chain that
results in higher costs, excess inventory, and slow deliveries.

4. Adopt a demand driven supply chain management approach

Demand driven supply chain management is one of the most effective ways to reduce the bullwhip
effect. It is a known fact that most forecasts are inaccurate, so when actual demand materializes it is
almost certain to differ from forecast quantities. This causes companies to place emergency orders on
suppliers. Without effective communication, those suppliers’ supply chain management systems will
overreact, setting off a chain reaction of excess inventory that increases cost and slows velocity. In
contrast, a demand driven supply network will have less overall inventory and be more responsive.

• Process and design capabilities

• Quality and reliability

• Cost

• Service

• Capacity

• Location

• Management capability

• Financial condition and cost structure

• Planning and control system

• Environmental regulation compliance

•  Willingness to share technologies and information

• Longer-term relationship potential

• Supplier selection scorecards