Sustainability of smaller suppliers is important particularly given the increase in disruptive incidents from whatever source — accidents, resource shortages and societal unrest.
Smaller suppliers are often hard-pressed to ensure the financial viability of their small businesses and so when it comes to sustainability they may have the basics in place but that’s about all.
If smaller suppliers wish to do business with larger institutions or cross-border trade, they will be asked to provide evidence of their sustainability. Sustainability of a small supplier includes succession planning, adherence to local laws and regulations, especially labour, health and safety and environmental practices. There are a number of other factors to consider but in this brief post we can’t go into them all.
The challenge is to convince smaller suppliers about the importance of sustainability. Often their knee-jerk reaction is that it is something that will cost them more money. This is the old cost vs investment mentality. By putting sustainability processes and, where necessary, equipment in place, smaller suppliers are actually investing in their business.
Sustainable practices for small businesses have several benefits including access to markets, access to customers, better protection of their own business operations and often can mean a point of differentiation between their business and competitors in the market.
Assistance is available sometimes from larger institutions to support small businesses who wish to take the sustainability route. Here the main challenge is investment in time. The smaller supplier has a limited number of staff and sending staff away for training can impact the performance of their business, albeit for a short. However, without someone having the necessary knowledge and expertise of what needs to be done to make the business more sustainable, it really is not possible to change the business.
When you do business continuity management, your risk analysis and business impact analysis clearly shows the importance of suppliers in your supply chain. If the supplier is critical, its worthwhile initiating a conversation with the supplier to look at ways to increase their sustainability.
If you are interested in sustainability in the supply chain and need assistance, please let us know.