Your supply chain doesn’t just provide your business with the physical materials, components, and chemicals needed to manufacture your goods, it also delivers a constant stream of information that could be vital to your success.
Unfortunately, most businesses aren’t properly tapping into their supply chains as a data resource. Instead, they leave themselves in the dark, all because the supply chain is notoriously full of information gaps into which sustainability data can get lost forever.
Where to Look for Gaps First?
Even between your business and its closest vendors, there’s a dramatic information gap that could be putting you at risk during reporting season. One of the most common examples is in the relationship between chemical/coating suppliers and your business.
Because many suppliers need to keep their proprietary blends confidential, they can’t give you the exact formulas of the products you use in your own facility. This means you have to deal with wide ranges for chemical components on the MSDSs they provide you.
For example, a particular component could be marked as making up anywhere from 10 to 50% of a product. As a result it can be nearly impossible to accurately report your hazardous air emissions from sources like paint spray booths.
You can read more about the dangers of this information gap here, where we’ve tackled this issue before, or you can download our guide to solving the problem once and for all.
However, this is just the first of many information gaps throughout your supply chain that ultimately cumulate in gaps in your own environmental recordkeeping. Today, more and more businesses are moving toward supply chain sustainability, and that’s causing attention to get cast further down the supply chain.
Bringing the Whole Supply Chain into the Picture
Today, it’s not enough to have a good idea of what your suppliers are doing. You now need to know what every supplier along your entire supply chain is doing because it all points directly to you.
For example, if you are striving to make sustainability claims about your product, you need to know whether the raw materials being extracted to make components are ethically sourced and that workers are getting treated fairly.
But because most supply chains in the manufacturing industry are complex and multi-tiered, it is usually difficult to collect all the environmental information being generated by suppliers. And for each jump from tier to tier that environmental and sustainability data makes on its way to you, a huge percentage of data gets lost into information gaps. By the time it reaches you, there might be no indication of how sustainable your tier IV suppliers really are.
In fact, most businesses only know their own sustainability data, and only recently have they started to pay attention to their tier I and II suppliers. Even collecting this information can require a lot of time and effort.
For example, do you know the carbon footprint of your direct suppliers? What about their suppliers? Most environmental managers don’t even have a system in place for capturing this type of embedded information.
Even though this type of information won’t appear on any regulatory compliance reporting you’ll do for the government, it is still of concern to your target market, environmental interest groups, and other large OEMs.
Filling in the Information Gaps
There’s really only one way to stop information from falling into the gaps between tiers, and that’s to collect it directly from the source.
It’s all about entering into a transparent dialogue with your suppliers at all levels of the supply chain and communicating your need to share sustainability information. As we’ve written about before, sometimes this takes a little extra push from the top tiers and OEMs of a supply chain to get things in motion.
It’s also vital to get an environmental data management system in place that can store the influx of data that your supply chain creates. We recommend an automated vendor-data transfer system, like a private online portal, in which your suppliers can enter data without worrying it will get lost, stolen, or misused.
It’s important however, to aim for some level of sophistication in your environmental data solution. It ideally should be able to verify incoming data, allow for easy upload and download, and maintain a clear audit trail to protect everyone involved.
If you’re looking to implement a supply chain management system that will help you track data throughout your entire supply chain, it’s essential that you provide a strong motivation and some incentive for your suppliers to participate. One of the key factors at work in today’s manufacturing industry is the competitive advantage that being a willing sustainability partner provides.
In fact, there are even OEMs and other influential businesses out there that are now making participation in total supply chain sustainability tracking a prerequisite for becoming an official vendor. We’ve got an entire article about how to motivate your supply chain to take part in your sustainability projects, which you can read here.
To learn more about the benefits of using an online data-sharing system and how some businesses are already leveraging them to avoid common problems related to data loss, download our free eBook “Automating Your Material Data Transfers”.
January 31, 2013