Is your position in the supply chain under threat?

This is a question every SME should be asking, says Lynda Daniels, director of The Southern Sustainability Partnership consultancy – and organisers of The Big Sustainability Expo (Southampton).

Just as every organisation before us, we strive to build a reputation for quality and customer service to ensure our place in the supply chain. Is this enough, in a fast-evolving commercial landscape?  In my experience, the simple answer is no and, in part, this is why.

I am referring to the ‘new kid on the block’, one that poses a very real threat to our businesses and is making its way through the supply chain, link by link to you.  What do the words ‘sustainability’, ‘environmental management’ or ‘social value’ mean to your business?  No longer simply buzz words associated with large corporations, if they are not already on your agenda they need be and this is true whether you operate in the B2C or the B2B arena.

Large corporations have been working under the weight of environmental legislation for decades, with particular emphasis placed on waste and energy management.  Often based on reaching a certain number of employees – or on turnover it has forced these issues onto the agenda. The burden of legislation is never easy and nor is environmental compliance, however, it is proving to be a game-changer for many of these organisations and that’s why it has gained such momentum.

Organisations soon began to recognise there were enormous benefits to compliance and, when those benefits included significantly reduced running costs, it’s hardly surprising people began to take notice.  And, it doesn’t stop there, improvements were seen across processes and, by no means of less importance a more positive perception of their brand. Additional benefits that will themselves manifest in monetary gain over time.

With tens – and in many cases – hundreds of thousands of pounds being saved came greater scrutiny of the entire process in pursuit of further ways to reduce costs and increase those game-changing media headlines.  Organisations began to create dedicated job titles to facilitate this process within their organisations, an investment in legislation – certainly – and in the creation of further financial gain and carbon saving opportunities.

Organisations around the globe began to adopt the international standard ISO 14001. Now a family of standards launched as far back as 1996, it provides practical tools for organisations of all type, shape and size looking to improve – and manage their environmental responsibility.

Back then ISO 14001 helped organisations adhere to legislation, as well as gain an understanding of what the term ‘environmental management’ actually expected of them with an all-important road map. Today, organisations view it as a standard that simply makes good, practical business sense – one that supports their infrastructure and running costs and helps set their business apart from the competition.

As an SME is this even relevant to us?

When I hear this – and I hear it often, I am reminded of another business growth limiting expression: “We have always done it this way.”

In the absence of actual environmental legislation knocking on the door – there is a comfortable feeling out there that environmental issues are not something SMEs need to concern themselves with. Yes, they may have read the media headlines that talk about large organisations reducing their carbon impact or making running shoes out of waste plastic from the ocean – but, they are not their customers and never likely to be. And, who they are and what they do seems a world apart.

I get it. I do. Running a small to medium-sized business is not easy.  There is enough to concern yourself with, why would you add anything else?

This is why it pains me to relay; this assumption is no longer a valid one.

The supply chain does start at the top, yes, with the largest organisation and their suppliers. However, don’t they have suppliers, who have suppliers who have suppliers? You get my gist. There can be no such thing as denial here, that train is on the track and its stopping at a station near you – it’s just a matter of ‘when’ not ‘if’.

So, what can you do about it?  Well, you can find that nail in your tyre? You know the tyre is going down so do you act now and avoid what could be at best an inconvenience – or worse still an accident? Or, you can wait – after all – it’s not flat yet is it?

Let’s imagine for now you work for one of those large organisations

You are head of sustainability at a large organisation, one that strives to meet legislation and has adopted ISO 14001. You have already experienced the monetary benefits of adhering to an environmental management strategy and you have made sure as many of your processes now reflect even further saving opportunities. You have ensured your customers understand they are now working with an ethically based supplier and, its been a highly lucrative strategy. Perhaps you have also gained some of those coveted, positive media headlines for your organisation.

You now run as clean a process as you can and you are continuing down this road, learning with the rest of those large organisations as you go. You offer your customers complete transparency of your organisation and its processes. Why not, you are confident they will stack up to scrutiny.

Here is the one I want you to think about. How long will you wait before asking for that same transparency from your own suppliers? After all, if they are not working to some kind of environmental policy what does that say about them or their processes?  What does it say about how much they care about their community or their workforce? Or, you the customer and your ethics – they must have seen those headlines – right?

Worse still, could this supplier actually damage your brand if it comes to light you buy from them. After all,  what you buy from them is now part of ‘your’ more ethical process.

We are safe, large organisations don’t buy from us

We come back to this argument and it’s true, of course, for most of the SMEs I speak to. However, I still need to hit home that if the first link on the supply chain is rattled won’t the effects continue to ripple through the chain. Will it stop before it reaches you? Are you prepared to take that risk?

It’s simply a matter of understanding your customer, albeit in a slightly different way than you have before.  It’s about asking different questions. Or, to be honest, it’s simply about reading their brochure or scanning their website and that way you may not even have to ask.

Going back to the term ‘risk’ I alluded to earlier – I would like to elaborate on what I actually meant by risk?

Let me plant a further scenario for you.  Let’s imagine an average Wednesday at 2.30pm in the afternoon.  The phone rings, it’s one of your most lucrative accounts and one you have worked hard to earn and even harder to retain for more than five years. “Do you have an environmental management policy,” they ask.  Your stomach turns over; you remember reading an article somewhere about the supply chain – you did nothing.  “It’s on the ‘to-do’ list” you reply.  “We’ve just been so busy.”

How do you expect this to play out?  Will they reply “we were only asking, after all, you’ve been a great supplier for five years, providing the best products and customer service.”  If that was the case – why would they be asking?

Whether you have now lost the customer, or not, you are now facing the prospect of other customers asking the same question. It’s time act to protect your business.  To shift your mindset. It’s time to look at this as a positive for your business too. Like so many businesses we meet day in, day out, we can promise the best outcome when you simply give in to this inevitability.

As well all know, playing catch up is far more expensive – in time and money – than putting a planned step by step strategy in place.  It just makes good business sense.

Just before I stop labouring the point

Are you on plan to grow your business? If so, it would be wise to consider environmental legislation and at what point you will need to comply.  Are you planning on tendering for business? A testament to the points I have been making already is the fact that tenders now feature your environmental policy. It comes back to transparency again – and the type of company those larger organisations choose to work with.

What does a step by step plan look like?

The good news is it’s not as daunting as you might think and, almost certainly, you will notice the enormous savings from a greener way of thinking – and operating within your business. No one is suggesting you install fifty solar panels on your roof – unless you want to, of course.  Or, go plastic-free in two weeks.

No one is expecting you to have all the answers, even the large corporations will admit they don’t have all the answers.  As we find through running our Expo new solutions are coming on board all the time.

It’s not really about having all the answers, or about how much you spend, it’s about demonstrating that your organisation is taking some kind of action.  That it cares enough to put the issue on the agenda. It’s addressing the fact that we do have finite resources – buying smarter and, therefore, reducing wastage. And, what does this mean – ultimately? It means saving money in the process.  I told you this was going to be a positive move, didn’t I?

The most important place to start?

Your team. You need your management team on board first and they need to understand exactly why you need them to scrutinise processes that have ‘always been done that way’. It’s good to remember that people respond well to being able to take ownership of something. In my opinion, it’s wise to also explain that you are completely open to what they might find and that you understand there may currently be processes costing more than they need to. For instance: Energy usage, unnecessary waste, water leaks etc. Why mention this? I can demonstrate areas where tens and even hundreds of thousands of pounds could have been saved yet never implemented, simply because team members did not have the confidence in those above them to admit the system is flawed.

Don’t go it alone – you don’t need to

Once you have made a commitment to future-proof your organisation and protect your position in the supply chain you will find you are by no means alone on this journey. There are support and networking groups and companies out there designed specifically to support you through the process.  There are dedicated Expos such as The Big Sustainability Expo held each October at the Hilton Ageas Bowl, Southampton. Free to attend and free to park, it’s a practical resource of products and education all under one roof.

Start looking at what other organisations are doing for ideas, or, better still contact them. Success breeds success and people love to share what they are proud to have done well.

Let’s wind back and look at your team again for a moment

How much do you value your team?  How much does your team value the company they work for? How important is it for them to work for a more ethical organisation or one with higher social values? The ones most likely to consider these values are the members of your team more likely to be motivated, dedicated and highly valued. And, if you shout about what you are doing, you may well attract others just like them.

I’ll leave that thought with you.

The benefits are not all about reducing your costs 

This is the time to shine. Make the most of this new strategy by shouting about it.  Firstly, build an environmental policy page (https://southernsustainability.co.uk/meet-the-team-2/

for your website, make it prominent – don’t bury it and keep it up to date.   Include each small success in your social media feed, PR, newsletters, brochures, leaflets and advertising.  Contact your customers and tell them what you are doing – don’t wait to be asked. Follow groups for more ideas – talk to people and to experts in your region who will be only too happy to help.

This movement has become a dynamic community – join it.

Why not become an influencer?

 Share each small success – it’s great for your business and for inspiring others. Put your company forward to present what you are doing at networking groups, chamber events and other business groups where being known for good practice will be great for attracting new business.

Make a real impact in your region by becoming an organisation that is not only known for great products and customer service – but for best practice too.

Summary

My hope is that your mindset will now change. That I have not scared the living daylights out of you – but helped you realise what a positive move this will be. If you are one of our invaluable pool of SMEs and, arguably the backbone of our economy, do act now and protect what you have worked hard to build. You will very soon find out this has the opportunity of becoming a huge advantage – an actual game changer for your company.

My advice is to take advantage of all the help and support that is out there, both locally, regionally and nationally.  Involve your management team and your staff.  There are smart ways to do this and it will mean the final outcome is far more rewarding. This is not a strategy meeting twice a year, it’s an item for the agenda at every meeting you have. Consider it alongside every process and every element of running your business because it has the ability to positively impact on them all.

This may not be a pool you are used to swimming in, but trust me when I say the water is fine and the natives are extremely friendly.

The Southern Sustainability Partnership

Organisers of The Big Sustainability Expo (Southampton) 2019

01202 971186

https://southernsustainability.co.uk/

https://www.linkedin.com/in/lyndadaniels/

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