Ethical sourcing is a growing trend among businesses around the world. Customers today want to know where the products they buy come from and how they are made. This has given ethical sourcing an extremely important role in the total sourcing of products within the supply chain of numerous companies. Here are four ways ethical sourcing can be beneficial to your business.
One of the benefits of ethical sourcing is improving the reputation of the brands your business produces. Just over two-thirds of shoppers in the USA and around one-third of shoppers around the world prefer to buy ethically sourced products. This is due to the positive environmental and social impact ethical sourcing has on the total sourcing management systems within companies. Committing to brands that utilize ethical sourcing will boost your company’s reputation online and in physical stores.
You can extend this brand boost to the suppliers you collaborate with. You need to make sure that your suppliers adhere to the ethical sourcing standards of your company. This can be achieved by providing suppliers with the tools and guidance they need to align their practices with yours. This will build trust between you and your suppliers and ensure your products are safe to use.
Increase Market Shares
Several ethically sourced products made from organic, renewable, or recycled materials have an extremely loyal customer base. Aligning your products and services with customers who value sustainable business practices can increase your company’s market share and group total sourcing goals. One way to introduce your business to new markets is by partnering with a local charity or volunteering at a philanthropic organization. This partnership will enhance your business’s credibility among customers interested in ethically sourced products. You can also get referrals from the charity or organization that will help you increase market shares so your business can grow.
Investing in a total sourcing concept that includes ethical sourcing of brands, products, and services can drastically lower your company’s operating costs. You can start by making offices and production spaces more energy efficient. Use energy-saving light sources, improve insulation, and eliminate wasteful steps and processes within production.
These total sourcing solutions help reduce long-term costs by allowing your company access to environmentally friendly materials. You can get ethically sourced materials and products from local vendors. This will reduce shipping and transportation costs and stabilize the chain of supply within your business.
Transparency and accountability are major components of your supply chain. Members of your supply chain need to understand what they are doing. There should be measures in place so you can ensure each member is adhering to the ethical sourcing standards your company has in place. One way to uphold accountability is to get supply chain members registered in the Supplier Management Software. Registered members can read reports on their effectiveness, productivity, and compliance to the ethical sourcing standards of your company.
You can extend these efforts to new hires. New employees are highly enthusiastic about supporting ethical sourcing standards. Start looking for people who will support these initiatives during the first interview and nurture that attitude throughout their employment. When your employees are as passionate about ethical sourcing as you are, your company will succeed beyond your wildest dreams.