Supply chain

Hallmarks of a leader in supply chains 

  • Sustainability is integrated into supply chain management and is a standard performance measure alongside other buying criteria, such as cost and service level.
  • Buyers demonstrate in-depth knowledge of sustainable development, own key corporate sustainability targets and drive improved sustainability performance through the value chain.
  • The organisation collaborates with suppliers to share best practice, improve standards and stimulate innovation across the whole sector.
  • Procurement teams work closely with other departments to find ways to raise the sustainability performance of the supply chain. Procurement professionals influence design and development processes through advanced knowledge of sustainability options in the supply chain.
  • Long-term contracts are in place to enable investments along the supply chain to improve sustainability performance.
  • The organisation is using appropriate channels to reach beyond first-tier suppliers and push for performance improvements all the way down to first point of delivery.

Case studies

 

With around 500,000 product lines sourced from over 5,000 different suppliers worldwide the John Lewis Partnership (JLP) has a challenge in ensuring sustainability is integrated throughout its supply chains.

The Partnership’s links with suppliers have always been strong and the Responsible Sourcing Programme includes continual monitoring of suppliers, as well as the provision of advice and information about how to meet and exceed performance criteria for labour standards, worker welfare and, more recently, environmental management. JLP has recently developed a Responsible Sourcing Workbook designed to help suppliers better understand it’s Code of Practice and the complex issues of ethical sourcing.

In addition to the Workbook, JLP provides supplier manuals, direct helpdesks to help suppliers with Sedex registration and runs supplier workshops and conferences.
JLP has also addressed its operational supply chain, and launched a sustainable construction framework together with Forum for the Future in 2007. The framework is designed to ensure that JLP adopts sustainability principles in the planning, design, construction and operation stages of all John Lewis and Waitrose building and refurbishment projects.

Waitrose has an excellent track record on its supply chain – leading the industry with its goal to have 100% of its conventional fruit, vegetables and horticulture supply base LEAF accredited by 2010 and gaining top marks on fish and farming practices in the 2007 National Consumer Council report on retail sustainability.

On fish, Waitrose will not sell any species believed to be endangered or under threat from over fishing. Using the least environmentally damaging methods, Waitrose sells the largest range of line-caught fish on the high street and was the first supermarket to only sell line-caught fresh and smoked cod and haddock. It has also switched to selling only mature plaice and lemon sole caught by non-beam trawling fishing methods.

JLP’s strong supplier relations help share best practice principles; raising the overall quality throughout the supply chain, enhancing brand loyalty and trust.


Cafédirect is the UK’s largest Fairtrade hot drinks company. It works in partnership with small-scale growers across the developing world, providing long-term price stability and income security in an unstable commodity market.

The company operates a Gold Standard trading policy that goes beyond basic principles set out under Fairtrade Mark standards. The Gold Standard includes a producer partnership programme through which Cafédirect reinvests the majority of its profits into bespoke support programmes.
The company actively engages with grower organisations to support sustainability, offering advice, market information and management training to help grow producers’ businesses. In addition to the Gold Standard trading policy, Cafédirect issues contracts early and so provides collateral that enables pre-financing from financial institutions. This provides farmers with capital to help create long-term stability.

Another characteristic that takes Cafédirect beyond other Fairtrade organisations is its long-term relationships with its business partners. In over 17 years of trading it has never ended a relationship and has consistently provided support to help its growers to recover from natural disasters.

Fair Trade and ethical sourcing practices have made their way into the mainstream commercial market. Marks and Spencer and Pret A Manger now stock only Fairtrade tea and coffee. Sales of Fairtrade products have grown by 50% in the past five years. It makes clear business sense to be involved with ethical practices.

Supply chains are often seen as the weakest link in corporate sustainability programmes. Impacts are difficult to measure and manage, as companies have little or no direct control.

In an effort to improve understanding of the impacts and engage suppliers, the Carbon Disclosure Project (CDP) launched an initiative called the Supply Chain Leadership Collaboration in October 2007. It invited businesses to join as members and use the CDP process to help measure their total carbon footprint, including that of their suppliers.
The CDP is a well-known and respected standard for carbon disclosure. It is backed by some of the world’s largest institutional investors, with combined assets of $57 trillion.
Companies such as Wal-Mart, Cadbury, Tesco and Unilever are members of the collaboration and have started to take steps towards understanding, managing and ultimately reducing their full carbon footprints.

Participation in the project allows companies to contribute to the development of a standardised, global greenhouse gas emissions reporting process and to engage with suppliers to identify improvement and innovation opportunities.

Demand for organic milk is growing by 30% each year, and whilst organic milk commands a price premium at the check-out, farmers are deterred from converting to organic by the two-year timescale and associated costs. Sainsbury's Farm Promise scheme invests in these dairy farmers to ensure their long-term economic security and to guarantee an organic milk supply.

Farm Promise supports suppliers through the long conversion period, covering all costs associated to conversion and guaranteeing a 12-month organic contract post conversion. The commitment to a minimum contract of three years and three months represents the longest-term milk contract between retailer and farmer in the industry. Customers choose to support these farmers through a 5p on pack contribution that significantly contributes towards the farmer's costs.

Developed with the support of the Soil Association and Organic Farmers and Growers, Farm Promise was the first scheme of it's kind to be launched, a number of competitors including Tesco, have since launched schemes to support their own organic supply chain. The first Farm Promise farmer finished conversion under this scheme in  October 2006. 9 million pints of Farm Promise milk have been sold since the launch of the programme and £350,000 has been paid to farmers to date.