Supply Chains – How would you count the cost?

What could your supply chain cost you?

What could your supply chain cost you?

Green Hotelier Talking Point: Supply Chain - what's the cost?

Our Talking Point for February, tying in with Fairtrade Fortnight, takes a look at supply chain issues. Introducing our theme for the month, ITP's Head of Programmes asks, can you afford not to investigate your supply chain?

By Fran Hughes, Head of Programmes, International Tourism Partnership.

This month our Talking Point on Green Hotelier is supply chain. Everyone has one, but how much do you know about yours?

These days few companies would dare to attempt to absolve themselves of responsibility for negative impacts in their supply chain by claiming these were the responsibility of the supplier. When factories producing garments in Bangladesh have collapsed, or horsemeat has been found in beef burgers, the finger has been firmly pointed at the brands selling these products. How could these companies not know - or make no effort to discover - how their products were produced and sourced?

The apparel industry – oftentimes the unfortunate ‘poster boys’ of supply chain issues on account of claims of poor working conditions and child labour – has gone a long way over the last decade in addressing issues in the supply chain. Forums such as the Sustainable Apparel Coalition and Ethical Trading Initiative have helped support these businesses in understanding their complex supply chains and, whilst there is clearly still work to do, some steps the industry has taken have been transformational.

In 2013 Puma published the first ever Environmental Profit and Loss Account; a truly pioneering attempt to put a cost on the impact a business has on the environment across its supply chain.  In 2010 Nike produced an interactive map showing factory level data and worker conditions to increase transparency in the industry. Speaking at the World Economic Forum at Davos last month Nike Inc. VP of Sustainable Innovation, Hannah Jones, stressed the need to collaborate to bring about lasting and meaningful systems changes to address rising energy costs and environmental concerns going forward.

How long will it be before the hotel industry comes under greater scrutiny? Would it be the same kind of publicity the apparel industry has seen, or is it simply more obvious to question the real cost of a £4 pair of jeans than the social and environmental impacts of a hotel stay?

However, with the sheer volume of products and services a hotel procures, the potential to be called to account on a supply chain issue is real and could happen in pretty much any product or service used: deforestation from furniture, construction materials, beef and tissue products? Forced labour or poor labour conditions in your subcontracted labour supply or the products you buy? Find these and the risk to reputation and profit is real.

The supply chain for a hotel may be complex but it is not uniquely so – many other companies have complex supply chains too. There is a moral and business imperative to take action to work through the tiers to ensure your supply chain is healthy. To help hoteliers understand and act on supply chain issues, Green Hotelier has produced several Know-How Guides to help hoteliers, from a general introduction to the principles of sustainable procurement to more specific product information, from food, to FF&E and flooring. Just visit our Themes / Supply Chain for a whole host of resources and great case studies.

Larger companies may have opportunities to work on supply chains through their greater buying power with suppliers; smaller companies or the individual hotel can often take advantage of more direct relationships with suppliers and easier local sourcing. Even something as simple as switching to fair trade coffee or FSC certified wood and paper products is a start.

Wherever you are on the scale you have the power to reduce the social and environmental impacts of your business through learning about your supply chain, engaging with suppliers and sourcing more sustainable products. Remember, it costs more to manage the media than to do the right thing.

 

Leave a Reply