Supplier Sustainability Index – Understand It and Improve Your Score

Has your distribution business started to grow? If so, you’re expanding your customer base and may start distributing to companies who are rating their suppliers based on a Supplier Sustainability Index or Scorecard.

Don’t hesitate! Examining and revising your business operations, suppliers and supply chain based on these sustainability index criteria can help increase your potential sales channels and client base. It can also help you cut your operational costs and improve profits!

As a distributor you control a large part of your own and your customers supply chain. The supply chain and manufacturing processes contain the largest portion of actions which impact the environment and decrease sustainability.

What is the Supplier Sustainability Index?  

The Supplier Sustainability Index (SSI) has been developed by a group of global companies, the World Resources Institute, the Sustainability Consortium and many others. These indexes and scorecards measure and track improvement in a company’s energy, water use, recycling, and reduction of hazardous materials, overall waste and greenhouse gas production.

Several examples of scorecards in use by some of the world’s largest business are Walmart and Proctor & Gamble. Walmart has increased its use of the index from 18 categories in 2012 to using its index to rank suppliers in over 700 product categories.

Next Action Steps to Become Sustainable

• If your goal is to be a supplier to one of these companies, you should start examining how to collect the data required to complete a scorecard for your current operations and facilities.

• If you are already a supplier to a company with a SSI, check on when your product category will be included in their program.

• If your company is already collecting data and reporting to your customers on your sustainability data, create an internal initiative to examine processes and suppliers for ways to improve your score.

How to Start Creating or Improving Your SSI

Take a look at the data in your Enterprise Resource Planning system and look for areas where you can improve your current rating.

Financial reports can show if quick improvements might be possible in:

• Utility Bills – electric and water usage or waste disposal reduction
• Packaging and Paper costs – change to recycled products or providers
• Transportation – fuel costs, change to a sustainable provider, or implement direct ship programs

Does your current ERP reporting capabilities support collecting and analyzing this data?

Socius’ Distribution 20/20 program can show you how upgrading your ERP can improve your sustainability data collection and many other aspects of your business.