Building a sustainable supply chain in emerging markets

Emerging markets across the world are clearly the next growth engines. As packaged consumer goods companies look to expand in these regions, they need to build supply chains that are agile and sustainable to tap this potential.

Servicing these emerging markets comes with its own set of challenges - the ever-changing regulatory compliances, the vast diversity of consumers, and the high organisational overheads. However, if we focus on improving sustainability and agility in the right manner, we can turn these challenges into profitable opportunities and build a sustainable brand. In my opinion, there are three important sustainability levers to grow profitably in emerging markets.

1. Strengthen the entire value chain

It is important to map and monitor the entire value chain for efficient use of resources. This includes upstream evaluation of suppliers, within-the-fence assessment of our own manufacturing operations, and audit of downstream fulfilment process with customers. Our experience indicates that eliminating inefficiencies in the extended supply chain not only saves cost, it also brings down carbon emissions in the value chain.

Agile supply chains synchronise supply with demand in a dynamic manner and eliminate the need to relocate excess stocks from time to time, thereby saving freight, obsolescence and environmental footprint.

2. Collaborate with partners

Making the extended supply chain sustainable is not an isolated effort by the company. The initiatives must look at the complete lifecycle impact of the product and collaborate with vendors as well as customers in the improvement journey. It starts with us sharing the sustainability assessment, initiatives and emerging green technologies with our partners. At the same time, we should also be open to learn from the partners' sustainability journey and incorporate their good practices in our operations. It's a two-way win-win effort.

When you build opportunities for collaboration, it benefits all. An even better approach is to establish a shared commitment with our suppliers, which can be immensely beneficial to address a key development issue in emerging markets. When we open up about our challenges, a lot of ideas emerge to innovate our products and services in a sustainable manner, which helps in building our brand with the local consumers and society to cater to the dynamic needs of the local market.

3. Be local

When we enter a new market, it is good to rely on local suppliers and subcontractors. Being local helps build trust for our brand, create opportunities for local entrepreneurs, and establish traction in the region. It even reduces our costs and environmental footprint as we transport and distribute domestically. Operating locally also helps in responding and complying with changing regulations in an agile manner. As our license to operate is taken care of, we can focus on innovation and strategic opportunities that can unlock value for all the stakeholders.

I am sure there are many other ways in which sustainable practices can drive profitable growth in emerging markets. We would love to hear your thoughts.