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Sustainable supply chains

What are supply chains? a destination with more local colour and more to do –
creating a market advantage for new and repeat business
This section can Hotels, airlines, cruise ship and tour operators all rely on
the potential for lower operating costs through
be pulled out and suppliers of goods and services in order to provide their own
more efficient use of energy and water resources and
guests, passengers and clients with the services they
kept separately and reduced waste
require. The process involves millions of individuals and
will build up risk reduction by avoiding suppliers with a doubtful track
businesses all acting as links in a ‘chain’ to provide their
into a practical record on environmental and social issues
customers with what they need, the ultimate customer
and comprehensive better relationships with suppliers giving improved
being the end-user (see chart one). Supply chains in the
reference guide loyalty and service
tourism industry (particularly for tour operators) are often
a better relationship with the community whose
on how to manage more complex than in other sectors. These pages bring
economy you are supporting
environmental together recent industry work, most notably by Richard
increased security of supply of the goods or service
impacts at your hotel. Tapper of Environment Business Development Group and
through long-term contracts and a better negotiating
Xavier Font at Leeds Tourism Group on how to manage
position (i.e. increased purchasing power)
tourism supply chains effectively.
the ability to demonstrate to all your stakeholders the
importance you place on sustainability issues.
Why are they important? Your suppliers may be concerned that a SSCM programme
Products and services can have negative environmental may impact negatively on their bottom line. However, this is
and/or social impacts depending on the business practices not necessarily the case. A report conducted in 2001 on
of the companies producing and supplying them. At the suppliers’ views on effective supply chain environmental
same time, purchasers of goods and services can have management strategies1, concluded that for the majority of
considerable influence through their spending power, by participants (14 companies) environmental initiatives driven
using the procurement process to make their supply chain by customers had a positive effect on their bottom line. Nine
more sustainable. This process is known as sustainable companies said the initiatives had not impacted their bottom
supply chain management (SSCM), supply chain line and only two said they faced a negative impact.
‘engagement’ or ‘greening’ your supply chain. It can
address socio-economic issues such as local poverty and Where to start
exclusion as well as environmental impacts and might
include for example: 1. Engage your business
sourcing more products and services locally to Supply chain management should be fundamental to the
encourage local business, provide ‘authenticity’ and cut company’s overall philosophy and policy regarding
down on transport energy sustainability and should underpin its responsible business
sourcing products with less environmental impact in objectives. You will need to:
their manufacture, use and disposal a) have a clear sense of what you want to achieve through
buying products in bulk and reusing packaging the programme and motivate everyone so they are
importing only ‘fair trade’ products behind it
ensuring that suppliers adhere to safe and ethical b) evaluate your suppliers against your policy on a
working practices. continuous basis
Choosing on the basis of the lowest cost provider is not c) set priorities and act on the policy by integrating it into
necessarily in the best long-term interest of your enterprise. your procurement activities.
The benefits to be gained from more sustainable supply Assemble a team of people from all relevant departments,
chain management include: particularly staff responsible for purchasing and restocking.

chart 1: Components of tourism supply chains

WHO SHOULD *Tour operating includes advertising, purchasing,

READ THIS? package development, marketing and sales and
purchasing. *Ground operations include ground
✓ Hotel general transport and excursions.
managers Tour operators contract suppliers to provide
✓ Staff responsible some of these components directly;
others are obtained by suppliers and
for procurement and
their suppliers. All suppliers providing
component goods and services that go
✓ Quality/EHS and into delivery of a tourism product are
sustainable business part of the supply chain for that product.
✓ HR or departmental
© Richard Tapper, Environment Business
& Development Group, 2003
managers responsible Source: Tourism Supply Chains – Report of a Desk Research
for training Project for The Travel Foundation by Leeds Tourism Group at
Leeds Metropolitan University, UK

Suppliers’ Perspectives on Greening the Supply Chain, produced by Business for Social
Responsibility Education Fund, June 2001
greenhotelier january 2006 theknow-howsection 1

RESOURCES You might invite key suppliers to participate in the policy

and planning stages.
Practical Guides to Good Practice: Communicate your aims and objectives in order to achieve
Managing Environmental and Social ‘buy in’ from all staff and management.
Issues in the Accommodations Sector Appoint a member of staff who will act as the central
and co-ordinator for the programme.
Managing Environmental Impacts Determine whether external stakeholders should be
in the Marine Recreation Sector involved – for example local authorities for waste collection
and Self Assessment Check-list and disposal. CASESTUDY
supply_chain/supply.htm Adopt a farmer
2. Create a supply chain policy
Boosting procurement from In Tobago The Travel Foundation has been working with
local businesses Develop a policy statement that explains your vision the Hilton Tobago and the Mt. St. George Farmers
web: and can be understood by suppliers and staff. Prioritise it Association to pilot their ‘Adopt a Farmer’s Group Project.’
propoor_ tourism/publications/tools& into the issues that are most important for your company. Forging greater links between the agricultural and
tips/procurement.pdf Discuss the policy with staff and invite their input for tourism sectors will decrease dependency on imported
how best to implement it throughout the business. produce. So far, seven farmers have been involved in
Business Guide to a
List all the goods and services that you buy in. supplying the hotel with over TT$80,000 (over
Sustainable Supply Chain
web: Identify opportunities to improve the sustainability of these US$12,700) worth of local produce. Consistent demand
supplychain/content.asp?id=237 goods and services. If you are unsure about how to do this, has enabled the farmers’ association to increase
consult with suppliers and similar companies who may have production. The plan is to involve more farmers and
Greening Your Business: hotels in making this an island-wide initiative.
been through the same process.
A Primer for Smaller Companies
web: moreinformation
greenbizchecklist.pdf 3. Establish a management system
Develop strategic goals to aim for so you can integrate the Tess Forgan tel: + 44 (0) 117 927 3049
Green Travel Market
web: programme into your business. email:
Agree on the targets you wish to achieve, linking these to
Making Tourism Count for the Local
Economy in Dominican Republic: your policy. These should be SMART2 (specific, measurable, to attain. Bear in mind the different kinds of suppliers
Ideas for Good Practice achievable, realistic and time-specific). involved and your local conditions.
web: Select a sample of suppliers for assessment (based on Set up a database so that information can be accessed
DomRepguidelines.pdf type/spend/scope for improvement/risk etc). internally and used easily by all team members. This
Prioritise the list into areas and timeframes so that the should be integrated with existing databases such as
Supply Chain Engagement for Tour
exercise is split up into manageable sections. environmental, health and safety (EHS) or purchasing.
Operators – Three Steps Toward
Establish standards against which you can evaluate
suppliers. You should identify a minimum level of
acceptable performance and the level you wish suppliers 4. Consult with and assess your suppliers
Explain the policy and what you are aiming to achieve to
Suppliers’ Perspectives on Greening your suppliers. Visit them and let them visit you. Use
the Supply Chain CASESTUDY
face-to-face meetings, briefing sessions and workshops
TOI Performance Indicators rather than sending impersonal letters or emails. Your
In 2002 the Tour Operators' Initiative for Sustainable commitment to the programme will be judged by the
The Business of Enterprise – effort you put into it.
Tourism Development (TOI), in co-operation with the
Meeting the Challenge of Economic Establish levels of awareness among suppliers of the
Development Through Business and
Global Reporting Initiative (GRI), launched a ‘sector
supplement’ to the GRI 2002 Sustainability Reporting environmental and socio-economic issues relating to their
Community Partnerships products and services, challenges, threats and
web: Guidelines to provide indicators for assessing tour
operators' performance. The supplement applies only to opportunities for success.
businesses dedicated to organising holiday packages. Be clear about the information you are gathering from
Tour Link Project Sustainable Supply them and how you intend to use it.
Chain Management Guide Forty-seven performance indicators measure success in
Conduct a baseline assessment3 of your suppliers, taking
web: addressing the environmental, economic and social
impacts of their business operations. The indicators are into account:
Tour Operators Performance Indicators grouped into five categories that reflect the life cycle of a) qualitative performance aspects (either in the form of
web: the holiday product – from the planning stage to the yes/no responses or on a sliding scale of values
reporting/documents/TourOperators development and delivery of the product – and include (say -3 for poor and +3 for good)
SupplementNovember2002.pdf 16 indicators for supply chain management. These cover b) quantitive data such as performance data for
Tourism Supply Chains – policy, screening criteria, consultation, implementation, energy/water consumption, waste etc.
Report of a Desk Research Project support, progress monitoring, statistics on percentages of Evaluate the information you have collected and establish
for The Travel Foundation suppliers subject to the policy and participating in the which of the suppliers are most significant in terms of
web: www.thetravelfoundation. programme, actions taken, contracting policy, incentives, having above or below average performance in relation to joint initiatives for improvement and benefits for the your standards.
Chains.pdf contracting organisation. If a supplier does not meet your criteria, ask whether they
Working with Suppliers for Sustainable can supply a suitable alternative product or modify their
Development – Tour operator moreinformation service at a similar cost.
practices and recommendations Helena Rey tel: + 33 1 44 377 638 email: Find out how your suppliers select their suppliers so that
web: you can examine further along the supply chain and develop
the/WORKING_WITH_SUPPLIERS.pdf a fully sustainable supply chain in the future.
As defined in ‘Supply Chain Engagement for Tour Operators – Three Steps Towards Sustainability.’
See Tour LinkProject, Sustainable Supply Chain Management Guide.
2 theknow-howsection greenhotelier january 2006
Supplier Meets criteria? By Person Date Follow up Target
Company name (Excellent/very good/ fair/ Action required Cost
type poor/unsatisfactory) when? responsible achieved required date

Work with supplier to

Ecofriendly Further staff
Cleaning reduce quantities required.
Cleaning Good 3/4/06 John Doe 6/4/06 training in two 6/6/06 £250.00
chemicals Install automatic dosing
Chemical Corp months’ time

Cannot modify
Investigate whether they
Cleaning Chemical formulation.
can supply alternative
Solutions Poor 16/2/06 Pedro Pérez 16/02/06 Investigate 3/4/06 nil
floor cleaner or modify

chart 2: Example of a simple supplier action plan

b) making the best performers your preferred choice when

5. Define your work programme contracting
You will need to draw up a programme of work based on c) giving additional promotion to suppliers that have made
the results of the supplier assessments (see chart 2). significant improvement
This should include: d) longer-term contracts offering them greater security.
a) a timetable
b) a budget
8. Incorporate the policy within your
c) an estimate of the influence on the company
d) details of who is responsible for what. suppliers’ contracts
Prioritise the action plan to focus on groups of suppliers, The ultimate aim is to integrate sustainability criteria
such as those that have the greatest impacts. into your purchasing and contracting procedures to
You might want to concentrate first on the things that are support your overall sustainability objectives.
easiest to change and/or are without cost. Agree on the internal approach and procedures required
for drafting clauses in contracts, ensuring that all legal
6. considerations are properly covered. You may need to
Monitor and report on progress train your staff on contracting procedures for
Define indicators for monitoring the performance of your sustainability issues.
suppliers against the standards you have set. In rewriting contracts to address sustainability issues,
Meet regularly with suppliers to assess progress and set minimum baseline requirements that all suppliers
anticipate problems. must comply with (such as having their own policy for
Communicate results internally, recognising everyone’s socio-economic and environmental issues).
input to maintain awareness and commitment. Set additional milestones that suppliers can aspire to
If you are reporting publicly through a sustainability which are realistic and achievable. Link their
report or within your annual report, communicate the achievement into incentives (as outlined in section 7).
results to suppliers first. Incorporate supplier sustainability progress reviews into
Create a system whereby you are able to assess and your existing supplier review process.
verify suppliers’ stated sustainability performance. This Agree on the mechanisms to be used when suppliers fail
might be through special visits by members of the team to meet requirements. Depending on the seriousness of
to audit progress. the issue, these may range from identifying additional
technical support to the suspension of their contract.
7. Support suppliers in achieving If you do have to suspend a supplier, revisit the
your goals situation in a few months’ time to see whether they have
taken corrective action.
Maintain awareness by encouraging and communicating
Allocate responsibilities for updating standards, support
feedback to and from suppliers.
materials and databases and co-ordinating training – both
Provide information so that suppliers can develop their own
internal communications.
Partner with external organisations such as local or CASESTUDY
regional business associations and training institutes who
can reinforce your efforts through their own programmes. Hilton International
Assess whether any suppliers require technical support or Scandic introduced its Suppliers Declaration in early
advice on relevant legislation and set targets for 2003, following many years of non-formal dialogue with
improvement. its suppliers. Since then the company has had extensive
Identify with them appropriate actions and solutions. This discussions with its 30 largest suppliers in the Nordic
might include running in-house workshops or identifying region on how to take sustainable production and sourcing
external specialists who can provide further training. to the next stage. Results achieved so far include
In encouraging small local businesses, make sure you ecolabelled beds, soap and TV sets (Type 1 Nordic Swan
understand the issues that stand in the way of their ecolabel) and, in Sweden, organic coffee (where 70 million
success. For example, small, start-up enterprises may not cups have been served since 2001). The declaration is also
have working capital and may need paying in cash on used at hotel level in securing local suppliers. During
delivery. They may need help to promote their services or 2006 a global supply chain monitoring system will be
showcase their products to customers. introduced within Hilton International taking the current
Recognise and reward suppliers for their sustainability Hilton and Scandic systems to the next level.
improvements in order to maintain momentum and
support for your programme. This can include the provision moreinformation
of incentives such as: Jan Peter Bergkvist tel: + 46 709 73 59 63
a) special events for suppliers where the better performers email:
are showcased to inspire the others

greenhotelier january 2006 theknow-howsection 3


MOREINFORMATION for suppliers and staff. You will also need to identify
individuals responsible for co-ordinating the monitoring, Pro-Poor Tourism Partnership
ANVR: Dutch Tour auditing and verification processes and providing
Pro-Poor Tourism (PPT) is an approach to tourism
Operator Association progress reports.
development and management that enhances the linkages
email: between tourism businesses and poor people, so that they
web: 9. Tips for success are able to participate more effectively in tourism product
Environment Business Communication is the key to success. Be regular, clear, development. All kinds of links with 'the poor' need to be
Development Group straightforward and transparent in your communications considered: staff, neighbouring communities, land-holders,
email: both with suppliers and internally.
producers of food, fuel and other suppliers, operators of
Ensure that your policy is reflected in your purchasing
Global Reporting micro-tourism businesses, craft-makers, other users of
decisions or it will undermine the credibility of your
Initiative (GRI) tourism infrastructure (roads) and resources (water) etc.
programme with suppliers.
web: Aim for an inclusive rather than exclusive approach – The Pro-Poor Tourism Partnership (PPTP) has
International Centre for i.e. do not ‘drop’ suppliers immediately if they do not meet successfully proved in The Gambia, South Africa and in
Responsible Tourism your standards, but look to help them comply with your the Caribbean that sustainable supply chain management
web: www.theinternational requirements and ultimately raise sustainability levels can play a vital role in alleviating poverty in tourism throughout the supply chain. destinations, particularly through mechanisms such as
Do not be over-ambitious. Work with a few suppliers at a marketing and technical support for local businesses,
Leeds Tourism Group time for continuous and measurable improvement rather
changes in procurement strategy, or direct financial and
web: than overnight transformation.
training inputs. Agricultural linkages for example, have
Remember that you may be able to learn as much (if not
Supply Chain Forum enabled local suppliers to provide fresher produce
more) from your suppliers about sustainability as you are
web: involving fewer ‘food-miles’ and distinctive food and
able to tell them.
Sustainable Travel International Understand that suppliers may have different priorities recipes, helping to stimulate culinary, agro-herbal and
web: and/or capacities for improvement and may not be able farm-based tourism and provide more authentic and
to improve at the same rate. memorable experiences for visitors.
Tour Operators Initiative When you are piloting new suppliers, ensure that your
for Sustainable Tourism critical needs are not threatened. moreinformation
Development (TOI) If using certification schemes as a means of identifying
web: Harold Goodwin email:
sustainable suppliers, check that their standards and criteria
are in line with the objectives of your policy.
Ensure that any sensitive or confidential material in your
supplier database remains confidential.
Where insufficient numbers of suppliers are able to meet
your minimum requirements, consider working with
competitors and local tourism associations to help raise Tour Link Project
overall standards within the destination and to create a The Tour Link Project established an EU-standard for a
greater pool of suppliers to draw upon. Sustainable Supply Chain Management System for tour
Monitor the response and enthusiasm of suppliers and operators, which includes various common tools such as
identify successes and difficulties so that each year you a management guide, a multi-lingual training website
can improve the process. and benchmarking and self-assessment tools. The
system is currently being implemented by 250 European
CASESTUDY tour operators. Tour Link also established common tour
operator suppliers’ (of, for example, accommodation)
European supply chain tool sustainability checklists and online assessment systems
to be linked with sustainable tourism certification
Following completion of a pilot process, the UK
systems such as the EU Flower for accommodation and
Federation of Tour Operators (FTO) will launch their
the VISIT ecolabels. The tools and the suppliers’
Supplier Sustainability Code in the first quarter of 2006.
We would like to thank assessment system will be piloted in Austria, Catalonia
This is a practical guide for suppliers to the package travel
the following for their and Costa Rica.
industry on how to minimise negative impacts on the
help with this guide: environment and maximise social and economic benefits The project, which began in 2004, is being funded by
Xavier Font, to local people and communities. EU-LIFE and is due for completion in 2007. Partners
Leeds Tourism Group include the Dutch tour operators’ association ANVR and
The code, which has taken two years to develop and
Naut Kusters, Tour Link involved broad international multi-stakeholder the UK Federation of Tour Operators (FTO), Leeds
Tom Selänniemi, consultation, has been adopted by the European Union- Metropolitan and Lund Universities, the Austrian and
Aurinkomatkat-Suntours funded Tour Link Project as an important tool within the Catalonian Ministries of the Environment, the Dutch
Richard Tapper, Environment recently-adapted European Supply Chain Management Alps Platform, the Royal Awards for Sustainability
Development Group System for tour operators. and ECEAT-Projects.
Every attempt has been made
to ensure accuracy, however moreinformation moreinformation
ITP cannot accept any Chris Thompson tel: + 44 (0) 1444 457900 Naut Kusters tel: + 31 20 465 1318
responsibility for actions email: email:
based on this information.

4 theknow-howsection greenhotelier january 2006