Ten years ago, the word “sustainability” was a whisper when it came to business practices. Now, no matter what industry you’re in, sustainability is a focus, not an option. Not only have environmental regulations tightened up, consumers expect sustainable practices from the businesses they patronize. Maintaining sustainability throughout the supply chain is a balancing act between financial and environmental responsibilities. It requires participation at every level. The lifecycle of any consumer good presents opportunities for sustainability. Whether the product is sustainably grown produce or consumer electronics, environmentally sound practices not only save money by reducing waste and risk but translate into increased revenue and profitability. A major key to sustainability is eco-efficiency. Sourcing, Manufacturing, transportation, packaging: all provide opportunities for reducing waste and building value into products. Each step of the supply chain offers time-proven tactics to promote sustainability. They include:
Assist suppliers with managing impact and make sure they follow through over organizations goal for sustainability. The purchasing power held by consumer companies and retailers gives them significant influence over their suppliers’ business practices. Relatively few companies in the consumer and other sectors use that influence to get their suppliers to reduce sustainability impact, though that is changing. In recent years, consumer companies and others have adopted more sophisticated and effective methods for changing their suppliers’ practices. They have gone from disseminating codes of conduct, performing audits, and fielding questionnaires to helping suppliers design and implement sustainability programs that directly support the companies’ own goals. Campbell Soup Company, in collaboration with the Environmental Defense Fund, offers farmers technologies, guidelines, and products to help them optimize their fertilizer use and improve soil conservation. Digital technology has also increased companies’ ability to assist large numbers of suppliers. In 2014, Walmart launched a program to help thousands of its Chinese suppliers to make their factories more energy efficient through the use of an online tool. The program has enabled the average supplier to reduce its energy consumption by an average of 10 per cent. Unilever uses a software tool, developed with the University of Aberdeen, to collect data on whether farmers in its supply chain are using sustainable practices. Unilever offers them the tool for free, with the aim of procuring 100 per cent of its agricultural content from sustainable sources by 2020.
Manufacturing and Production
Some of the biggest steps towards sustainability can be made at the beginning of the supply chain. And while the creation of a zero-waste manufacturing process doesn’t happen overnight, in the end, it yields enough savings in time and money to make the process worth the effort.
The world of packaging is making leaps and bounds toward eco-friendliness, with smarter, recyclable, and more efficient materials. In food production, smart packaging allows materials to be tracked and sorted based on shelf life. Sensors are printed directly onto the materials used for protecting produce and can deliver critical insights that prevent spoilage. Smart packaging is changing the way produce is shipped and handled across the market. The packaging is probably the biggest challenge in achieving supply-chain sustainability. The use of recycled content yields positive results, but once a recyclable packaging is combined with non-recyclable materials — for example, a paper cup lined with plastic film — you end up with a product that’s headed for the landfill. In addition, recyclable packaging can be more expensive or provide reduced protection, which increases spoilage and overall costs. That’s where the balance between financial and economic responsibilities comes in. Countless options are available, so taking the time to work with suppliers can mean the difference between true eco-friendly packaging and something that’s destined for a landfill.
Logistics and Transportation
Most industry-wide advances in supply-chain sustainability today are focused on logistics. Software suites for routing can ensure maximum efficiency, resulting in less mileage, fuel burned and emissions. Proper maintenance of vehicle fleets is another key to supply-chain sustainability. Every aspect of a fleet’s maintenance program is an opportunity to waste less. Fleet operators have the option of recycling old oil and used tires. Both are not only sustainable practices but can lead to positive financial returns as well. Proper fleet maintenance not only keeps vehicles on the road longer, but it also leads to fewer CO2 emissions and less pollution overall. Maintaining an efficient and eco-friendly fleet is a critical aspect of sustainability in the supply chain.
The opportunity for achieving sustainability doesn’t end when a product has been manufactured, shipped and delivered. Retailers can offer repair and take-back programs, or facilitate donation options to divert material from landfills. In the case of food products, recycling options such as composting are available for excess, spoiled or expired products. Retailers often create intricate backhauling programs that not only optimize otherwise empty trucks, but also serve as a means for the collection, sorting and pre-processing of recyclable materials into one centralized location. Such services increase the probability that they will actually be recycled as raw materials. Organization have to more and more think as cradle to cradle than cradle to grave traditional logic.
Most industry-wide advances in supply-chain sustainability today are focused on logistics. Software suites for routing can ensure maximum efficiency, resulting in less mileage, fuel burned and emissions. Proper maintenance of vehicle fleets is another key to supply-chain sustainability. Every aspect of a fleet’s maintenance program is an opportunity to waste less. Fleet operators have the option of recycling old oil and used tires. Both are not only sustainable practices but can lead to positive financial returns as well. Proper fleet maintenance not only keeps vehicles on the road longer, it leads to fewer CO2 emissions, and less pollution overall. Maintaining an efficient and eco-friendly fleet is a critical aspect of sustainability in the supply chain.
It’s never too early or too late. The path to change starts with conversations about what you want and can achieve. Ask your teams to think how they would do things if all the traditional model rules went out of the window. Start anywhere and be agile – don’t wait for the perfect opportunity.