Discover effective strategies for implementing sustainability in supply chain management. Learn how to reduce your carbon footprint and create a more sustainable supply chain
Sustainability in Supply Chain Management
Sustainability in supply chain management today has become a standard feature for almost all business operational activities. It meets customer demand for sustainable practices while building a business case for improving operational efficiency, which enhances environmental conservation and reduces risk.
Read on to discover what sustainable supply chain management involves, the motivating factors behind the trend, the strategies and technologies involved, and the ways Standvast is setting the bar for new business models.
Understanding Sustainable Supply Chain Management
Sustainable supply chain management attempts to integrate environmental and social factors into all kinds of business activities such as sourcing materials, manufacturing, and distribution.
As a critical aspect of operations, sustainable supply chain management helps to deliver lower carbon emissions and waste, thereby reducing the impact the business has on the environment.
Key Components of a Sustainable Supply chain
A sustainable supply chain requires careful attention and adherence to three key components:
- Environmental Components: Focusing on all environmental factors, such as reducing an organization’s energy and material footprint, conserving natural resources, generating less waste, sustainable sourcing, and minimal packaging.
- Social Components: Ensuring that all employees are treated equitably and ethically through fair salaries, human rights, dignity, and protection, and providing healthy work environments.
- Financial Components: This entails cost control and knowing where the line is between making a profit and engaging in irresponsible behavior.
Being at the forefront of Supply Chain practice, Standvast embraces environmentally friendly practices as a core principle by reducing the carbon footprint of its operations throughout its supply chain.
Through our multi node fulfillment network we are able to reduce emissions by reducing the time delivery trucks spend on the road as well as better optimize routes to help reduce our carbon footprint.
The Business Case for Supply Chain Sustainability
Consumer demand for sustainable practices
Customers expect sustainable and green efforts in business operations and will buy more from brands that demonstrate or promise sustainable efforts.
Cost savings and efficiency improvements
When a company adopts the key components of a sustainable supply chain, operational costs shrink, efficiency soars, and the bottom line enjoys a hearty boost.
Regulatory compliance and risk mitigation
Organizations that integrate supply chain sustainability are better positioned, able to comply with regulatory mandates and mitigate risks effect
While tariffs are currently at the forefront of supply chain disruptions, they are just one aspect of the broader international fulfillment challenge. Businesses expanding internationally must also contend with various logistical, regulatory, and customer service obstacles.
Assessing Your Current Supply Chain Carbon Footprint
It’s important to understand your current carbon footprint before you can shift your supply chains to make them more sustainable. You’ll need to measure your carbon emissions and assess where improvements should be made.
Methods for Measuring Carbon Emissions
To track progress and set baselines, you need to be very clear on the level of your supply chain’s carbon emissions. Here are some best practices or actionable steps you can take:
- Take advantage of available tools and footprint calculators specifically designed for supply chains.
- The Greenhouse Gas Protocol (GHG Protocol) can be used to measure greenhouse gas emissions.
- Undertake a Life Cycle Assessment (LCA) to evaluate the environmental footprint of your product, from the extraction of raw materials to production, distribution, and use.
- Draw a detailed map of your supply chain showing how your product and materials move.
Identifying Key Areas for Improvement
Once you can clearly see the carbon footprint of your supply chain, you will know what needs to be fixed:
- Look at what practices within your supply chain contribute most to your overall carbon footprint.
- Assess the efficiency of your raw materials, packaging, machinery, and other equipment, including systems for heating, cooling, and lighting.
- Analyze your transportation processes and routes to discover opportunities for optimization.
- Understand the sustainability practices of your suppliers.
- Assess your waste management processes and packaging materials.
Standvast streamlines real-time updates, optimizes stock allocation, and intelligently routes orders for maximum carbon savings.
Strategies For Implementing Sustainability in Supply Chain Management
Sustainable Sourcing and Procurement
Choosing sustainable suppliers
Choose your suppliers carefully, selecting only those who have sustainability at the top of their list, those who use recycled and environmentally friendly products, and those who keep packaging to a minimum where possible.
Implementing green purchasing policies
Develop policies for sourcing and purchasing sustainable products and services. It is also important to set certain standards the suppliers must adhere to.
Choose fulfillment providers who are focused on reducing their carbon footprint.
Look for a provider like Standvast that is constantly striving to bring down the carbon footprint of its fulfillment process.
Sustainable Packaging Solutions
Use recyclable or biodegradable packaging materials, such as cardboard, paper, or biodegradable plastics, and go one step further by opting for some alternative materials – for example, plant-based or fiber-based.
Energy Efficiency in Warehousing and Distribution
Implementing renewable energy sources
Since distribution and warehousing operations always require large volumes of energy, an effective way of managing energy is by using renewable energy sources such as solar panels or wind turbines (wind power).
Improving building insulation and lighting
Besides implementing alternative energy sources, you can fix more adequate lighting system(s) and insulation strategies in your building. Use only the power-saving lights or some of them. Natural light is also the best lighting solution so use plenty of natural light.
Technology and Innovation in Sustainable Supply Chain Management
Technology is one of the important components that no sustainability planning can be without. This is something that Standvast knows and wields most effectively. The supply chain management application is a clear manifestation of our leading-edge technology in supply chain management that exemplifies how innovation can be a key driver of sustainability.
Here are some cutting-edge technologies that can enhance supply chain sustainability:
AI and Machine Learning for Efficiency
In many sectors, AI and ML are making headlines. For sustainability, AI helps incorporate what-if scenarios into decision-making, to address the burning question of reducing carbon footprint either in terms of time or cost.
Blockchain for Transparency and Traceability
Transparency and traceability are sought after in sustainable supply chain management, and blockchain technology is one of the key enablers that can accelerate this.
The Blockchain makes it possible to track sources of products and materials at every link in the supply chain – and make sure that all processes meet sustainability criteria.
Internet of Things (IoT) for Real-Time Monitoring
The Internet of Things is one such innovation that can be found in every enterprise, however, it is how you use the innovation to get there that counts.
Only in this way, with IOT providing real (and live) supply chain monitoring will you be able to achieve true sustainability. You will measure, in real-time, your energy, emissions, and environmental footprint, and keep them in check.
Standvast’s Supply Chain Technology
Collaborating for a More Sustainable Supply Chain
Partnering with Suppliers, Customers, etc.
No one person, or organization, is solely responsible for ensuring that the supply chain is sustainable. It’s a team effort. So, what actions can you take to ensure that your supply chain becomes and remains sustainable whilst reducing your carbon footprint at the same time? Everyone in the supply chain has a key role: the suppliers, the distributors, the third-party logistic providers (3PLs) as well as the customers. In order to achieve sustainability in the supply chain, you have to partner up with those who share, and implement, the same level of conviction (if not more) on eco-friendliness. You may partner up with:
Suppliers and Manufacturers:
Source from suppliers and manufacturers that embed the cornerstones of the sustainable supply chain
Logistics and Fulfillment Providers:
Joining up with third-party logistics and fulfillment companies who are ahead of the game, and who actively work to minimize their carbon footprint – such as Standvast – a third-party logistic provider that’s spearheading sustainable logistics and innovation with their own e-commerce fulfillment and supply chain tech.
Customers:
Work with your customers to get their views and expectations for sustainability.
Industry initiatives and standards
Engage in sustainability initiatives and implement corporate sustainability policies. Train your employees on sustainability goals and ESG policies. Comply with ESG frameworks Global Reporting Initiative [GRI] or the Carbon Trust Standard, etc.
Measuring and Reporting on Supply Chain Sustainability.
Businesses seeking to become more sustainable must collect the right data to do so, and reporting is needed to measure and determine the success of supply chain sustainability.
Key Performance Indicators (KPIs) for Sustainability
KPIs are good for measuring data related to sustainability. The following KPIs are useful for supply chain sustainability:
- Carbon footprint: Measures emissions directly or indirectly caused by companies.
- Waste generation: Measures the total amount of waste the company’s operations generate.
- Water footprint: Measures the total volume of freshwater used in the production of goods and services.
- Energy efficiency: Measures how much energy the company uses.
- Ethical sourcing: Examines the percentage of materials sourced from ethical suppliers.
- Social responsibility: Highlights members’ contributions to society and the community.
Sustainability Reporting Frameworks
Here are four commonly used reporting frameworks to report your sustainability initiatives.
- Sustainability Accounting Standards Board (SASB)
- Global Reporting Initiative (GRI)
- Carbon Disclosure Project (CDP)
- Task Force on Climate-related Financial Disclosures (TCFD)
The sustainability report showcases your business as one that values transparency and accountability.
Overcoming Challenges in Implementing a Sustainable Supply Chain
We must confront certain obstacles to make a sustainable supply chain possible, and many businesses lose their courage or go halfway when they face these obstacles.
Common Obstacles and How to Address Them
Some common challenges faced in the implementation of a sustainable supply chain include:
- Supply chain complexities
- High costs for sustainability initiatives
- Lack of an established sustainable framework
- Inadequate resources for implementation
- Non-availability of suitable technologies
- Regulatory compliance issues
- Lack of transparency across the supply chain
- Limited supplier engagement
How to address the obstacles
Addressing the obstacles associated with implementing a sustainable supply chain may seem daunting, but it can be done efficiently with the right approach or strategy.
- Keep your operations simple. Take one complexity at a time: instead of spending the time to solve the puzzle in one shot, take the time to diminish one complexity at a time.
- Conduct a cost-benefit analysis and determine where sustainability will provide greater long-term cost-savings.
- You don’t have to do it all: allocate resources to the areas that need them the most and then grow your sustainability efforts as you go.
- Harness new technologies including artificial intelligence (AI), the blockchain, and the Internet of Things (IoT) to achieve a more efficient, traceable, and transparent supply chain.
- Set up effective monitoring and reporting systems that will help facilitate compliance and the intent to keep your supply chain sustainable.
- Make sure your suppliers, distributors, and 3PLs are on the same page with you about sustainability goals.
The Future of Sustainability in Supply Chain Management
The future of supply chain management is now linked to sustainability, with good reason. Trends and technologies are changing the playing field.
Emerging Trends and Technologies
The trends and technologies below will pave the way for a more sustainable supply chain in the future:
- Sustainability as a prerequisite
- Sustainable risk management and resiliency
- Enhanced transparency in the supply chain
- Artificial intelligence and automation
- Customization and digitization
- Tech-enabled ESG decisions
- Rise of nearshoring and reshoring
- Data-driven sustainability management
Preparing for Future Regulations and Consumer Expectations
As sustainability becomes an increasingly important topic, regulations will become stricter and customers more demanding and sophisticated. Start preparing for regulatory changes by investing in sustainable energy resources, and emerging supply chain technologies. Plus, partner or link yourself with other businesses, suppliers, and logistic providers that focus on sustainable operations.
Conclusion
Adding sustainability components to supply chain management is a smart and ethical thing to do and it’s a recommended business strategy for today. By incorporating sustainable sourcing and procurement, green logistics transportation, sustainable packaging, and green energy that would reduce energy consumption in warehousing and distribution, you are minimizing your company’s carbon footprint, meeting customer demand and satisfaction, and ensuring the continued survival of your business
Connecting with Standvast, a pioneer in sustainable supply chain, is one of the best things you can do to have a real impact on sustainability and to make the world a greener place.
