7 Provide Chain Sustainability Practices Your Industry Can Use Proper Now
Here’s a not fun fact: Our world is hotter, more polluted and harbors more trash than ever before, and traditional supply chains aren’t helping. Logistics companies like FedEx, UPS and UEDI create more gas emissions than 7 million cars. Plastic packaging for delivery items makes up 36% of all plastic production. And 46% of business processes are still manual, and many largely rely on paper, which is the largest contributor to landfills by weight.
Here’s the great news: Supply chain sustainability has been steadily gaining traction for the past few years. Electronic, automated processes, paired with intelligent designs and circular supply chain strategies, are helping to reduce carbon emissions and waste from business transactions.
Many large corporations are already taking the lead by committing to reduce their carbon emissions, increase recycling, and eliminate waste. So how can your business join in and help reduce our carbon footprint? By creating aggressive goals and using the strategies below, you can help create a more environmentally friendly business that operates efficiently, saves on costs, and can even increase your profitability.
Getting Started with Supply Chain Sustainability: Create a Supply Chain Map
Before you can determine which parts of your supply chain need a sustainability boost, you’ll need to get a big-picture view of your entire supply chain ecosystem. Because today’s supply chains aren’t linear, you can start your map by creating a list of your sales channels, suppliers, warehouses, logistics providers, and store locations. Technologies like unified commerce software can give you visibility into how each of these channels and locations are operating and give you the benchmarks you need to start evaluating your overall sustainability.
Once you have your map and benchmarks, you can set goals for your supply chain sustainability efforts. Whether you want to cut carbon emissions, go paperless, or reduce packaging waste, setting goals and sticking to them is the first step in setting yourself up for success.
Got your goals, but aren’t sure where to start? Here are seven supply chain sustainability tactics you can get started with right now.
#1: Cut Down on Paperwork with Integrated EDI
There are plenty of reasons to automate your order processing methods, like saving time, preventing errors and scaling your operations. But an added benefit of integrated EDI is that it eliminates the need for paper order documents. The average office worker uses 10,000 sheets of copy paper per year, but with EDI, every transaction and communication, from purchase orders to shipping manifests to invoices, can be sent, received, and saved electronically.
#2: Choose the Right Packaging
There are two ways to look at packaging. From the production side, many companies are looking at how they can save on plastic use or use recycled materials in their product packaging. From the supply chain side, packaging refers more to picking the right box for each order. Choosing a huge box that dwarfs the product is not only a waste of space, plastic, and cardboard—it can also drastically increase your shipping costs. Instead, take advantage of pack optimisation software, which can help you choose the perfect box based on the contents of each order.
#3: Consolidate Your Shipments
The more trucks you need to use, the bigger your carbon footprint, so many companies have taken to consolidating orders and shipments, which allow them to save on transportation costs while being eco-friendly. On the individual consumer level, a great example of this is Amazon. During checkout, Amazon customers have two options. They can choose fast delivery, where items might be shipped separately, or choose to ship their items together in the “fewest possible packages.”
Customers can also choose “no rush” shipping, which is rewarded with discounts. Amazon says this lets them prioritise urgent shipments, which is great for the customer experience, but it also gives them time to collect and consolidate orders from the same fulfillment center into a single truck for last-mile delivery.
If you want to take this idea a step further, consider looking at your transportation routes, and adjusting them to reduce mileage. For example, if you are sending out two shipments, but one destination is en route to the other (and both deliveries are needed at the same time), why not consolidate them in the same truck, instead of making two separate trips.
#4: Choose Suppliers Who Care
Supply chain sustainability goes beyond your internal operations. Your suppliers contribute significantly to your environmental impact. By requiring environmental impact reports from your trading partners, you can find the most eco-friendly performers, encourage others to become more sustainable, and decide which suppliers don’t fit into your sustainability vision. Many top retailers like Walmart, CVS and Target use a non-profit called CDP, which measures suppliers by their impact on climate change, water security and deforestation.
#5: Optimise Your Inventory
Inventory technology solutions like vendor managed inventory (VMI) enable businesses to collaborate with their suppliers. The same processes that help increase sales while reducing inventory investments also help make your business more sustainable. For example, technology that gives a vendor visibility into location-specific demand can help them schedule replenishment deliveries. This helps the supplier or manufacturer understand how much product to produce (curbing overproduction that leads to waste), prevent overstocking (which often ends with the disposal or return of unsold goods) and optimise truckloads to reduce transportation costs (and fuel emissions).
#6: Use Analytics to Your Advantage
As you implement greener supply chain practices, it’s important to come back to the benchmarks and goals you set on a regular basis. You can use reporting and analytics from your various systems and integrations to see how you are progressing on each key performance indicator. You’ll also start beginning to see the outliers—which projects or processes are running efficiently, and which supply-chain touchpoints are creating waste. By using the data already at your fingertips, you can find new efficiency drivers, both for your sustainability efforts, and for other parts of your operations.
#7: Create a Circular Supply Chain
The circular supply chain model takes the idea of recycling to the next level, by encouraging manufacturers and sellers to reuse and repurpose everything from their own products to their packaging and transportation materials.
One aspect of the circular supply chain you’re probably familiar with is the process of recycling raw materials: for example, making new water bottles from discarded plastic. However, innovative supply chain companies are also doing things like returning and reusing pallets, even repairing or recycling broken pallets into new ones. Other businesses incentivize their customers to recycle, such as phone companies that accept trade-ins, which can then be recycled into new products. Some companies, such as food and beverage producers, can even profit from recycling waste; for example, beer companies can sell their “spent grain” to bakeries for bread, or as chicken feed for farmers.