Sustainability will be front and center post pandemic
Sustainability was a major focus pre pandemic, and it is clear from the study that it will be so again post pandemic. In fact, the 2020s have been named the Decade of Action by the United Nations, which calls for “accelerating sustainable solutions to all the world’s biggest challenges – ranging from poverty and gender to climate change, inequality and closing the finance gap” by 2030.
Climate change, circular economy and sustainability have all come to the forefront over the past few years and our global supply chains sit right in the middle of these challenges, both as a major contributor to the problems, and as a great area of focus where we can take action to address the problems.
The need is clear, but the path to get there is not
If you look at most Corporate website for a company’s values, purpose, or mission, sustainability is often at the top of the list. The survey confirms this, stating that 65% of companies have created a clear purpose statement around sustainability, with a further 23% said they are in the process of doing so. That’s 88% in total.
However, there’s a long way to go in living up to that “purpose.” For example, only half have reduced overall shipping miles. And while over two-thirds say they would reduce the amount of business they do with a supplier shown to have unsustainable practices, only a small percentage have the visibility into their multi-tier suppliers’ processes that would enable them to make that decision.
What is driving Sustainability?
Most respondents agree that having a clear purpose and mission is necessary to the long-term success of their businesses, that a sustainable supply chain is a competitive differentiator, and that good sustainability practices reduce risk.
The survey also highlighted the top three 3 market factors influencing sustainability initiatives as, product and service innovation, customers demand, and increasing industry and governmental regulations.
Sustainability – From design to decommission
Supply Chain sustainability is the management of environmental, social and economic impacts, and the encouragement of good governance practices throughout the lifecycles of goods and services. End-to-end supply chain transparency is critical, whether unhoused across your own facilities or outsourced to trading partners. Sustainability initiatives must extend from the design to the decommission of a product: from raw materials sourcing, to last-mile logistics, and even to product usage, returns and recycling processes.
Sustainable Design for a sustainable product lifecycle
Companies need to think “sustainable” from the start of a products life, by designing products and packaging that are biodegradable, and environmentally sustainable. In the design process you need to be able to:
- Calculate the environmental costs for products throughout the lifecycle
- Simulate the manufacturing impact on the environment
- Link the Voice of Customer feedback to sustainable requirements
Sustainable Plans for a sustainable outcome
The saying goes, “if you fail to plan, you plan to fail.” And this is true of a sustainability initiative. Businesses need to:
Drive Planning processes that strive to reduce emissions, and ethically satisfy demand with sustainable, ethically sourced supply.
- Increase forecast and accuracy to reduce obsolete inventory
- Predict end-of-life scenarios and support circular processes
- Simulate CO2 footprint of the plan through procurement, production and transport, and production
- And report actual results to compare to the plan to identify successes and areas for improvement
Sustainable Manufacturing to minimize waste and environment impact
Manufacturing facilities are a huge area of opportunity to drive carbon reductions and sustainability initiatives. But this involves:
- Monitoring energy usage as a function of production volume
- Measuring CO2 emissions against compliance commitments
- Capturing and utilizing Co- and By-Products to minimize waste
- Enforce Safety management for sustainable workforce
Sustainable Logistics that reduce mileage, emissions, and carbon footprint
The logistics process that move goods around the globe are also a huge area of focus when it comes to sustainability.
- Track, measure and optimize CO2- and energy consumption in warehousing and transportation functions
- Consider delivery resources that are energy efficient or CO2 neutral (especially for inner city or last-mile delivery tasks)
- Optimized routing to run the shortest and least congested route to conserve energy, and reduce miles and carbon footprint
- Leverage Optimized 3D truck load planning to reduce empty miles traveled
Operate assets and equipment in an energy-efficient manner
Sustainability through the full product or asset lifecycle is critical. By having visibility into how they are performing at a customer's site or home can enable you to:
- Extending asset life and reduce energy consumption
- Calculate and track the environmental impact of asset operations
- Ensure the safety of operators or users and ensure environmental and safety compliance
Embrace your network of partners is a key part of a sustainability initiative
At the end of the day, no business operates alone, and leverages a network of contract manufacturers, suppliers, 3PL’s and other trading partners.
Ensure visibility across all tiers of the network is critical. If a supplier 2 tiers down your supply chain has unethical practices, it could be your brand that suffers.
- Monitor and track compliance agreements to reduce risks
The survey concludes by stating that “executives must realize that sustainability can no longer be treated as an afterthought. It is an integral part of the day-to-day activities that keep a supply chain running, from design through to decommissioning,” and provides some sound advice and recommendations for all areas across the supply chain and product lifecycle.