Sustainable Supply Chain Explained
Sustainable Supply Chain Defined
Supply chain sustainability is the business decisions and processes that affect the environment, in terms of waste, CO2 emissions, fuel consumption and other similar issues.
Some examples of the types of sustainability decisions companies make include:
- Utilizing the most environmentally friendly freight mode possible when planning the loads of the day.
- Choosing supplier, manufacturing and distribution locations based on proximity to allow for a greener network.
- Opting for materials in the manufacturing and packaging processes that are green and also efficient in design to keep waste down during the process and after consumed.
Consumers are becoming more vocal about chasing sustainable practices by investing more in fast-moving consumer goods (FMCG). Companies are responding to these consumption habits with increasingly “green supply chains.”
Sustainable supply chains do not always entail simply using recyclable materials or even striving for the goal of zero-waste. These practices are only a small step in the grand scheme of “going green.” Companies with the bigger vision to transform their supply chain are beginning to incorporate small scale goals for bigger environmental benefits, while providing incentives for others to adopt sustainable practices as well.
One example of sustainable implementation is Accenture’s circular supply chain model. With influence from digital identity, payments and blockchain, Accenture’s focus is for consumers to directly reward producers for their sustainability efforts. It works a little like this:
Another leader in the sustainable supply chain realm is Amazon. Just about everyone acknowledges Amazon’s ability to increase efficiency in its supply chain habits. But the company has taken it one step further with an interactive option branded “Amazon Day.” This feature allows Amazon Prime members to schedule their deliveries. So, a member might order products three different days in a week but can choose to receive them all on one day, rather than utilizing the two-day delivery perk. By consolidating packaging and saving trips to the same location, Amazon’s carbon footprint is minimized while achieving lower shipping costs and increased visibility within warehouse inventory.
These two companies, Amazon and Accenture, are just the tip of the iceberg when it comes to who is transforming their companies’ purpose by putting sustainable practices at the core of their supply chain.
The freight and logistics industry is pushing their motor carrier businesses to be SmartWay certified, while some shippers are requiring it to be a part of their freight RFP. SmartWay is an EPA program that began in 2004 and claims its participants have saved more than $33.4 billion in fuel cost since its inception.
InTek Freight & Logistics is in full support of SmartWay with it being a leader in the domestic intermodal market and through its managed transportation service solutions that optimize by consolidating shippers' freight loads and applying modal conversion strategies.
It is reported that 50% of consumers are on their way to changing their habits to have a better impact on the environment. Nielsen reports its almost at 75% amongst millennials, as of 2018. So, there is no better time than the present to invest in more sustainable principles for supply chain success.
For more on how to improve your supply chain:
- The Complete Guide to Intermodal
- The Comprehensive Guide to Managed Transportation Services
- Top 10 Benefits of LTL Freight Consolidation and How-to Implement
- Nearshoring Defined & Top 10 Benefits in 100 Words
- IPI Freight Definition and Best Practices