Sustainable Supply Chain Management

As the growing global supply chain industry struggles to meet the rising demands and expectations of consumers, numerous entities are also feeling pressure from the international community to further develop components of green supply chain management. While we may still be many years from a fully green supply chain, there have been remarkable advancements in sustainable supply chain management technology and practices over the past few years. But what is sustainable supply chain management? And what are some of the objectives of green supply chain management?

Sustainable supply chain management broadly refers to various processes within supply chain networks to forego practices that are harmful to the environment or exploitative of human and local natural resources. Numerous suppliers are setting ‘sustainability targets’ to help drive sustainability efforts throughout the entirety of the supply chain process. This can look like buyers working with suppliers to develop better sustainable practices, or companies investing in carbon monitoring technologies to help reduce or eliminate greenhouse-gas emissions during production and transportation initiatives.

Digital technological advancements have also sparked sustainability initiatives all throughout supply chain marketplaces. Larger corporations that can afford to are making use of more advanced robotics, production methods, and streamlining their storage and warehousing facilities in an effort to reduce energy consumption. Advancements in technology also have the potential to make work environments safer and less taxing on human employees as robots and other automated systems take over more dangerous parts of the job.

Other supply chain companies are pushing the envelope further still by making pledges to improve their sustainability practices and to work with suppliers that also prioritize sustainability and equitable practices. Many organizations are making pledges to achieve “net-zero” operations in the coming years and decades. While some critics have called these pledges into question as mere lip service for investors and consumers alike, companies that are sincere about their pledges have the range of positive impacts efforts to improve sustainability can have on an industry as sprawling as the global supply chain.

Sustainable Supply Chain Management Examples

Even the most modest environmental supply chain management initiatives can have beneficial impacts that ripple outward broadly, as supply chain networks are often sprawling, complex, and multifaceted enterprises. Sustainable supply chain examples may look different for each company, which is why it’s vitally important to assess where your organization’s specific supply-chain weaknesses are, as well as your greatest strengths and assets to develop a smoother path towards more sustainable practices.

Some sustainable supply chain practices examples could also include companies monitoring their own sustainability performance as well as the sustainability performance, like CO2 supply chain data, of their suppliers and holding them accountable if certain sustainability initiatives are not adequately met. Making real progress towards meeting sustainability goals may require high standards, but it’s important to see that those standards are consistently met in order to achieve sustainability goals in a timely manner.

Sustainable supply chain management examples may involve offering incentives to suppliers and vendors for improving their own sustainability initiatives. Companies that work closely with one another can also enter into sustainability pledges or agreements together to help strengthen their business relations but also to save money on production and logistics expenses and improve brand recognition and perception as well. And organizations that manage their pledges and sustainability efforts well will assume leadership roles within their respective industries as the drivers of innovation and sustainability.

These are just a handful of some green supply chain examples, although there are countless other efforts large and small that businesses can undergo in order to improve their own sustainability practices. Even small efforts like switching to using office stationery made from mostly recycled materials to large, sweeping efforts like investing in a fleet of electric shipping vehicles – every effort makes a difference and inches the world away from an irreversible climate catastrophe.

Top Sustainable Supply Chain Companies

Many of the top sustainable supply chain companies are actively invested in ongoing efforts to reduce their climate footprint. Organizations are looking for greener energy sources and relying on fossil fuels less, while simultaneously reaching out to work with suppliers and vendors that prioritize similar eco-friendly efforts and initiatives. Sustainable supply chain companies understand the value of investing in sustainable practices; it’s not only a matter of preserving the environment and the planet – developing more sustainable aspects of your company’s workflow can help save on energy costs, shipping costs, and much more. These are just a few of the many benefits supply chain sustainability companies bring to the industry.

Green supply chain companies are interested in trailblazing a new era of environmentally-friendly solutions for supply chain companies. Because tens of billions of dollars worth of assets, goods, real estate, infrastructure, and more are wrapped up in supply chain networks, numerous businesses are constantly searching for ways to accomplish their business more quickly and more affordably. No longer are rapidness and affordability the most important concerns for growing supply chain enterprises; sustainability must be taken into account in order for companies to continue to thrive and maintain profitability in the future. As more and more supply chain organizations make improving sustainability performance a greater priority, the businesses that are slow to adapt will be eclipsed and potentially left behind in the dust.

Green Supply Chain Trends

As the effects of climate change become ever more apparent and continue to affect some of the most vulnerable communities around the globe, industries worldwide have tried to innovate new, more environmentally savvy ways of conducting business. And there are more advantages of a sustainable supply chain besides the obvious environmental impacts. Developing more sustainable business practices is also an investment in the longevity of business enterprises. More and more companies are implementing ways to recycle and reuse certain materials to make their processes greener, more environmentally conscious, and ultimately, more affordable for both producers and consumers.

According to the green supply chain McKinsey article, “Starting at the source: Sustainability in supply chains”, some of the primary green supply chain trends include developing less energy-hungry methods for both product production as well as transportation: “To understand the impact of making consumer goods, companies must determine how natural and human resources are used at every step of the production process, whether in the supply chain or in direct operations.” The article continues, “Companies must also consider a wide range of environmental, social, and economic issues.”

Other supply chain trends in sustainability are being developed right now, and more are being discovered and innovated all the time. Supply chain companies that are able to find ways to make current and future trends work well for them will have an advantage as the whole industry continues its sustainability revolution.

Sustainable Supply Chains: Key Challenges

While there are certainly many barriers to supply chain sustainability, the long-term advantages of sustainable supply chain management will most likely overshadow any downsides. A common misconception from business owners and stakeholders is that the less sustainable an organization is currently, the more difficult it will be to implement changes to improve its sustainable practices. While this may be true in some specific instances, there are still numerous methods of improving your organization’s sustainability performance without going massively over budget.

Supply chain sustainability issues aside, there are numerous benefits oinabf green supply chain management. Investing in greener technology and more energy-efficient solutions can actually help improve production rates as well as delivery performance. Many common challenges supply chain organizations face orbit around the manufacturing process. As demand continues to rise for various goods, companies will struggle to keep up with demand, but by looking for ways to utilize recycled materials throughout the manufacturing operation a company can advance its sustainability initiatives while finding a solution to help meet rising demand.

Importance of Supply Chain Management

It’s difficult to overstate the importance of sustainable supply chain management; as Earth’s population continues to increase and as more people come of age and graduate into the consumer class, supply chains around the globe will feel the strain of increased demand. The need for sustainability is not merely reflected by the planet’s looming climate crisis; efforts to improve sustainability practices are necessary to ensure companies can continue to produce and transport goods and so that consumers can continue to buy and consume those goods. Without serious investments in sustainable practices, the future of supply chains is, quite simply, unsustainable.

How can effective goods supply chain management support environmental sustainability? That’s what the industry is evolving and working towards to find out. In the meantime, cloud-based platforms like Chain.io are working to highlight the importance of sustainability in supply chain logistics and applications. As technology continues to advance and provide sustainable solutions, companies are also working to utilize cleaner fuels and more renewable sources of energy. Human beings and corporations alike have come a long way since the beginning of the Industrial Revolution, but we still have a long way to go.

Because supply chains are such collaborative endeavors, the sustainability revolution will not come as a result of one or two companies’ continued efforts, but every company’s efforts – large and small. From preserving the earth’s natural ecosystems to improving shipping speeds and reducing costs, to integrating systems for better supply chain visibility, there’s little doubt that efforts to improve sustainability in supply chains are here to stay.