How to make your supply chain more sustainable

As discussions surrounding the climate crisis continue to loom large in our culture, companies everywhere have had to consider the environmental impact of their supply chains. Starbucks and H&M are two particularly high-profile examples of companies who have recently announced new measures to improve the sustainability of their supply chains. In general, an organisation’s supply chain causes 5.5 times more emissions than an its direct operations, so making it more eco-friendly is a goal which all companies should be taking every effort to achieve. But how exactly can your own enterprise follow the lead of these corporate behemoths?

1. Map out your supply chain

Worryingly, just 6% of businesses believe they have full supply chain visibility — comprehensive access to real-time, actionable data concerning every part of the supply chain, all the way from the raw material stages to product delivery. Without this visibility, it is a lot more difficult to recognize wasteful practices and environmental risks. To gain this insight, your company needs to map your supply chain from end to end, exploring how first-tier to lower-tier suppliers impact your operations, and looking at each component material of every item you manufacture.

There are many data visualization tools that can help you gather and organize this information, which can make it easier to come up with actionable solutions. However, this can be a time-consuming process, so hiring a dedicated supply chain manager is a worthwhile consideration. As noted by executive search company Egon Zehnder, supply chain managers “connect every aspect of an enterprise, from planning and procurement to manufacturing, sales, distribution, and even customer experience”. Introducing a new hire to take responsibility for this allows every part of a company to work together seamlessly in making crucial changes to their working processes.

2. Focus on ethical sourcing

Ethical sourcing is arguably the easiest change you can make and it’s exactly what Starbucks is doing from 2021 onwards. The American coffee giant announced that it was shifting from single-use to reusable packaging, in an attempt to reduce waste sent to landfills by 50%. There are plenty of other ways your own company can source ethically, such as changing to local suppliers, or using digital means of communication to cut down paper usage. If possible, you could even follow Cargill’s lead and cut ties with any unsustainable suppliers.

3. Encourage sustainable driving

Vehicles can contribute huge emissions which is why you should find ways to make the transport involved in your supply chain as environmentally-friendly as possible. Switching to electric vehicles (EVs) will produce fewer emissions — they convert between 59% and 62% of the energy they generate into power, with the remainder being turned into waste. By comparison, conventional vehicles only convert around 17% to 21%, which results in around 80% contributing to the wider problem of air pollution. If you can’t afford to upgrade to EVs, your existing fleet can be adapted by investing in aerodynamic improvements like wind deflectors to your vehicles, and using sustainable tires, such as self-sealing ones that reduce waste. You could also enrol your drivers on eco-driving training courses to teach them the best practices for reducing emissions on the road.

4. Harness technology

In recent years, a vast range of technologies have been developed specifically to improve the efficiency of companies’ supply chains across all manner of sectors. H&M has begun to use artificial intelligence to improve their forecasting, and ensure that they only use the resources they need within their supply chain. Another good example is vehicle telematics technology, which can be used to find better driving routes, and prompt drivers to correct any inefficient driving behaviors in real-time. Meanwhile, predictive analytics tools can anticipate where and when materials are going to arrive, allowing you to consolidate shipments from multiple suppliers to reduce the number of journeys required.

5. Educate your team

Procedural changes can be supplemented by driving behavioral and cultural changes within your company. As such, it’s recommended that you run training sessions to hammer home the importance of sustainability, and encourage every individual to find ways to contribute to the movement.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.