Supply Chain Sustainability: Meeting Environmental Goals for the New Year

  • 29 May 2024
  • 6 Min Read

Globally, industries are expecting consumerism to grow by 5 percent annually for the next 20 years! Certainly, this is positive news for the consumer sector, but it is also a concerning fact for environmentalists. Almost 90% of the damage to the environment comes from consumer-packaged goods or CPG companies’ supply chains.

With the emergence of eCommerce, which is essentially a consumer-centric industry and survives on consumerism, a sustainable supply chain has become pivotal. The reason is, with an expected 75% increase in global consumerism by 2025, green supply management is the only hope to meet environmental goals and reduce carbon footprints released through the supply chain—the spine of the eCommerce industry.

Socially responsible supply chain companies need to be proactive and adopt sustainable means to meet and become environmental social and governance (ESG) aware. It helps with building customer trust and confidence when a consumer sees the process involved as eco-friendly. Some of the advantages of being sustainable are—

  • Limiting greenhouse gas emissions
  • Following or adopting ways of water management
  • Controlling deforestation & any concerning issues related to land use
  • Eliminating toxic waste
  • Improving the air quality
  • Finding eco-friendly ways to lower energy consumption

Resilient supply chain practices ensure a company has a reduced carbon footprint, has an eco-friendlier approach towards meeting consumer needs, and promises better market opportunities as well as profitability. Through this article, let us find how it is possible to increase profit margin, and how the world can be made a better place for future generations by embracing technology.

Importance of Supply Chain Sustainability

Across the world, the impact of human behavior can be seen in the rapidly changing climatic conditions. To support the cause and maintain ecological balance, sustainable means should be a way of life. In this case, companies are expected to be the flag bearers as they are one of the biggest defaulters and the reason behind increasing global warming. As a policy, companies need to check and monitor each vendor and stakeholder in the supply chain for the impact one could be making on the planet.

For instance, the use of raw materials that can support water conservation in the supply chain can be considered. Organic materials such as cotton supposedly use less water and can save water. Beyond sustainable materials sourcing, supply chain sustainability can be made a part of the system by tracking the process through the use of data and analytics, by setting goals, and by setting a system for tracking metrics, which can inform companies to alter the system accordingly to be more sustainable. Some of the ways for a company to have a transparent supply chain and be more sustainable could be—

  • Planning Efficiency for Reducing Overproduction: Often the fear of losing out to competitors or going out of stock during the peak holiday season or otherwise, companies go for overproduction without an in-depth analysis of market requirements. A comprehensive understanding of demand and supply can prevent overstocking or going out-of-stock.
  • Logistics, Shipping, and Transportation: For any supply chain, logistics and transportation are very critical components to reach out to consumers and for procurement of raw materials. Companies should make an effort to reduce the useless and reckless consumption of fuel through the optimization of routes.
  • Transparent Supply Chain: End-to-end visibility in the supply chain allows supply chain managers to check sustainability standards.
  • Collaboration for Outsourcing: Partnering with other vendors who specialize in certain work such as warehousing, shipping, and carriers is one of the sustainable ways for the supply chain.
  • Reduce Waste: Duplication of work creates a lot of wastage both of energy and manpower. This should be reduced by syncing work for feedback and insights.
  • Environmental Updates: Regular means for environmental updates in real-time can ensure resources can be utilized in a better way. As in if there are blocked roads or transportation can be delayed, which can increase fuel consumption, such real-time information can make a lot of difference in managing routes in various parts of the US during winter months.
  • Green Packaging Solutions: One of the finest measures for reducing carbon footprint. Packaging materials could be recycled materials or putting orders in a single box promotes green packaging. The consumer industry is responsible for high waste due to the usage of uneconomical, un-ecofriendly packaging materials.
  • Educating About Sustainable Means: Staff and employees of the supply chain should be properly educated about sustainable means for environmental goals for the new year.

Technology and Resilient Supply Chain Practices

The supply chain is a very complex layered system. To make it sustainable there should not be any compromise in the exchange of information. Communication is the key to a successful, sustainable, and profitable supply chain. Technology integrates the system and allows the continuous flow of data from one department to another for smarter sustainable decision-making.

  • Artificial Intelligence and Machine Learning: Together they help with predictive analytics, that helps in estimating demand and the required supply. Such advanced insights provide eco-conscious distribution of goods and raw materials, and reduce wastage in the supply chain. It also increases profitability.
  • Blockchain: It is the best way to oversee the manufacturing processes and practices used by suppliers, vendors, and other stakeholders.
  • Tracking and Tracing: The use of scanners and barcodes gives real-time visibility and brings transparency to the system. This optimizes warehousing, inventories, shipping, transportation, and logistics. Another significant way to reduce repetition and eco-conscious distribution. It is also easy to collaborate and outsource part of supply chain operations as continuous feedback pops up when APIs are interconnected.
  • Route Optimization: Real-time insight and sharing of information with various stakeholders of a supply chain, any disruptions can be handled without increased use of fuel. Alternative routes can be worked out and information can be shared with carriers, drivers, and consumers at the same time.
  • Eco-friendly Logistics: Technology shows cost-effective modes of transportation for last-mile delivery, which are mostly low-impact transportation. Electric vehicles, cycles, or on-foot delivery can be made.

Technology keeps each stakeholder and consumer in the loop, and the transparency in the supply chain makes customers feel more connected and responsible. More eco-friendly delivery options can be shown to consumers for a faster and more sustainable supply chain.

Take Supply Chain Sustainability to the Next Level with Advatix Cloudsuite™

Advatix Cloudsuite™ allows end-to-end visibility, transparency, and exchange of communication for a successful and sustainable supply chain. The information can be accessed and used for the optimization of routes and warehouse facilities, for inventory management, and for customer satisfaction.

If you are lagging in sustainable supply chains…