Building a Sustainable Supply Chain: Gearing up for 2023 


Building a Sustainable Supply Chain: Gearing up for 2023 

Businesses and involved stakeholders are aggressively working towards creating better, smarter, and more efficient supply chain processes that are environmentally sustainable. Research states that 81% of the companies surveyed are more focused on sustainability than they were three years ago.

Moreover, businesses are opting for electric vehicles to reduce their carbon footprint and create sustainable supply chains, especially in Last-Mile deliveries. In addition, several businesses are collaborating to enrich their resources and capabilities for sustainable development.

However, as the internet penetration and eCommerce industry are growing, it’s only going to put companies under more pressure making it compulsory for to focus on sustainability in supply chains. 

To achieve a sustainable supply chain, businesses need to adopt modern supply chain management systems that help them automate different processes, reduce waste, handle huge workloads easily and bring efficiency into the system.

Below, we talk about what sustainable supply chain management is, why it is important, and the advantages and challenges it offers. We also share the best practices for building a sustainable supply chain and how to approach sustainability.

What Is Sustainable Supply Chain Management?

Sustainable supply chain management is the process of focusing on and integrating socially, financially, and, most importantly, environmentally friendly practices into the supply chain life cycle from product design and development to material selection and delivery of the product.

The goal of sustainable supply chain management is to minimize the negative impact of supply chain activities on the environment and to promote environment-friendly methods of operation. 

However, to create a sustainable supply chain, businesses need to change how they operate and manage their processes, which isn’t possible without digital transformation.

Because of the growing eCommerce sector, rising internet penetration, and globalization of the supply chain, there’s immense pressure on the supply chain businesses. And as these businesses still rely on obsolete decades-old methods and techniques, they’re unable to manage their operations and meet customer demands in a sustainable manner.

This calls for integrated, smart, and modern-day technological solutions that help businesses introduce efficiency into the system. Such solutions can help optimize route planning to reduce fuel expenditure and carbon emissions, reduce overproduction by automating demand and supply planning, introduce transparency to ensure raw materials are sourced from ethical sources, and more.

Why Is Sustainable Supply Chain Important?

The global supply chains account for over 90% of the impact on land, water, air, geological, and biodiversity resources., according to McKinsey. Also, global supply chains account for more than 80% of greenhouse gases. These stats show how negatively the global supply chain is impacting the environment.

However, with the rise in internet penetration, consumers have become quite smart, and how a company impacts the environment affects their decision-making when it comes to purchasing something. For instance, the CGS 2019 Retail and Sustainability Survey reported that over 2/3rd of the total respondents consider sustainable practices followed by a company before making a purchase. And they’re even willing to spend more to buy sustainable products important to them.

Therefore, if businesses want to attract more customers in the years to come, they need to create a sustainable supply chain. In addition, governments in different countries are releasing sustainable supply chain guidelines that businesses need to follow to stay operational. Moreover, a sustainable supply chain brings numerous benefits, such as reduced costs, increased productivity, and more. 

In a nutshell, if businesses want to enjoy a competitive advantage and a better reputation, want new customers, comply with sustainable government guidelines, and improve their efficiency, sustainability is a must-have.

How to Approach Sustainability in Supply Chains

Invest in Data-Driven Integrated Supply Chain Management Solutions

Supply chains involve numerous aspects, processes, and operations that generate tons of important data that renders useless because of legacy supply chain management solutions that lack data analysis capabilities.

With data-driven integrated supply chain solutions, businesses can collect crucial data such as manufacturing speed, delivery efficiency, production speed, quality control inspection results, etc., and analyze the same to spot inefficiencies in the system.

Moreover, such solutions use modern technologies such as AI and ML to predict product demand, which will help deal with overproduction. This is one-way businesses can approach sustainability in supply chains.

Look for Sustainability Issues Across the Supply Chain

Businesses need to analyze all aspects of the supply chain to understand how making consumer goods impacts sustainability. And to understand that, businesses need to determine how human (human labor) and natural resources (water, fuel, etc.) are being used at every step, from production to delivery.

Because there’s a humongous variety of consumer goods, the way they impact sustainability varies too. For instance, manufacturing LCD screen leads to the emission of fluorinated greenhouse gases, and coffee plantations are known to hire underage workers to get the job done.

Setting Supply Chain Sustainability Goals

Once the businesses have identified sustainability issues across the supply chain, they need to set goals to reduce the impact their processes have on sustainability. These goals should be in sync with the global supply chain agenda specified by a scientistic expert.

For instance, an UN-established body has defined global targets for the reduction of global greenhouse gas emissions. Based on that, the WWF and CDP calculated that the consumer discretionary sector in the US must cut their emission by 35-44% while the consumer staple industry should cut the emissions by 16-17% to be under the international threshold of greenhouse gas emission.

Setting a goal gives the businesses something to work for and eventually achieve a sustainable supply chain.

Steer Suppliers in the Right Direction

Consumer companies and retailers with majestic purchasing power offer them substantial control over how the supplier runs their business. While the number of businesses using their influence over suppliers for sustainable practice is less, it’s steadily growing.

Large businesses are adopting efficient technologies for their suppliers to help them make their operations more sustainable. For instance, Walmart helped its Chinese suppliers to become more energy efficient using an online tool. This actually helped suppliers reduce their energy consumption by a considerable 10%.

Advantages of Having a Sustainable Supply Chain

Helps Minimize Risk

Upstream processes in an organization have a huge impact on the sustainability of the supply chain. If the working conditions are healthy and the materials are sourced from ethical sources with minimum damage to the environment, it can help achieve better product quality, minimizing the risk.

Achieve Business Efficiency

By following sustainable supply chain best practices, such as creating efficient processes for their operations, businesses can significantly increase productivity and cut energy, resource, and transportation costs.

Also, if more humane conditions are offered, there’ll be fewer workplace hazards, improving efficiency. Moreover, following sustainable practices, businesses will be compelled to innovate and improve, which again adds to business efficiency.

Boost Transparency and Living up to Higher Standards

It has become easier for customers, i.e., the general public, to access information about the source of the product and its raw material. And as the technology grows and internet penetration further increases, it’d be even easier in the coming years.

By following stringent sustainability practices, businesses can show policymakers and consumers that they’re aware of their responsibilities and taking steps to reduce their impact on the environment.

Reducing Operational Costs

By adopting modern supply chain management solutions necessary for achieving a sustainable supply chain, businesses will be able to automate numerous tasks, improving the system’s efficiency. In addition, they’ll be able to track their carbon emissions and reduce any extra miles driven and thus fuel consumption using route optimization tools. This way, along with reducing their impact on the environment, businesses will be able to reduce operational costs and support their bottom line.

Improved Visibility Down to the Granular Level

To achieve supply chain sustainability, businesses need to opt for solutions that offer granular visibility over the operations, given how complex supply chain networks are. And only if businesses have better visibility can they spot the areas that impact sustainability and deal with the same.

As visibility improves to granular levels, businesses can have better control over their operations, allowing them to improve operational efficiencies.

Challenges in Building a Sustainable Supply Chain

Supply Chains are Complex

These days, supply chains are global and involve several complex networks making it hard for businesses to have visibility into their operations. Also, the wide range of products that are processed makes it even harder to have control over the operations. Because of this, businesses are unable to achieve sustainable supply chains.

Businesses need to spend time understanding the complex framework, talking to suppliers, and taking baby steps, such as locating the problem and then dealing with the same to make the supply chain more sustainable effectively.

Promoting Sustainability with Suppliers can be Tough.

Not every business has a huge contract volume and a contractual relationship with the suppliers, suitable customer specifications making it hard to exercise their control over the suppliers and promote sustainability with them. However, businesses can deal with this by collaborating with other businesses in the same industry or domain.

Conflicts with Existing Processes

To be effective, supply chain sustainability needs to be integrated with existing processes which can create conflicts such as price differences, quality, delivery time, etc. Such conflicts can slow down the process preventing businesses from achieving sustainable supply chains.

Sustainability in Supply Chains Is Not Limited to Direct Suppliers

Most businesses try to impose sustainable supply chain requirements on direct suppliers that they’re contractually bound with. However, such suppliers often have sub-suppliers whose activities have a negative impact on the environment. And such sub-suppliers usually remain unchecked, rendering the whole effort useless.

Massive Data Management Requirements

To determine the sustainability impact, like greenhouse gas emissions during transportation, businesses need robust data from suppliers and sub-suppliers. However, such data usually comes from different sources and needs stringent data management practices so that businesses can draw useful insights from them, which are quite demanding.  

Best Practices for Sustainable Supply Chain

Start From the Source

As stated earlier, supply chains are global, vast, and thus hard to manage. So, instead of going full throttle, businesses must first locate the source of the problem and then take baby steps towards dealing with the same.

Plan Keeping Sustainability as the Focal Point

Because of the vast number of processes involved in a supply chain, it’s easy to get swayed away and deviate from the path. However, this leads to unsatisfactory results. Therefore, businesses must always keep sustainability as the focal point while creating strategies and planning.

Leverage the Right Technology

Achieving a sustainable supply chain isn’t possible without the use of the right technology. Businesses need to invest in an integrated end-to-end supply chain management solution that gives them visibility into the operations, automates different processes, and helps them operate efficiently while minimizing environmental impact.

Look for Unified Management of All Stakeholders, Processes, and Events

Building a sustainable supply chain is more than just finding environment-friendly suppliers. Businesses need to opt for solutions that allow unified management of all the stakeholders, processes, and events. This allows all the stakeholders to be connected and share and work towards the same goal of a sustainable supply chain.

Real-Time Visibility for Improved Performance

Businesses must opt for supply chain management solutions that offer real-time visibility into operations. This way, managers can always keep an eye on operations, making it easy to spot inefficiencies and achieve better performance.

Optimize Resource and Asset Use

For sustainable supply chains, it’s important that asset (vehicles, labor, etc.) utilization is optimized. The assets must be utilized based on how they can perform to maximize productivity and reduce waste.

Reduce – Effort, Waste, and Expenses

Businesses need to adopt modern automated solutions that help reduce manual effort, redundant processes, and overall operational costs. This will bring more efficiency while supporting the business’s bottom line.

Digitize the Documentation

Digitizing documentation will not only save time and improve accessibility but will also eliminate the use of paper, which comes from trees. This way, businesses will be able to reduce their impact on the averment significantly.

Leverage Data Analytics for Consistent Learning

Using a management solution that comes with data analytics could revolutionize the way businesses work. Such tools help gather tons of data and draw useful insights from the same enabling businesses to recognize patterns and make informed decisions. This way, businesses can ensure consistent learning and improvement.

How Shipsy Helps in Building Sustainable Supply Chains?

Shipsy’s integrated end-to-end supply chain management platform is a one-stop solution for all sustainable supply chain needs. 

Shipsy offers smart automation, using which businesses can ensure cost efficiency and reduce carbon emissions without letting customer experience suffer. Also, businesses can enjoy hundreds of custom optimizations for delivery orchestration, routing, distribution, first mile, last mile, mid-mile, international logistics, and more.

Businesses can reduce reliance on manual elements and effectively plan routes to reduce fuel expenditure and, thus, carbon emissions. Also, using the Indicator of Carbon Emissions (ICE), businesses can detect and reduce the TTW carbon emissions for each shipment across marine, cargo, or air shipments. 

Moreover, as Shipsy offers an end-to-end supply chain management solution that comes with all functionalities, businesses need not purchase individual software solutions, saving a lot of money that can be invested in other operations. Along with the above benefits, businesses can also achieve the following:

  • 23% Reduction in Last-Mile Delivery Cost
  • 75% Man Hours Savings
  • 77% reduction in steps for the delivery process
  • 12% Reduction in Last Mile delivery cost
  • 12% Reduction in Mid-Mile Costs
  • 12% Reduction in order to ship time
  • 14% Increase In Deliveries Per Driver
  • 14% increase in deliveries per driver & more

To know more about Shipsy’s smart supply chain management offerings or to get started with highly smart end-to-end logistics solutions, please get in touch with our experts and book a customized demo now!


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