Plan, procure, execute, & track transportation for every shipment across your supply chain & logistics operations
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Increase vehicle capacity utilization and customer promise adherence
Grow your business with omnichannel presence and automated pickups
Consolidate shipments for hub to hub movement across land and air
Real-time customer communications and collect accurate PODs
Orchestrate logistics operations with multiple 3rd party carriers
Achieve cost effective, scalable, sustainable, and customer centric deliveries
Orchestrate all your cross-border logistics operations with ease
Improve address accuracy, ensure first-attempt delivery success, reduce costs and boost customer experience
Gain end-to-end shipment visibility, get proactive alerts, and send customers live tracking links
Grow business in a dynamic world and manage operations across First, Middle & Last mile
Delight customers by seamlessly managing store and online orders across own fleet and 3rd party
Reduce freight costs & get end to end visibility across shipments
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The recent few years have been a frenzy for supply chain management professionals across the globe. First, there was a pandemic. Next, they had to grapple with a shooting rise in the demands for home deliveries, and before they could master the numbers, a new super-agile business model was giving them a run for their money – the hyperlocal delivery.
As the world moves towards massive internet penetration with 5,631.54 MN internet users by 2025 and the eCommerce sales projections hinted at USD 8.1 TN by 2026, the supply chain stakeholders worry over the greater goals, like sustainability.
Sustainable supply chain management is, thus, finding space on business agendas across the globe, and logistics stakeholders are vigorously looking for ways to optimize, automate and improve their operations.
But then again, what does sustainable supply chain management entail, and how can supply chain stakeholders approach this operational puzzle? What are some of the daunting challenges in the pursuit of sustainability, and how can automation help overcome them?
In the following sections, we are going to discuss the answers at length, as well as explore the management part in greater detail.
Let us begin with the problem statement itself.
Sustainable supply chain management involves managing all the components of the supply chain ecosystem in an environmentally responsible manner. All the operations, processes, logistics, transportation, etc., are planned, managed, and controlled to ensure the greatest level of environmental sustainability, all the while optimizing the costs, efficiency, and other business use cases.
Hence, sustainable SCM involves the management of environmental, social, and economic impacts and the encouragement of good governance practices throughout the value chain of goods and services.
Traditionally, supply chain management or SCM focuses on increasing profits or improving the efficiency of fleet and delivery operations. However, stats reveal that the carbon footprint of consumers spending USD 70 per week on food deliveries is 450% higher than those that don’t order food online.
Further, 66% of Last Mile emissions come from eCommerce and parcel deliveries. Now, throw in the fact that the global parcel volume is expected to be 256 billion (parcels shipped) in 2027 and the global eCommerce market is growing at a CAGR of 15.1%, and we have a glum picture in terms of carbon emissions from logistics.
To tame the Behemoth, logistics automation companies around the world are leveraging data insights from the core processes and creating systems that help save money, fuel, and time and refine the processes by flushing down the redundancies and inefficiencies.
Before we elaborate on that, let us move on to explore some more stats and trends to learn why sustainable supply chain management is crucial.
With the eCommerce space getting cramped, crunched, and disrupted in multiple ways, businesses are solely focusing on the business use cases – customer acquisition, profits, churn, and delivering across the SLAs. However, focusing only on these aspects takes out the substance from the overall business value and the impact it makes on society and nature.
A recent BCG survey revealed that the pandemic shifted global consumer attitudes toward environmental issues and:
With such renewed consumer focus on environmental awareness, sustainability in supply chain management becomes crucial for consumer companies and otherwise.
Here are some other reasons for having a sustainable SCM strategy.
Irrespective of the type and scope of the business, environmental responsibility must be shouldered by one and all. As the cities choke and the air quality indices keep going beyond the normal ranges, brands and businesses all over the globe are expected to work in alignment with the sustainability angles.
Switching over to more efficient and environment-friendly vehicles and fuels; curbing down emissions via smart and extremely efficient operations, and leveraging the technology to identify and overcome inefficiencies – these and many other goals for achieving the greater good are finding their ways into the offices and enterprises all over the world.
A business is answerable to direct demands – consumer and inventor. Forbes said that nearly 90% of Gen X customers are willing to spend 10% more for sustainable products, and this figure has grown significantly over just 2 years from 34%.
Further, a recent report from PwC outlined the following facts:
As the two driving forces in the business and supply chain ecosystem put stress on sustainability and environmental goals, stakeholders can no longer afford to slide these demands down the business agendas.
Sustainable supply chain management targets the process and operational inefficiencies, thereby making the business model more optimized and efficient. More efficient processes and systems reduce required inputs and lower costs.
Focusing on efficiency and optimization spurs a chain of reactions, nudging businesses towards reduced operational costs, shrinkage of carbon footprint, and optimized investment/use of energy, water, and natural & synthetic material use.
Increased understanding of key supply chain processes, including the core business processes, such as natural resource management & extraction, logistics, transportation, and manufacturing, enables better stewardship and management of resources.
Businesses start to focus on worker health, motivation, and productivity, and this way, sustainability in supply chains becomes a responsibility shouldered by all.
The very latest industry disruption in the delivery segment – hyperlocal delivery, is incurring the wrath and speculation from leaders all over the world. They just cannot stop pounding the market with remarks on sustainability and a cash-burning mentality.
As the market is set for huge growth, reaching USD 5,188.60 BN by 2030, businesses need to take strong measures towards taming their supply chain emissions and focusing on sustainability.
As they look for ways to cut down emissions, they cut down the fleet or transportation costs as well as reduce the operational costs across the entire value chain. They reduce the number of trips for delivering a specific amount of parcels and look for ways to minimize fuel wastage for quick deliveries as well.
Thus, sustainability comes as an added benefit for the supply chain stakeholders.
As discussed above, investors and customers are favoring and supporting the brands with sustainability goals and ESG initiatives. PwC reports that 80% of consumers are more likely to buy from businesses with ESG commitments.
Also, 76% of consumers report that they will discontinue their relationship with businesses that treat the environment, employees, or the community poorly.
By investing in proper ESG initiatives and having a sustainable supply chain, businesses diversify their impact across customer audiences and also project themselves as responsible brand. This drives customer engagement and boosts the brand position.
Now that we have examined why sustainability in supply chain management is important let us move on to discuss how to approach sustainability in SCM.
Businesses seeking a long-term competitive advantage from sustainability in supply chains will need customer offerings driving brand differentiation and a step change in sustainability performance. Identifying and conceptualizing such offerings require a new product and corporate portfolio that is built around sustainability.
Simply patching up a sustainability initiative is not going to be enough, as businesses need clear goals in terms of achieving operational excellence, strategic task planning, and conceptualizing competitive advantages.
Businesses need to compute and understand the comprehensive market value they will create via their sustainability efforts. When they focus on market value, they bring all the key aspects of sustainable supply chain management on a single platform.
They are able to find the optimization pockets in the existing system and identify the various ways to trap redundancies and inefficiencies.
Instilling sustainability in legacy supply chains is a mammoth task that requires complex integrations and data analysis. Doing this manually is impossible and doing this with the help of automation also requires a well-calculated approach and the right partnership.
Investing in a smart, sustainable supply chain management platform that comes with data analytics, reporting, and data visualization capabilities is one such approach.
While integrating sustainability in a legacy business model, leaders have to tackle large restructuring of assets that no align well with their business goals. In order to cut down the emissions, they also might need to invest in alternative fuels, more fuel-efficient vehicles, and automation platforms that remove the reliance on manual elements.
Next, we discuss the advantages of sustainable supply chain management.
Sustainable supply chain management stems from the optimization of all the supply chain components and the entire logistics value chain. This means businesses are actively removing the components and improving the processes that are risk-prone, or can evolve into a business risk because of inefficiencies.
By actively incorporating sustainability in supply chains, businesses can not only minimize but actively avoid risk. Thus, they can address more strategic business risks and overcome the challenges in a more robust manner.
When supply chain stakeholders optimize their supply chains, they make them more streamlined, transparent, trustworthy, and resilient. With proper visibility into the movements of logistics components, they can reduce their fuel costs, improve delivery efficiencies and minimize completely lossy processes, such as empty miles, fake attempts, or RTOs.
Further, businesses follow the best practices and establish higher business standards with a renewed focus on ESG commitments, revenue, customer delight, and corporate responsibility.
Sustainable supply chain management delivers benefits on multiple levels. Companies integrating sustainability into their business processes observe improved efficiency in key areas like waste management, resource conservation, and product development.
These improvements lead to a more streamlined overall operation, reducing operating costs and increasing productivity. Right from the design to production, and transportation to distribution – businesses focus on process efficiency that reduces costs, increases profits, and boosts brand reputation.
While sustainable supply chain management comes with many benefits, the road to sustainability is loaded with challenges that we discuss in the next section.
Supply chains are complex networks of suppliers, manufacturers, distributors, retailers, and consumers working together to meet their own needs & those of society at large.
As such, it takes significant coordination and planning to ensure that all participants in a supply chain work toward common goal, which is sustainability.
In addition, many stakeholders are involved in sustainable supply chain management – each with unique interests that must be balanced. Sustainability efforts must also be focused on specific areas of concern; if they aren’t properly prioritized or implemented correctly, they can cause more harm than good.
In addition to being complex, SSCM (sustainable supply chain management) is also hard to measure – which can make it hard for companies to know how their efforts impact their supply chains.
For example, many companies will use sustainability certifications as a proxy measure of sustainability success; however, these certifications do not necessarily reflect overall performance in all areas of concern or even provide a complete picture of what’s happening behind the scenes in a company’s supply chain.
Companies must conduct intensive studies to understand how one’s supply chain impacts sustainability goals fully. The study will take into account both direct impacts (such as emissions) and indirect impacts (such as community relations).
Sustainable supply chain management requires significant time and effort from all participants. It can make it difficult to implement in a way that works well with existing supply chain management practices.
For example, many companies implementing sustainable supply chains have found that their efforts did not always align with their other goals – especially when minimizing costs or maximizing profit. In addition, some of these initiatives require additional funds; as such, some companies may be hesitant to dedicate those funds without knowing whether or not they will provide a return on investment (ROI).
Sustainability data can be difficult to manage and track, especially when multiple parties are involved in a supply chain. For example, if a company’s supplier or manufacturer does not have adequate data tracking systems, it can make it difficult for that company to know how its efforts impact sustainability goals at large.
In addition, companies may use different terms to refer to sustainability metrics; as such, it can be hard to compare results across companies without standardizing those terms first.
Integrating sustainability in your supply chain means making sure you are aware of your efforts in making the right choices, including the types of manufacturers that you collaborate with, to the method you use to prepare to package and deliver orders.
Here are some best practices to follow.
A supply chain is only as strong as its weakest link, so it’s important to ensure that the suppliers adhere to a brand’s sustainability goals. If a brand is concerned about a particular supplier or manufacturer, they can ask them about their efforts in making a sustainable supply chain or check out third-party certifications like Fair Trade USA and Rainforest Alliance.
These organizations have sustainability standards that help ensure environmentally responsible manufacturing practices.
Businesses should plan and consider how to integrate sustainable practices into their supply chain management strategy. This way, they can build a strong foundation that will be easier to maintain over time.
Technology can be a great tool to help businesses monitor and streamline their sustainability efforts within the supply chain management strategy.
Investing in smart end-to-end operations management and optimization systems that reduce costs and help businesses overcome manual decision-making comes with multiple benefits. Apart from trapping the redundancies, these platforms also help in identifying optimization pockets, measuring and adhering to sustainability goals, and planning strategically for long-lasting excellence.
Sustainability in supply chain management is more than just choosing environmentally responsible manufacturers; it’s also about ensuring that everyone involved in the supply chain ecosystem is on board with the sustainability goals.
Having an accountable sustainability-oriented culture embeds sustainability in leadership and decision-making frameworks and overcomes the challenges posed by legacy mindsets and corporate DNA.
Further, ensuring the compensation, retention, and promotion of individual leaders that share the responsibility towards sustainable supply chain management is a must. Such efforts leverage capital allocation tools and ingrain sustainability into the lens through which decisions are made.
Real-time visibility into your supply chain management strategy can help you improve your business processes, optimize your operations and make more informed decisions about future initiatives.
It is easier to ensure sustainability in the in-house processes, such as manufacturing and production. However, once the ready goods are out for transportation, distribution, and delivery, having granular visibility into the key milestone events helps businesses exercise the same degree of control and monitoring remotely.
They can check the real-time shipment status, curb delays, ensure timely SLA adherence, and stay aligned to their sustainable supply chain goals.
Optimizing your resource and asset use can ensure you’re using resources more efficiently. This means using fewer resources to produce more products or services, reducing waste, and streamlining production processes.
Using smart automation for automatic delivery route generation, vehicle capacity utilization, and maximizing the number of deliveries per vehicle can reduce road transportation costs by 12%.
By considering the transportation costs as a function of vehicle movement, it is quite clear that optimized vehicle use smart routing can significantly reduce carbon emissions in the last mile.
Leveraging data analytics for processing the organizational and entire supply chain data makes it possible to find hidden trends and patterns in the processes and operations. Businesses can check whether the current measures being taken by them are producing the expected results or not. They can also draw data-driven actionable insights from data visualization and find more ways to make their sustainable supply chain management strategies better and more efficient.
Automation-powered logistics management tools can empower businesses to ensure agility and cost-efficiency while keeping customer experience intact. Adopting smart and innovative logistics solutions based on AI, ML, and Big Data Analytics can help steer businesses toward sustainable growth.
Shipsy’s smart end-to-end delivery orchestration and supply chain management not only equips businesses with the right automation but also offers hundreds of custom optimization and planning criteria for routing, delivery planning, hub management, distribution, international logistics, Last Mile, and more.
Shipsy helps businesses in sustainable supply chain management and unlock:
Shipsy’s Carbon Emissions indicator helps shippers track the Tank-to-Wheel (TTW) carbon emissions for each shipment across air cargo and marine shipments (available on request), and make their supply chain and logistics operations more sustainable. In addition to this, we also have a carbon emissions calculator, which can help estimate the carbon footprint of shipments between specific port pairs across the ocean and air modes.
For more information and to get started with Shipsy’s smart end-to-end supply chain management for sustainable business growth, please schedule a custom demo today!
