Key Trends Driving the Need for Supply Chain Sustainability

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Key Trends Driving the Need for Supply Chain Sustainability

Did you know that Croatia’s national postal service provider replaced all 180 motor scooters with e-bikes for daily rounds and unlocked 85% cost savings amounting to USD 894 per vehicle and as much as 100 tonnes of CO₂ emissions annually? 

Dynamic delivery landscape, consumer demands, economic benefits, brand conscience, and potential future regulations are driving businesses to expedite sustainability goals. Let’s quickly understand why.

While the eCommerce sales projections of USD 8.1 TN by 2026 come as a ripe opportunity for global retailers and manufacturers, the supply chain stakeholders are zooming out on greater goals, like sustainability. Further, 85% of consumers believe that their purchase decisions can have a huge impact on the environment, and more than one-third of global customers are willing to spend more on sustainable products.

Sustainable supply chain management is, thus, turning into the number one agenda for businesses across the globe, and logistics stakeholders are aggressively working to optimize, automate and improve their operations. 

Apart from the revamped face of global consumerism, there are many other factors that are driving the need for supply chain sustainability. 

Top 5 Trends Driving the Need for Sustainability in Global Supply Chains

Dynamic Delivery Landscape

Packet sizes are shrinking. There are faster inventory turns, which means that ‘lot’ sizes are reducing, and goods are traveling more miles before they reach the end customer. Chobani Flips yogurts have shrunk from 5.3 ounces to 4.5 ounces. In the U.K., Nestlé slimmed down its Nescafé Azera Americano coffee tins from 100 grams to 90 grams. 

Consumer Demands

Around the world, consumers are becoming increasingly aware of the impact of growing carbon emissions and expect brands to drive greater focus on sustainability. A recent survey reported that 64% of customers are driven toward sustainable brands.

With this increased consumer focus on sustainability, brands are becoming extra cautious in terms of their business decisions and the impact they have on the environment. 

Ethical sourcing, circular economy, and sustainable packaging – businesses are driven towards smarter, more transparent, and sustainable operations with a positive attitude.

Supply chain sustainability trends

Economic Benefits

Businesses across geographies are seeing significant cost savings by reducing miles traveled and using electric vehicles and bicycles to execute last-mile deliveries.

Sustainable supply chains are powered by intelligent features like environment-friendly procurement, controlled Scopes 1, 2, and 3 emissions, sustainable manufacturing, optimized routing, intelligent load allocation, etc. Hence, businesses can readily identify any service disruptions and offer prompt redressal. They can save on operational costs, reduce resource consumption, exercise more sustainable management, and boost their bottom lines.

Brand Conscience

Many brands today do not just want to be known for selling products. They want to stand for something more, hence focusing on building sustainable logistics practices to respond to climate change and global warming.

Younger professionals are looking for impact-oriented job profiles, and studies reveal that a company’s stand on sustainability is crucial for 56% of its workforce. The company’s ESG records and public commitments to the environmental impact of its operations have a major influence on the decision-making of prospective employees as well.

Potential Future Regulations

This might not be a major driver now, but as we move forward, strict government regulations and UN policies will drive enterprises to pledge to reduce emissions. In December 2020, the EU had to update the target of reducing global CO₂ emissions by at least 55% from 40% by 2030.

23% of companies agree that investor pressure to improve supply chain sustainability has increased. Repeated guidelines and detailed handbooks for understanding, managing, reducing, and tracking the emissions in Scopes 1, 2, and 3 directly point to the survival of the most sustainable brand in the future.

With global trends driving supply chain sustainability and technological advances stemming from AI, Big Data Analytics, and associated technologies, supply chain professionals need to rethink their focus and zoom out on ways to make their operations more resilient, agile, and sustainable soon.

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