It is essential to implement “sustainable” practices throughout the supply chain process so that the environment does not suffer from complex logistics systems that convert raw materials into finished products. The United Nations Global Compact echoed this sentiment, and even the United States Environmental Protection Agency (EPA) confirms that greenhouse gas emissions have increased by nearly 90 percent since 1970, much to the detriment of the global community.
We can halt this rapid advancement of environmental and social degradation with sustainable supply chain practices. A sustainable supply chain can be defined as one that employs environmentally and socially sustainable practices across the entire gamut of the supply chain process.
These environmental and socially sustainable practices are done with the intention of cutting down carbon dioxide (CO2) emissions and other air pollutants that are the primary greenhouse gas emissions responsible for global warming, thereby protecting people and the environment.
Use of more efficient packaging allows manufacturers to layer more products onto one another, thereby reducing costs, improving supply chain efficiency, and ultimately reducing greenhouse gas emissions
The depletion of resources, deforestation, greenhouse gas emissions, water security pollution, and loss of biological diversity all contribute to a shortfall in the ecological balance, so companies must, as a matter of necessity, develop ethical, logistical processes that ensure the environment is sustained.
A company’s supply chain practices must incorporate environmentally ethical practices such as green purchasing, green manufacturing, green warehousing, green packaging, and green transportation.
A significant portion of sustainable supply chain practices are based on sustainable environmental practices. However, social standards are also integral to sustainable supply chain practices. These social standards cover issues such as forced labour, health and safety conditions, working conditions, and fair labour practices. Consequently, a comprehensive sustainable supply chain should include a process that yields immense environmental benefits as well as long-term benefits for workers and communities.
Ecological and socially responsible supply chain practices
Let’s look at some environmentally and socially sustainable supply chain practices that companies and other critical stakeholders may employ in the supply chain.
1. Rethinking intricate material components
Material components are all the inputs a company uses to create and deliver its product in a supply chain lifecycle. A fair assessment of material components includes both human and material efforts. In a supply chain process, raw materials and energy expenditure can all be classified as “material components.”
Companies can shift towards sustainable supply chain practices by revamping the material components they employ in the supply chain process. For instance, the office supply retailer, Staples, saved $3 million in fuel annually simply by directing its drivers to drive more slowly.
It was eventually realized that by limiting the company’s delivery speed to sixty miles per hour, Staples reduced its transport fleet’s fuel consumption from 8.5 miles per gallon (mpg) to 10.4 miles per gallon, thereby utilizing 20 percent less fuel in the supply chain process and altogether reducing its CO2 emissions.
Seemingly ‘little’ tweaks like the one from Staples have therefore shown that companies can rethink the components of their supply chain inputs, altogether reducing their carbon footprints and incorporating sustainable supply chain processes.
2) Using recycled materials to reduce plastic pollution
A significant detriment to environmental sustainability is plastic pollution. Scientists confirm that excessive plastic in the global environment can result in “plastic bio-accumulation.” Sorely, about 8 million plastic waste escapes into the oceans from coastal nations every year. Meanwhile, plastic production is expected to double by 2050, having crossed more than 448 million tons by 2015.
Using recycled materials during the supply chain process can significantly reduce the plastic footprint in the global environment. Manufacturers can reprocess plastic and other materials like steel, glass, and cardboard.
The advantages of recycled materials are cross-cutting. Recycled materials do not only save energy—since recycling materials require less energy than refining petroleum into virgin plastic, crushing and smelting iron ores, or transforming pulp wood into cardboard—they also save money.
Supply chain enthusiasts have noted that it is now possible to convert waste plastic into “3D printing filament”, a product manufacturers can use to create new products at a lower cost than plastic.
3) Improving product packaging
Closely related to the urgent need to reduce overall plastic footprint is the imperative for manufacturers to streamline and improve their product’s packaging as they carry out the supply chain process.
It is possible to save manufacturers money and benefit the environment by switching to streamlined packaging that uses fewer materials. The use of more efficient packaging allows manufacturers to layer more products onto one another, thereby reducing costs, improving supply chain efficiency, and ultimately reducing greenhouse gas emissions. Streamlined packaging can also lead to significant improvements in supply chain efficiency.
In effect, streamlined packaging can help manufacturers reduce transport costs, optimize inventory management, improve customer experience, enhance sustainability efforts, and improve overall supply chain efficiency.
4) Communicating sustainable supply chain initiatives to consumers
Manufacturers must not think that customers are not emotionally invested in a sustainable supply chain process. A Boston Consulting Group (BCG) survey found that 70 percent of customers are willing to pay a 5 percent price premium for sustainable goods. The US Small Business Association also found that four in five consumers buy environmentally friendly products and services.
Manufacturers must inform customers about their sustainable supply chain initiatives in order to achieve this goal. As a result of this extended PR campaign, customers, communities, and manufacturers can build a self-fulfilling loop in which they can maintain the trust of their customers that products are environmentally friendly and that their business objectives are aligned with the environment.
Conclusion
A sustainable supply chain is achieved through a variety of means and methods, both from an environmental and social perspective. Nevertheless, manufacturers must take responsibility for ensuring the environmental safety of the products that arrive through the supply chain process since the goal is to balance profitability with sustainability.
