Achieving Sustainability

Practical Steps to Green Your Supply Chain Operations

It is becoming increasingly imperative for companies to adopt more sustainable business practices. Climate change is a global phenomenon with serious repercussions.

While it is everyone’s responsibility to address climate change collectively, industry is among the top contributors to carbon emissions. As such, industrial operations must make more significant changes to help fight against and reverse the disastrous effects on the planet.

Many companies already are attempting to go green by adopting more sustainable business practices but little changes here and there are not going to be enough. Instead, companies must take a closer look at their entire supply chain processes, from material sourcing to the delivery of the final product, to develop a more holistic approach to sustainability.

Why Your Company Should Prioritize a Green Supply Chain Over Carbon Offsets

Before we dive into strategies for greening your supply chain, it’s helpful to dive deeper to better understand why carbon offset practices are not enough. Since carbon offsets became a thing, many companies have focused on these offset credits to make the claims that they are carbon neutral and sustainable.

The issue is that companies can purchase carbon credits as a means of “canceling out” their emissions while still getting away with operations that have a negative impact on the environment. For example, a popular way of doing this is buying into a reforestation program.

Companies can effectively say they are a sustainable business simply because they are helping with reforestation and using that as an offset credit, meanwhile, they are still getting away with dumping large quantities of pollution into the environment behind the scenes with their processes. It doesn’t help to simply participate in a performative eco-friendly practice if the majority of a business’s operations are still harmful.

As an environmentally conscious company, you can take advantage of alternatives to the carbon credits scheme, which include purchasing or producing renewable energy. And ultimately, working toward a more sustainable supply chain is one of the most effective things you can do.

How to Achieve Greater Sustainability in Your Supply Chain

Building a sustainable supply is about addressing the issue from a more holistic viewpoint. In other words, it tackles sustainability from the inside out as a way of addressing the whole issue rather than surface-level practices.

To achieve this level of sustainable supply chain management, there are six key areas to focus on:

1. Stakeholder Support

First, to make the changes necessary, you’ll need support from the company’s key stakeholders. Without their support and investments, you likely won’t be able to accumulate the funds needed to make effective and lasting changes.

To do this, it helps to create a plan that will ensure stakeholder buy-in. Start by identifying the key stakeholders you will need approval from. Next, you’ll want to draw up a timeline for the project to be brought to the stakeholders at different stages, such as reaching out to executives early on for budget approval.

Before reaching out to stakeholders, you’ll also want to frame the project in the right way so that the stakeholders can clearly see the value in approving and investing in the project. Make sure you are very clear about the goals of the project and how it will benefit the profitability of the company.

2. Supplier Management

Once you have approval and the budget, you can start diving into making the necessary changes, which starts with evaluating your suppliers.

If you are going to build a sustainable supply chain you must set higher standards for the suppliers you work with. Having sustainable suppliers is key to sustainable supply chain management.

Look for suppliers with ethical sourcing practices and who are actively attempting to manage their emissions. They should also be compliant with industry regulations and adhere to social standards by participating in fair trade practices and having ethical human rights policies.

3. Sustainable Material Sourcing

Sustainable product sourcing is another important factor when building a greener supply chain. This means obtaining raw materials in a way that is both socially ethical and eco-conscious. In other words, the materials you procure should not result in a negative environmental impact or a negative impact on the people and the culture that is providing the material. The best way to do this is to ensure your materials are obtained through Fair Trade practices.

4. Automation

To ensure your supply chain is as efficient as possible, meaning it uses up fewer resources and reduces carbon emissions, you must implement automation technologies. The right tools and technologies are key to running a sustainable supply chain.

Thankfully, advances in tech, such as AI-powered systems now make it easier than ever to automate and optimize various supply chain processes. Some examples of tools and technologies to look into include warehouse robotics, IoT devices, data analytics, blockchain, and smart tracking and transportation.

5. Closed-Loop Life Cycle

Aside from carbon emissions, another major issue with supply chains is how much waste they produce. Most products today have a linear life cycle, meaning after they reach the consumer, they are eventually discarded. On the other hand, a closed-loop supply chain seeks to recycle and reuse materials by bringing them back into the manufacturing process, which reduces waste.

Closed-loop supply chains can not only help the company save money, but they can also help save energy and conserve resources, which overall help reduce pollution and carbon emissions. The component of a closed-loop supply chain is tracking your products and materials and creating a program where customers send those products or materials back instead of throwing them away.

6. Sustainable Transportation

The last step in designing a sustainable supply chain is implementing greener transportation strategies. The transportation sector alone contributes 29% of total greenhouse gas emissions, so finding a way to reduce those emissions in your supply is crucial.

You can achieve this by using more fuel-efficient vehicles, using route optimization software, and maximizing capacity by consolidating shipments. There are already smart trucks and logistics technologies being designed for these exact purposes to help companies reduce the environmental impact of their transportation practices.

In Summary

As climate change and other environmental issues become a growing concern, designing more sustainable supply chains is a must. It no longer helps to simply adopt surface-level green practices. You must transform your company operations from the inside out by introducing more sustainable supply chain initiatives.

By Indiana Lee, BOSS contributor