With high consumer focus and preference around sustainable products, businesses globally are trying to adjust their product offerings, making them more sustainable than before. But with growing awareness among consumers, now it is not just about the product but how it reaches them. Hence, aligning supply chains to be more sustainable has become the need of the hour.
There are surveys that reflect a significant shift in corporate priorities recently. 81% of companies prioritize ethical and environmental sustainability. Also, 83% are keen on being perceived as environmentally conscious and ethical brands. Companies want to prioritize sustainability without the additional burden of added costs. To meet these priorities, supply chains become a crucial lever.
A sustainable supply chain differs from the traditional one at its core. It integrates environmental, social, and economic factors into its operations. The core of the sustainable supply chain focuses on making money for the company while caring for our planet.
Key Elements of a Sustainable Supply Chain:
Integrating these components is the first step toward building a sustainable supply chain, and here are some interesting numbers to substantiate it.
The importance of sustainable supply chains is highlighted by some compelling global statistics:
These figures demonstrate supply chains' substantial role in environmental sustainability. These can be the quantitative reasons for the more logically driven.
How to design and manage the supply chain to make them more sustainable. Here are five practices that companies can adopt for this.
Companies are increasingly opting for eco-friendly transportation options. Electric and biofuel vehicles reduce carbon emissions and fuel consumption and also reduce costs. Combining it with efficient route planning and shipment consolidation, businesses can significantly lower transportation costs and reduce their environmental impact.
Advanced technologies like automation and data analytics optimize operations. Accurate forecasting with the help of big data analytics minimizes overproduction, aligning production closely with consumer needs and reducing process and energy wastage.
Selecting suppliers who provide sustainable materials is crucial. This supports the environment and meets the growing consumer demand for responsible products. Long-term relationships with suppliers committed to sustainability can provide substantial cost savings and a more reliable supply chain.
Adopting green inventory management practices like JIT, EOQ, VMI, etc., reduces waste associated with overstocking and minimizes storage costs.
Implementing recycling and reuse practices in the supply chain reduces waste and lowers raw material costs. Designing products with recyclability and reusability in mind reduces environmental impact and can lead to cost savings.
While sustainable supply chains are the way forward, and we have discussed about sustainable practices as well, there are some challenges in adopting sustainable practices, such as:
By adopting sustainable logistics, technology, and other best practices, businesses can build supply chains that are both environmentally responsible and economically beneficial. Holocene is built to support your company in this transition. Holocene offers tools and insights for a more sustainable, efficient future in supply chain management.