During the past century, irresponsible business practices greatly harmed the planet. Air pollution, waste, carbon emissions, deforestation and other commercial byproducts created problems that threatened both our planet and the health and safety of workers and customers.
In response, some companies implemented supply chain sustainability practices that led to ecologically responsible and environmentally friendly decisions and lifestyles, which will benefit current and future generations.
Environmentalists emerged who concerned themselves with the protection of the environment and sustainability of natural resources. Many of them began to only buy from the forward-thinking, environment-aware companies. Demand for products noticeably increased or decreased, depending on whether its manufacturer exercised supply chain sustainability, including sustainable production.
Modern supply chains continue to determine the best trade-offs between cost, profit, and customer service. However, because of today’s concern for supply chain sustainability, organizations are now going green by including environmental goals when they optimize the supply chain. Sustainability includes economic, social, and legal aspects in addition to environmental concerns. By caring about the environment as much as customers do, green companies build positive brand awareness and improve profits over the long term.
Going green includes many profitable sustainability solutions that involve processes, logistics, and technologies. Here are nine of them:
1. Green supply chain
An ever-increasing concern for environmental issues has caused consumers to inquire about the supply chain details behind the products they want to purchase. They ask about how green a company’s manufacturing process and supply chain are, the size of their carbon footprint, and their recycling practices. This means that to compete, companies must concern themselves with environmental issues and change their supply chain to a green supply chain. This green supply chain management concerns itself with the design, sourcing, manufacturing, and the delivery of products. Even the disposal of products made and sold after they are no longer of use is of concern.
2. Sustainable production
Sustainable production of goods and services is the practice of production processes that conserve energy and the natural resources and don’t pollute the earth. This type of production benefits everybody because it is safe and healthy for the organization’s workers, the consumers, and communities. In the end, the enterprise that practices this is more productive and economically viable.
3. Recycled packaging
It is best to reduce, recycle and reuse whenever possible. Your green customers will expect the green product they purchase from you to come in recycled packaging. To package your goods in anything else would undermine your marketing efforts and give your company less credibility as a green company.
4. Green inventory
Good flow of material makes a supply chain both efficient and sustainable. Material flows well throughout a supply chain operation only if the inventories have been well managed. Because of the growing concern worldwide for protecting the environment, inventory management must now also be green. Various ways to protect the environment must be found.
Green inventory is inventory that includes environmental considerations in addition to cost considerations. To achieve green status, focus is given to transportation energy use, transportation operations and logistics costs, and traditional warehousing costs. Details such as waste costs, fuel and wage costs, and driving time are scrutinized. The product itself must be good for the earth or for human consumption.
This is an emerging field that holds promise for reducing both emissions and costs through standard inventory models not yet formulated. One interesting finding is that horizontal collaboration enhances outcomes.
5. Transportation optimization
Transportation optimization is the process of finding the quickest and cheapest way to get products into customer hands while maintaining a preset level of customer service. The customer can be either an internal or external customer.
Optimization of transportation can be either strategic or tactical. The strategic kind refers to optimization that is done through studies after operational capacity has maxed out or budget determination is needed.
Tactical optimization is the more common, and the most known, kind of optimization of transportation. This one involves the use of computer software. Constraints of equipment availability and use, allowable product mix, desired service level, and costs are put into optimization software so that the best transportation-related solutions can be discovered.
6. Carbon offset
In an effort to compensate for greenhouse gases such as carbon dioxide, carbon offsets are done to reduce emissions that are made elsewhere. They are considered an important tool for the improvement of sustainability and for maintaining stable economies. These offsets are measured in tonnes of CO2e, which is carbon dioxide-equivalent.
There are two markets for carbon offset. The compliance market consists of governments, companies and others who purchase offsets so as to be compliant with laws. The voluntary market includes governments, companies, and individuals who voluntarily buy offsets to make up for greenhouse gas emissions that their businesses put into the air when they use transportation, use electricity, or perform some other activity.
Offsets usually support projects such as energy efficiency projects, forestry projects, destruction of landfill methane, and the destruction of agricultural byproducts or industrial pollutants. Renewable energy, which involves hydroelectric dams, biomass energy, or wind farms, is a common project as well.
7. Sustainable waste management
The idea behind sustainable waste management is to use the least amount of natural resources possible, reuse any materials taken from nature as many times as possible, and create as little waste as possible. By doing this, the earth’s resources will still be there for future generations to enjoy.
Ways to cut down on waste include:
- Composting lunches
- Recycling things when you cannot avoid waste
- Donating useful items
- Replacing common break room items with reusable options, discouraging the use of things like plastic utensils, paper cups, and disposable food containers
- Reducing the use of paper and ink through the use of hand dryers in the bathrooms, not using color ink, printing double-sided, keeping company-wide documents available online, and so on
8. Lowered energy usage
Energy efficiency is a key resource for social and economic development. Using less energy benefits stakeholders and the rest of society. The resulting profitability and competitiveness make energy efficiency a strategic advantage for companies. Implementing energy efficiency changes could be problematic if one were to implement the expensive new technologies that are being developed. However, there are inexpensive ways to lower energy usage.
To lower energy usage, an organization could:
- Maintain, furbish and rearrange equipment so as to combat degradation of the equipment
- Retrofit or substitute obsolete equipment with new technology
- Minimize wasted energy and heat loss by installing insulation and making use of exhausted heat
- Change the process control to improve not only energy efficiency, but also materials efficiency and process productivity
9. Chemical management
Products often contain chemicals that were introduced to them in the manufacturing process. According to scientists, nearly forty percent of the manufactured chemicals we use daily are toxic. Chemical management can be achieved through the development of reporting tools and benchmarks. It should be noted that some companies do not think of chemical management as a green concept but as just something that is required by regulation. Other companies do.
Thanks for reading "9 Profitable Sustainability Solutions for Supply Chains", by the Linchpin Team in Chicago, Raleigh, and Wake Forest.