5 Key Takeaways from the Gartner Supply Chain Symposium
4 minute read
4 minute read
The rise of sustainability in all areas of business is undeniable. In recent years, sustainability has transformed from a corporate buzzword to a business priority, and the supply chain industry is no exception.
Sustainability trends are rapidly accelerating, with 84% of supply chain leaders planning on investing in sustainability efforts. To thrive in today’s global world, organizations and brands need to understand the impact their supply network has on the planet and prioritize making positive strides towards a greener future.
Supply chain sustainability is how companies consider the environmental and human impact of their products’ journey through the supply chain. That journey encompasses everything from procurement to production, storage, delivery, and transportation.
Sustainability as a concept is vast, and includes endeavors to mitigate climate change, protect the ecosystem, cut back on resource use, and reuse materials—just to name a few. In the supply chain industry, the conversation is often focused around the environment, and with good reason—global supply chains account for 80% of the planet’s carbon emissions, and 92% of an organization’s total greenhouse gas (GHG) emissions comes from its supply chain.
These numbers may seem surprising, but by their nature, supply chains use large amounts of energy, labor, and resources from production to delivery. Consumer companies can enact sweeping changes to their internal operations, but it would only scratch the surface of their sustainability problems. To truly take a step in the green direction, organizations need to transform their sustainability at the source: their supply chain.
Vetting and selecting suppliers and manufacturers that consider sustainability in sourcing and production can help decrease a product’s environmental impact. Examples include choosing suppliers that use raw materials with a less harmful footprint and working with partners that emphasize renewable resources.
Making sustainability a nonnegotiable part of a business’ strategy and working with likeminded organizations is a first step towards lessening the environmental effects of a product’s supply chain journey.
With sustainability, less is often more. Sustainability at its core is about reduction—reducing the number of resources used, pollutants emitted, and waste produced. Companies can analyze their supply chain network and ask themselves:
Reshoring—or bringing manufacturing back to one’s own country rather than overseas—is also gaining traction as a way for consumer companies to embrace sustainability. By eliminating the need to transport materials and products from abroad, reshoring helps organizations drastically reduce the transportation emissions associated with overseas manufacturing.
All transportation methods impact the environment, but some are less damaging than others.
Take the example of freight transportation. The main freight shipping modes are trucking, rail, water transport, and aircraft. Rail has the lowest GHG emissions profile, followed by water transport, trucking, then aircraft. Rail is undoubtedly one of the greenest ways to move freight, accounting for just 1.9% of U.S. transportation related GHG emissions, even though railroads are used for 40% of long-distance freight volume.
Air freight is the worst for the environment, emitting 2.6 pounds of GHG per ton-mile, compared to 0.47 for trucking, 0.08 for water transport, and 0.05 for rail. Due to the environmental consequences of air freight, logistics providers are investing in low-carbon sustainable aviation fuel, which performs similarly to petroleum-based jet fuel, but with a fraction of the carbon emissions.
To reduce the pollution from trucking, more companies are turning to electric vehicles for last-mile delivery. That’s because when compared to internal combustion engine vehicles, electric vehicles produce up to 54% fewer GHG emissions. Delivery companies like FedEx and UPS are embracing hybrid and electric vehicles to do their part in the fight for a sustainable future.
Circularity is another industry buzzword—but what does it mean? And what does it have to do with sustainability?
In a linear economy, resources are extracted, and goods are produced and consumed, only to become waste at the end of their cycle.
In a circular economy, the focus is on reusing goods, so resources aren’t exhausted and discarded. Instead of the “take, make, and dump” model of a linear economy, circularity prioritizes eliminating waste, circulating products and materials, and giving nature a chance to regenerate.
It’s well known in the industry that 80% of a product’s environmental footprint is determined in the design phase. This means to embrace supply chain circularity, companies must design products with the entire supply chain and end game in mind. What happens to the product after a consumer uses it? Can it go back to the beginning of the supply chain process, be turned into something else, and be distributed again? These are the questions organizations should ask themselves to embrace circularity and, ultimately, sustainability.
Improving sustainability is a daunting task, and companies may not know where to begin, or even what their supply chain’s sustainability issues are. In fact, a lack of visibility across a company’s supply chain is the biggest reason why leaders struggle to measure the carbon footprint of products.
To get a comprehensive view of their supply chain’s entire network and identify areas for improvement, businesses should consider investing in supply chain consulting services. Outside expertise presents a new viewpoint and strategy for improving a corporation’s sustainability in a way that benefits both the company and environment.
At Catena Solutions, we offer a full suite of services to build resilient supply chains that help businesses and the planet. Our team of over 250 consultants and experts is ready to help your company improve its supply chain sustainability, resiliency, and performance.
Ready to talk to our team and learn more? Contact us today.