Across the supply chain, sustainability has become more than just a clever buzz term. Whether it’s cutting back on the use of fossil fuels, finding better ways of using resources, supply chain sustainability is on the rise. The key to implementing a sustainability program within logistics, a company needs to fully comprehend the term, how important it is for the future of logistics, why it’s needed, and the hurdles that exist.
Noted below are a few of the facts about supply chain sustainability, so you can be prepared to plan and activate one with efficiency.
Most sustainability initiatives in logistics became popular as increasing government regulations impacted the operations of logistics providers. Clean energy initiatives such as reductions in vehicle emissions stimulated the clean energy initiative, which has caused carriers to spend in excess of $1 billion on research for reducing vehicle emissions by 50%. However, it’s not just government regulations that have lit the sustainability torch. Consumers are becoming increasingly educated on global warming and the need for sustainability across manufacturing and the supply chain. In fact, it’s estimated that nearly 75 percent of consumers are willing to pay a premium or wait extra time for climate-friendly products or transportation options.
Like any other initiative, activating a sustainability program starts with understanding, transparency, and integrity. With a sustainability program – especially in transportation or manufacturing, open-communication about the resources used that are environmentally conscious is the best way to create a sustainability program. It’s also important for any supply chain participant to analyze the cost-effectiveness of activating a program, and also creating a plan for integrating one that is scalable.
Many organizations, including government agencies, start small and expand their sustainability programs while keeping costs and research at a minimum. A great example of this is how a few foreign entities have created sustainability programs. In France, the Ministry of Education activated a program that recycled their used toner cartridges, sent them back to the manufacturer to be refiled and used in the education system. A Hong Kong agency was able to save nearly $50,000 on energy costs simply by installing LED traffic lights. For a large company like Bayer, their sustainability programs have trickled down to their suppliers. They created a supplier code of conduct which their vendors must follow to earn their business.
The important commonality with each of these three examples is that each was able to remain profitable – proving that a sustainability program can be cost-effective when activated efficiently and with a focus on scalability.
It always seems that money and cost is the enemy of progression. This is a statement of fact in the logistics world as well. However, while sustainability requires an initial investment of capital, the long-term savings can pay for several programs within a short period of time. However, money is not the only hurdle that exists with activating a sustainability program.
Arguably the biggest hurdle to creating and activating an effective sustainability program is getting all parties to buy-into the program. For shippers and manufacturers, it’s a challenge to get all team members to follow company policy – but with sustainability, the biggest challenge in this department is that it requires some extra effort and education. Finding creative ways of motivating team members is a great way to improve your chances of creating a positive sustainability program.
Packing and shipping are simplified when a company can use materials that are easy to use, and cost-effective. The hurdle hers is that most renewable or recycled materials used for shipping can cost extra – and might require different techniques for assembly. A great example is removing the use of foam for packaging and instead, using air-inflated recycled plastic shipping pillows.
Like any new program, it’s important to grow and expand slowly. While many partners might want you to increase scalability efforts, the smart logistics partner will understand the value of growing without impacting your ability to serve customers. In many instances, a shipper can depend on the experience of a professional 3PL to help them navigate the objections that occur with many sustainability programs.