Sustainable Supply Chains ‒ Critical to Global Business Growth

It is imperative to align the sustainability objectives and activities related to supply chain to the larger organizational strategy. Many organizations have created their net zero strategy and its progress is measured in the form of environmental, social, and governance (ESG) criteria and materiality index. An organization’s net zero strategy is the starting point for the Supply Chain team to start planning their Sustainability journey.

Let’s take a quick look at the building blocks of a Sustainable Supply Chain:

1. Sustainable Procurement ‒ Assess supplier ecosystem Corporate Social Responsibility (CSR) performance, monitor Scope 3 upstream GHG footprint and support end-to-end ecosystems to achieve CSR ambitions.

• Green Lean Digital Factory ‒ Transform factory processes into efficient energy, water, and material manufacturing processes.

• Sustainable Warehouse and Distribution ‒ Redesign industrial and Supply Chain footprint strategy, implement best-in-class planning processes to limit material wastes and CO₂ emissions in networks.

• End-to-End Product Transparency & Product Lifecycle Management ‒ Ensure end-to-end traceability on products & flow information and the product lifecycle by capturing and sharing data across the Supply Chain ecosystem.

• Closed Loop Supply Chain & Circular Economy ‒ Enable a new circular business model through reversible Supply Chain and manufacturing operating models.

Designing and implementing such a comprehensive framework requires strong determination and support of leadership team, combined with clearly defined performance metrics around cost, service, and impact on environment. A good way to start the process would be to understand where the organization currently stands in terms of carbon emission, waste generation, and employee and partner awareness on sustainability. There are multiple technology tools available in the market to quickly make the assessment.

1. Carbon Impact Calculator ‒ The calculator helps in estimating and quantifying the carbon impact of various supply chain services like production, warehousing, and transportation by using global standards and data.

• Supply Chain Sustainability Assessment (SCSA) – The assessment does a mix of qualitative and quantitative comparisons against the maturity index to identify specific areas to focus on and invest in.

• Life Cycle Assessment (LCA) – LCA assesses environmental impact associated with all stages of a product or service.

What makes Sustainable Supply Chains challenging (and interesting at the same time) is to find a creative balance and harmony with the conventional objectives of service, cost, and reliability. As per Capgemini Research Institute’s recent report on Sustainable operations ‒ a comprehensive guide for manufacturers, 79% of manufacturers have experienced improved efficiency and productivity through sustainability initiatives. Some of the proven use cases to test the synergies of these multi-faceted supply chain objectives are distribution center (DC) network optimization, logistics control tower, shared warehouses and transportation, reverse logistics, and electric vehicles.  

While it feels like a lot to do to achieve the coveted sustainable supply chain, it is a long-term journey starting with a robust plan, determination, and small, but impactful, steps.