Sustainability Current Events: Supply Chain

Ashley Uyeta 

Like I’ve stated plenty of times before, consumers are becoming more and more conscientious about the sustainability of the products that they buy and the companies that they align with. 

I’ve talked about sustainable consumer behavior, products and services, and the types of promotions. But what about the supply chain? 

As a consumer, the supply chain is not something one thinks about in their consumption of goods and services. So what is a supply chain? A supply chain is the sequence of processes involved in the production and distribution of a commodity. Just because the supply chain isn’t seen as prominent as a product or a company, doesn’t mean it’s excused from scrutiny. Even if a company were to create a sustainable product and promote it in a responsible way, does it really matter if the entire process of creating the product contributes to the exploitation of natural resources?

“More than 90 percent of the damage caused to the environment by consumer packaged goods (CPG) producers - including 80 percent of greenhouse gas emissions - comes from the supply chain” (Johar). 

As more generations are entering the market, demand increases for goods and services are increasing. Trying to be sustainable, yet meeting the increasing demand of consumers can be quite complex. Supply chains are everywhere, spanning across many countries, each with their own set of standards. 

“In addition to greenhouse gas emissions, they include water scarcity, issues related to land use, toxic waste, water pollution, deforestation, air quality and energy use” (Johar).

Specific actions that can be taken to make supply chains more ethical and sustainable include: 

• Reduce waste by simplifying supply chain process

It's best to make overall small incremental changes, instead of large drastic changes to see improvement over time. Using analytics and technology to help reduce waste while also speeding up the process can enhance overall sustainability of the supply chain process. 

• Ensure ethical sourcing and introduce transparency 

Increasing transparency of where raw materials are being extracted and produced will help keep supply chains moving towards the right direction when it comes to sustainability. Some ways to ensure more transparency of ethical sourcing is by using blockchain technology and Internet of Things (IoT) devices. "Blockchain technology is a useful way to capture and verify supplier sourcing practices. Internet of things (IoT) devices can monitor and report on working conditions and environmental factors" (Johar). 

• Minimize overproduction through efficient supply and demand planning 

Underproduction and overproduction creates rework and waste, especially when supply and demand are not aligned correctly. By using artificial intelligence, machine learning, and predictive analytics, the demand and forecast can be foreseen to maximize efficiency of the supply chain process. 

• Decrease fossil fuel consumption by optimizing routes

Even though there have been implementations of electric and other sustainable vehicle options, it will still take a while before supply chains can utilize this. One way to help reduce the greenhouses gases emitted from the supply chain is creating the most optimal route for transportation. Ways that could potentially help would be using artificial intelligence working with GPS devices to find the most optimal routes, as well as keeping it up to date in real time in case of congestion or any other type of issue that would hinder the best route to take. 

• Fully utilize containers and transportation to consolidate shipments

If a container is empty or not completely full, it can be wasteful to send these containers around. Containers should be either filled with the products that need to be shipped and consolidated that will reach multiple suppliers and multiple final destinations. 'This makes the most efficient use of assets (e.g., containers and trailers) and transportation, reducing the total amount of greenhouse gases generated per unit of cargo" (Johar). 

These are just a few steps that can be applied to the supply chain to help create a more sustainable process. While there are still plenty of actions and steps that can be taken, starting off small and creating achievable goals will help increase the ease of implementing newer ideas about maximizing the efficiency and sustainability of the supply chain. Now we're on our way to creating now only sustainable products and companies, but the supply chain as well!

References

Johar, P. (n.d.). Six steps to a more ethical and sustainable supply chain. SupplyChainBrain RSS. Retrieved May 17, 2022, from https://www.supplychainbrain.com/blogs/1-think-tank/post/29477-how-to-create-a-more-ethical-and-sustainable-supply-chain#:~:text=Reduce%20waste%20by%20simplifying%20supply%20chain%20processes.&text=Good%20analytics%20and%20reporting%20combine,an%20incremental%20improvement%20to%20sustainability.