Sustainability In the Supply Chain Is the Need Of the Hour Rising temperatures, glacial ice caps melting, rise in sea levels, and extreme weather conditions bear serious consequences for global supply chains

By Nitish Rastogi

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Climate change is real. In fact, it will not be a stretch to say that climate change is currently the biggest threat that global supply chains are facing today and is responsible for shortages and disruptions in several industries. These are challenges that will only become more threatening if they are not curbed, paying strict attention to supply chain sustainability.

Rising temperatures, glacial ice caps melting, rise in sea levels, and extreme weather conditions are all a result of this and bear serious consequences for global supply chains. Decarbonisation, which calls for reducing the amount of carbon in greenhouse gas emissions, can help improve our present condition.

Fighting climate change with green logistics

The dangers posed by climate change are grave but not impossible to combat. Sustainability in the supply chain, while tricky to practice, is possible. Production and transportation activities are energy-intensive, which means the potential for implementing greener practices lies here.

By establishing the concept of eco-friendliness in your supply chain, a green logistics system can be introduced. This can be done by defining what 'going green' means for your business, and setting goals accordingly. Once a clear long-term plan is developed, it is important to get the support of your workforce from the ground up and instill the sense that working towards a green supply chain is a permanent business value.

Three stages of building a sustainable supply chain:

  1. Planning: Processes are designed to reduce emissions and meet demand with ethical sourcing. More time and energy is spent on forecasts to reduce inventory that is no longer in use. Circular supply chains are supported, and end-of-life scenarios are predicted. Planning processes beforehand helps in visualizing the supply chain and preventing delays. Once the cycle is complete, the processes can be compared with the plan to locate areas of improvement.
  2. Manufacturing: An essential aspect of sustainable supply chain manufacturing is monitoring energy consumption as a function of production volume. Safety management ensures a sustainable workforce.
  3. Logistics: Supply chain logistics help track, measure, and even optimize CO2 and energy consumption. It helps opt for resources that are energy efficient and CO2 neutral. A sound logistics and supply chain management system optimizes the various legs of the process.

Putting sustainability into practice

Several multinational corporations have dedicated themselves to working with only suppliers that adhere to social and environmental sustainability standards. Effective measures must be taken to optimize each activity to reduce the overall ecological impact to make end-to-end green logistics implementation possible.

Ethical sourcing of goods

Ethical and sustainable sourcing of materials and products has gained a lot of importance in eco-friendly supply chain management in the last few years. Businesses evaluate their supplier relationships and partner with only companies dedicated to human, animal, and environmental wellness. For manufacturers, it means procuring green and sustainable raw materials. For retailers or e-commerce sellers, it means promoting sustainably manufactured products and using green materials for packaging and deliveries.

Sustainable warehousing

Although often overlooked, warehouses and storage centers use huge amounts of energy in supply chains. For companies that aim to implement greener practices, sustainable warehouse management is an important area to consider. This can be done by investing in lighting and equipment that reduce energy consumption and maintenance costs without compromising productivity. Where the warehouse is located is also important. Building warehouses in cities instead of the outskirts can reduce the need for additional infrastructures, such as water and electricity connections, and increase proximity to urban customers.

Green packaging

One of the biggest challenges faced by the shipping and logistics industry, especially by e-commerce, 3PL, and courier service providers, is the management of the waste produced due to packaging. The modern customer is environment-conscious and demands orders to be delivered in eco-friendly packages that use minimal plastic and non-biodegradable materials.

Network optimization

Transportation is an energy-intensive activity in logistics. With the help of strategic network designing for distribution and delivery operations, supply chain companies can reduce fuel usage and fuel costs significantly while reducing the time taken to transport goods from one point to another. With the help of network optimization, businesses can ensure the accurate placement of supply chain nodes, warehouses, and distribution hubs, as well as multi-echelon inventory optimization across the supply chain, thus improving distribution efficiencies and reducing energy consumption for businesses.

Route optimisation

Day-to-day logistics involve route planning and executing innumerable deliveries on time. AI-driven route optimisation solutions help in planning daily dispatches and delivery routes, considering real-world constraints such as zone-based restrictions, traffic conditions, and rider preferences. All of these result in faster deliveries, lesser miles driven, and fuel cost savings.

Achieving a zero-carbon economy is an arduous task, but not impossible. It demands an economic transformation in favor of a safe and stable climate. Businesses, policymakers, and financial institutions must work together to create a socially inclusive environmental evolution for a healthier, happier planet.

Nitish Rastogi

Founder and CEO, Locus

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