Five Ways to Rethink Supply Chain Sustainability
Consumers know they no longer have to pay double the price for greener products. This assertion, however, doesn’t jive with common perceptions of “going green” because people generally connect sustainability to increased spending. The trick, however, is to re-conceptualize “going green” by recognizing the inherent cost savings that optimizing your supply chain and reducing redundancy can bring.
It’s like Patrick C. Penfield, assistant professor of supply chain practice at the Whitman School of management at Syracuse University in Syracuse, New York, says: “The supply chain generally costs a company money, and this is why companies are so focused on sustainability. The truth is, with the increasing costs of raw material and energy, it now makes sense for companies to embrace sustainability. The return on investment is now feasible for companies so that they can employ processes that use less energy and material,” – Patrick C. Penfield, assistant professor of supply chain practice at the.
So now you buy that shoppers expect you to make products more affordable and to deliver them in a more environmentally friendly manner, but you’re not sold on the idea that it’s actually possible to achieve these seemingly unrelated ideas by improving your supply chain. Well, it is and here are five ways to start:
1. Think Big Picture
Take a step back and evaluate your entire supply chain. Often leaders who are considering a push toward more sustainable business practices get bogged down in the myriad trendy and often costly upgrades available in the marketplace. While renovating your corporate headquarters with eco-friendly furniture and fixtures or replacing your gasoline fleet with all electric vehicles is a noble move, it’s not necessarily the most cost-effective or the most impactful. Redefining your approach to sustainability is.
This means identifying the changes that produce maximum impact for minimum cost. For many companies this is determining if distribution centers are relative to a retailer’s locations, if a minor improvement on wheel covers could reduce a significant amount of fuel consumption or if upgrading to an integrated supply chain management technology platform would improve efficiency and reduce operating costs. Whatever the change your company decides to pursue, remember that long-term sustainability means eliminating waste, not spending more.
2. Streamline Packaging
Effective packaging serves many important functions. It keeps a product in one piece. It communicates your brand message. It provides essential inventory and purchasing information. The list goes on. What packaging doesn’t and shouldn’t do, however, is create unnecessary waste or complicate the supply chain management process.
By critically evaluating the value that your current packaging brings or fails to bring to your supply chain, you can develop a plan for streamlining the amount of plastic, cardboard, metal and other materials you use so that you create less waste and ensure more efficient and worry-free handling of your goods. Beyond this, you may be able to cut your logistics costs and curb your carbon emissions simply by lessening the weight used to transport and warehouse your goods.
Check out http://www.packworld.com/ and http://www.sustainablepackaging.org/events/details.aspx?eventid=10005 for more information on sustainable and efficient packaging.
3. Build Relationships across the Supply Chain
Collaboration plus communication yields greater access and visibility across the supply chain, access to wider resources, the potential for building relationships with key decision makers and a lot of other really good stuff, including the strategic advantage of being able to better identify ways to eliminate waste and streamline warehousing and transport. One approach to building these relationships is through a Retailer Consolidation Program. A retailer provides a master purchase order, a 3PL (like CaseStack) manages its fulfillment and then consolidates multiple suppliers’ products into one efficient truckload.
By collaborating with retailers to consolidate warehousing, order fulfillment and transportation, suppliers capitalize on economies of scale, thereby lowering logistics costs, improving performance and significantly decreasing their environmental impact. These programs achieve measurable cost savings and lower carbon emissions, while fostering cooperative relationships between supply chain partners that enable companies to better tackle any financial and/or logistical issues that may arise.
4. Consolidate LTL Shipments
It doesn’t take a rocket scientist to realize that combining smaller, less-than-truckload orders destined for the same retailer makes more financial and environmental sense than running multiple half-empty trucks to the same location. Not only do you reduce emissions and take traffic-clogging trucks off the road, but you benefit from full truckload pricing, save time and make the retailer’s job easier. In addition to basic LTL consolidation on a per shipment basis, CaseStack’s Retailer Consolidation Program combines orders bound for a single retailer into one master purchase order, thereby streamlining order placement, shipping and tracking. It all boils down to one idea: eliminate waste and cut costs.
5. Upgrade and Integrate Your Technology
So far the name of the game has been find ways to eliminate waste from your supply chain and this step is no different. In order to accomplish all of the above approaches to making your supply chain more sustainable, you must equip yourself with the right tools. In this case, “tools” mean technology. The right technological tools enable you to optimize your business processes by identifying points of redundancy and optimizing how your transportation and warehousing resources are utilized. The key to this process is finding a platform that solidly and smoothly integrates your existing systems with those of the retailers and service providers along the entire supply chain. Further, it is essential that you find a technology provider with a reliable and knowledgeable customer service team, because the last thing that any company wants are unnecessarily wasted resources during system integration, particularly when the objective is to reduce, not create, waste.
The Last Word
Business and operational sustainability is not going away. Consumers expect companies to make every effort to satisfy their moral concerns and while giving them the best price possible. With more and more retailers like Walmart taking the cue from consumers by requiring, in one way or another, that their suppliers develop, implement and achieve sustainability benchmarks, the question becomes not “should we pursue sustainability initiatives?” but “how do we put those initiatives into action in a cost-effective way?”
To CaseStack, sustainability is synonymous with cost-savings. In every deal we make and every pallet we move, we consider the five approaches to efficient logistics review above. Check out our corporate website and learn more about our approaches to efficient, sustainable logistics.