Supply Chain and Logistics Management

The Rise of Sustainable Supply Chain Practices

March 25, 2024

Green leaf laying between cardboard shipping boxes

Whether you are a novice just considering a career in supply chain/logistics operations or are a seasoned career veteran adapting to modern industry sensibilities, a firm understanding of green supply chain practices is essential. As business leaders and general consumers become more aware of environmental issues, the topic of sustainable supply chain management has become a prevalent subject among professionals, academics, and the public at large.

Understanding Sustainable Supply Chain Practices

The term ‘supply chain sustainability’ encompasses all supply chain/logistics practices with environmental benefits. Professionals can improve sustainability across the supply chain by sourcing eco-friendly materials and reducing carbon emissions in delivery. 

Because they often focus on the efficient use and optimized consumption of resources, green supply chain practices can generally streamline operations and deliver a solid return on investment (ROI). Most sustainable supply chain practices adhere to one or more versions of the common ‘5 Rs,’ driving improvements in areas such as reduction, recycling, reuse, redesign, and rethinking.

Importance of Sustainability in Supply Chain and Logistics

As described above, the definitive characteristic of a green supply chain practice is its ability to cut carbon emissions or address other key environmental concerns. We have also mentioned that sustainable supply chain practices can boost efficiency, cut costs, and improve an organization’s financial bottom line. However, there are other common green supply chain benefits, many of which will be covered at some length as this article progresses. Sustainability in the supply chain can:

  • Improve public reputation and consumer outreach.
  • Foster and strengthen community and professional partnerships.
  • Create “win-win” business opportunities.
  • Benefit local hiring and fair labor practices.
  • Promote a positive and productive work culture.
  • Aid in general chain risk mitigation.
  • Drive ongoing supply chain improvements.

How Sustainable Supply Chains Drive Business Transformation

Even the most eco-friendly organizations must focus on operational efficiency and ROI. With these ‘bottom line’ factors firmly in mind, organizations are paying close attention to the ways in which green supply chains can limit operational risks and drive revenue generation.

Reducing Operational Risks With Sustainability

While no management practice or approach can eliminate risk, an emphasis on sustainability in the supply chain can help organizations better understand, monitor, evaluate, and address risks to avoid major problems and take advantage of promising opportunities. 

For example, Deloitte, a multinational financial services giant, explains in its article “Managing Risk Through Sustainable Supply Chains” that an agri-food company might find most suppliers of a particular commodity facing water scarcity in their primary supply basin. The company should at least work with these suppliers to develop risk mitigation strategies. It could also find alternative suppliers in regions without these issues or where drought patterns differ from those in the first region.

Driving Revenues Through Sustainable Practices

If you want to improve your organization’s financial bottom line, a few things can take you further than effective operational risk identification and management. However, this is only one among several different areas of supply chain operations that can benefit financially from green practices.

The Deloitte white paper “Sustainable Supply Chain Transformation” highlights how sustainability in supply chain and logistics can cut costs, streamline operations, and generate revenue. It details how these practices can create and sustain value and outlines new business opportunities, value propositions, distribution channels, and revenue streams.

Improving Supply Chain Sustainability

While the advantages of a sustainable supply chain are clear, the methods and tools required to achieve them can be puzzling and complex. To complicate matters further, some of these methods are mutually exclusive or inadvisable due to poor ROI. Read on for some advice on choosing and implementing effective, sustainable supply chain practices.

Strategies to Reduce Emissions in Transportation and Logistics

One of the best ways that a supply chain/logistics company can promote a healthier environment is by reducing the carbon emissions produced by vehicles during the ground delivery process. The trucking distribution experts at A Tech have identified “7 Ways to Lower Your Carbon Emissions in Trucking and Logistics”: reducing transportation distance, using low-emission vehicles, improving vehicle efficiency, adopting sustainable packaging, contracting with renewable power companies, employing emission-reducing data analytics, and establishing eco-friendly collaborations with both suppliers and customers.

Implementing Sustainable Procurement Policies

When it comes to partnering with suppliers, the B2B sustainability group Matcha Initiative presents a methodology that can make a real difference in the global ecosystem.

In its article “How to Write a Sustainable Procurement Policy,” Matcha guides organizations through the sustainable procurement policy implementation process by asking them to evaluate their current procurement policy, identify areas of green improvement, redesign purchasing processes with a dual focus on sustainability and ROI, and continually monitoring the effects of this redesign through the evaluation of key performance indicators (KPIs).

Investing in Renewable Energy Sources and Green Technology

For several organizations, KPIs clearly demonstrate the tremendous benefits of sustainable supply chain policies and practices in terms of environmental impacts and investment potential. While they may have substantial upfront costs, investing in renewable energy sources and green technology often pays dividends in the end.

Role of Sustainable Supplier Relationship Management

A wise supply chain/logistics manager will integrate sustainability concerns into a larger supplier relationship management (SRM) program that encompasses a whole spectrum of environmental, social, and governance (ESG) matters. As industry insiders, government agencies, and general consumers alike are holding organizations to stricter ethical standards, ESG issues have become an unavoidable aspect of positive public relations and ultimate marketplace success.

Increasing Transparency in Supplier Relationships

In “Managing Risk Through Sustainable Supply Chains,” Deloitte states that full transparency with suppliers is crucial for green supply chain management and broader ESG (environmental, social, governance) efforts. It questions what actions to take if a supplier’s behavior risks these goals, such as endangering operating licenses through irresponsible environmental practices. Any supply chain participant must ethically address such issues.

The Impact of Ethical Labor Practices on Sustainability

As calls for transparency uncover various ecological problems, they tend to shine a light on unethical labor practices as well. In fact, problematic environmental and labor practices often go hand in hand. Fortunately, increased transparency is making a difference in supply chain/logistics employer oversight. The business news outlet The Future of Commerce reports that 57 percent of today’s supply chain organizations are actively monitoring the labor conditions of suppliers.

Sustainable Supply Chain Education and Collaboration

Whether you are communicating upstream to suppliers or downstream to consumers, education and collaboration are essential components of most sustainable supply chain initiatives.

Promoting Sustainability Education Within the Supply Chain Field

The journal “Sustainable Development Goals in Tertiary Education for Sustainability” highlights the importance of teaching sustainability throughout the supply chain in the article “Experiential Learning for Sustainability in Supply Chain Management Education.” The article goes beyond viewing supply chains merely as product and service delivery networks from raw material to consumer. It suggests educational strategies to promote sustainable development in communities and their wider environments.

The Importance of Collaboration for Sustainable Practices

Individuals and organizations dedicated to sustainable practices can benefit from collaboration in various ways. Collaboration is incredibly valuable in all fields and industries as a prerequisite for the effective sharing of ideas and resources. However, the pace of development in the worlds of green processes and technology makes collaboration even more valuable in the field of supply chain/logistics.

Measuring and Reporting Environmental Performance

As previously mentioned in our brief discussion of using KPIs to evaluate green practices, measuring and reporting performance is key to any worthy sustainable supply chain initiative.

The Role of Data and Analytics in Supply Chain Sustainability

Their ability to accurately and comprehensively track and evaluate a variety of operational factors in real time makes data analysis and digital analytics indispensable supply chain sustainability tools.

Establishing and Achieving Sustainability Goals

The real-time insights supplied by data analytics and other forms of measurement and reporting can be invaluable. This is especially true when setting a strategic sustainability plan and reaching final sustainability objectives.

Community Support and Waste Reduction in Supply Chain Sustainability

Sustainability issues and goals vary widely from organization to organization. Yet, community support and waste reduction have emerged as key issues in the industry and marketplace today.

Looking Ahead: The Future of Supply Chain Sustainability

New challenges and solutions regularly emerge in the world of supply chain sustainability. Therefore, it is vital to stay abreast of the latest developments and ongoing trends shaping green supply chain practices today. The global sustainability association Businesses for Social Responsibility identified artificial intelligence, machine learning, and digital automation as key technological forces that promise to further sustainability in supply chain/logistics throughout 2025 and beyond.

Other supply chain/logistics trends to watch include increasing consumer demand for faster delivery options and the growing numbers of expatriates living in places outside their countries of origin. Ironically, climate change itself presents some of the most prevalent obstacles preventing the expansion of sustainable supply chain practices. For example, the widespread adoption of sustainable packaging is often hindered by ecological forces that limit the availability of necessary raw materials.

What Are the Long-Term Prospects for Careers in Sustainable Supply Chain?

As they continue to drive management innovation throughout the supply chain/logistics field, green practices are likely to shape the career trajectories of many for the foreseeable future. For this reason, among others, the job forecast for supply chain logisticians is exceptionally bright. With an expected occupational expansion of 18 percent through 2032, according to the U.S. Bureau of Labor Statistics (BLS), the pace of employment growth for logisticians is roughly six times the national average. The BLS also presents a relatively positive outlook for the earning potential of supply chain logisticians, reporting a median annual salary of roughly $78,000 per year.

Pursue a Sustainable Supply Chain Career

A quality supply chain industry training program like the one at North American Trade Schools (NATS) will stress sustainable practices as part of its curriculum. Get details at the official NATS Supply Chain and Logistics Operations program page and fill out the online form for more information. 

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