Ensuring Supply Chain Sustainability in a Post-Pandemic World
By Tara Milburn, CEO of Ethical Swag
The corporate world is a competitive sphere. Going head-to-head with industry peers, companies search for small victories: a better product, a drop in price, a faster service, a reduced delivery time. These are the measured improvements and competitive advantages that create consumer reward.
But since the boom in e-commerce that has characterized the pandemic era, the name of the game has changed. Today, 84% of consumers will spend more on a product or service purchased from a sustainable brand. Further, a staggering 61% of consumers would rather wait longer for the delivery of their product than pay the environmental cost of overnight shipping and same-day delivery.
A divide has taken place, and companies that are still rushing to lower product expense or speed up deliveries at the cost of the planet and its people are playing an outdated game. In this new normal, the winner is the one who manages its ecological impact.
The Sustainability Quarterback
For many post-pandemic companies, the supply chain leader has become the quarterback, calling the environmental plays. A study by Coyote Logistics surveyed companies of all sizes, stages, and geographical locations, asking who within the organization was in charge of sustainability efforts. For American companies, the supply chain manager was the most popular response, with 34% of companies responding that the bulk of their sustainability initiatives rested on that professional’s shoulders. Further down the list, 17% cited a specific sustainability manager role, and 12% said the task fell to a general manager. Among European respondents, a similar 39% of companies pointed to the supply chain manager as the sustainability playmaker — again, the top answer.
The quarterback role of the supply chain leader makes sense, considering the impact of the supply chain on a company’s overall footprint. The environmentally intensive costs of most procurement, transportation, packaging and waste management strategies add up quickly, and constitute a large part of a company’s ecological footprint. One good solution at the supply chain level can completely alter a company’s energy profile, and can go a long way toward achieving sustainability benchmarks. Not surprisingly, supply chain leaders haven’t wasted any time in getting started.
Supply chain leaders are at the start of the process, applying green solutions to procurement strategies. As it stands, 70% of companies have supply chain requests for proposals (RFPs) that include a sustainability agreement. Those initial terms, developed due to consumer demand, help ensure that the company’s partners and suppliers have undergone their own environmental audits and ecological improvements, removing some of the cost incurred at the procurement stage. An additional 24% of companies have indicated a plan to start including sustainable initiatives in RFPs in the near future.
Coyote’s report found other popular areas of focus. Supply chain leaders mentioned alternative fuels and fuel optimization, new technology for efficient processes, and increased recycling combined with reduced packaging for a diminished use of landfills. Interestingly, the use of alternative fuels and the improvement of inventory forecasting were two of the most commonly cited areas where supply chain leaders have experienced a return on investment. Others included partnering with green carriers, using electric or self-driving trucks, and employing new programs to optimize routing.
Getting Ahead of the Game
Every great team keeps a few goals top of mind. Currently, supply chain leaders are studying their cost savings, impact reputation and customer feedback, to assess the effectiveness of the sustainability strategies they’re putting in place. Seventy-one percent of survey respondents reported a clear awareness of specific sustainability goals at the supply chain level.
The best quarterbacks know they can’t win the game alone. Roughly 20% of companies in the Coyote report have already hired outside consultants to help guide their teams to better operations. For smaller companies without consultancy budgets, organizations like B Labs offer no-cost assessment tools that can be a good place for companies to start to get an in-depth sense of their current energy use. With the audit results, supply chain leaders can prioritize their areas of focus and address the energy leaks that are costing their companies the most.
Beautiful things come from strong corporate competition, but the consumer always has the final say. The power of the consumer to require more environmental practices in the supply chain can’t be overstated. Even though they’re one step removed, consumers who reward companies who require suppliers to change are slowly shifting the industry. With more purchasing power, those companies are able to demonstrate the business case for supplier reformation from a customer-focused approach.
With each post-pandemic purchase decision, consumers are rewarding awareness, responsibility, and green-orientation over delivery speed, cost, and product offerings. The name of the post-COVID game has changed for the better, to pursue a more sustainable normal. It’s a much-needed re-orientation that will, in the end, be everyone’s win.
Originally published on Supply Chain Brain
Author: Tara Milburn
Disclaimer: This article is being reproduced in its entirety on our website because we have being interviewed, quoted, or mentioned. Ethical Swag is not the author or proprietor of this content.