‘To sustain, embrace sustainability’: Incorporating sustainable practices across the supply chain

Green logistics

The United Nations named the 2020s as the Decade of Action, which calls for “accelerating sustainable solutions to all the world’s biggest challenges – ranging from poverty and gender to climate change, inequality and closing the financial gap” by 2030.

In which, directionally, environmental impact is central to the script and critical on the world map.

The impact on the environment has driven many organisations to introspect and adopt sustainable practices for a greener future over the last few years. The pandemic further accelerated the adoption of sustainability measures towards a greener world. In fact, consumers are more conscientious than ever about their preferences for products created in a sustainable fashion. There are expectations from organizations to follow a set of ethical standards. Sustainability has become a key component for companies’ future plans and business strategies.

Companies are actively looking at making significant changes that ensure environmental stewardship and sustainable supply chain management. Many research reports are indicative of the fact that for most companies, the supply chain is responsible for the majority of their environmental impact. Fundamentally, supply chains involve energy-intensive production and transportation as goods are manufactured and moved around the globe. Therefore, organizations are consciously making changes in their supply chain management strategy to minimize the impact.

Many logistics industry players have begun to appreciate the fact that green logistics are compatible with their main business agenda. The influx of international manufacturing and e-commerce players has given a boost to the Indian green Logistics and supply chain, owing to the encouraging business opportunities for those adopting sustainable practices.

According to Sustainability trends defined by Gartner, 84% of supply chain leaders plan to invest in climate adaptation and mitigation measures in the next 18 months. As green logistics take prominence, it is important to incorporate sustainable practices across the various facets of supply chain management. 

Sourcing Raw Material

It is important to source material that has a lesser negative environmental impact. On the other hand, organisations also compensate for the impact with green initiatives like equal or more plantations, educating the growers on the ground, working on alternatives with a willingness to pay a premium, collaborative projects with vendors for effective & efficient sourcing, knowledge-sharing platforms to improvise the efficiencies & bring in synergy between vendor capability & customer expectations.

Cleaner Manufacturing

Initiatives like lesser wastages during processing, reducing energy and water consumption help in progressing towards a cleaner future. In fact, wastages are segregated, recycled and also used as feed in energy generation. A cleaner and more sustainable way of manufacturing also enhance employee, community, and product safety in the longer run.

Future of Logistics

From unmanned material handlers to drones for online fulfilment, the current setup is undergoing a major transformation. With the possibilities in IoT & AI, the future supply chain holds the promise of being completely self-driven. Electro-mobility will largely contribute to reducing the environmental carbon footprint in the transport industry as well as helping freight forwarders guide customers in making smart and sustainable decisions for their supply chains. Operational initiatives using IoT like optimum route mapping, shipment consolidation, meticulously reviewing vehicle size and load optimization allow for more sustainable logistical operations.

In fact, when companies strive to achieve a sustainable supply chain, they focus on all operations (i.e. procurement, warehousing, manufacturing, and delivery) to reduce a company’s costs, minimize its impact on the environment, and address the impact it has on society. Organizations are collaborating meaningfully to design products that make the circular economy go round.

Sustainability within a supply chain involves investigating not just environmental concerns, but also social, economic, and legal responsibilities as well.

Organisations are also adapting systematic handling and also reverse logistics of the harmful chemical and hazardous waste to adopt green practices. Environmental consciousness is now at the nerve centre of most organisations and their operations. It is embedded as a key commitment.

The supply chain industry is also aggressively adopting the latest tech trends.

Increased use of Internet of Things (IoT) to monitor the performance of personnel, machine & material, extensive use of Artificial Intelligence (AI) in manufacturing, warehousing, delivery & customer service, Automated Guided Vehicles (AGV) to AI-driven robotics with data analytics – all these hardcore tech adoption will be at the core of sustainable growth of Indian logistics and manufacturing sector

In conclusion, we can say that It is evident that companies that practice sustainability are more likely to enjoy financial and environmental benefits. However, at the same time, it is also imperative that these are strategically planned and be given top management support for necessary actions to take place. As the industry continues to evolve, companies can implement necessary changes to increase the positive effects of business activities on the environment. This will also help firms in achieving consumer loyalty in the long run and allows endorsement for the socially and environmentally responsible millennial population.

Simplistically, when rubber meets the road and ‘When you put the whole picture together. Recycling is the right thing to do!’ – Pamela Shoemaker

This article has been authored by Raghav Vaghela, Operations Head, IPM India Wholesale Trading Private Limited (country affiliate of Philip Morris International Inc.)

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