Supply Chain Sustainability Made (Not So) Easy

By Kirk White, Product Manager, Supply Chain Solutions Group, Yusen Logistics (Americas) Inc.

"The times, they are a' changin'," lyrics sung many years ago by the great Bob Dylan seem to have moments in history where they return with a deeper meaning. It's hard not to see their relevance now with regards to the environment and commerce.  Environmental stewardship and sustainable business practices are quickly moving from a few niche projects to become more and more significant to our global community.

Consumers are making their priorities known: opting for a single day of the week combined deliveries instead of same/next day shipping to save boxes and minimize transportation impact, eschewing cheaper "disposable" fashion and inexpensive products designed to wear out and be replaced, and using social media communicate a desire to patronize brands that have a robust system in place.

A quick glance at the commercials on television today will show a definitive effort by major companies to share their sustainability initiatives with their customers.  A well-known jeans company now has a new ad program that encourages customers to buy ONE pair of high-quality jeans designed to last a long time rather than purchase multiple pairs of jeans over several years.  To say this is a bold strategy is a bit of an understatement. In addition, local, state, and national governments are ushering in newer and more comprehensive emissions standards and environmental regulations.

The times they are a' changin' indeed.

And many businesses are committing to a' changin' as well and running into a few challenges along the way.  After all, it's quite easy to proclaim your commitment to a more sustainable and responsible supply chain. However, it is less easy to implement one with multiple components and myriad service providers to keep track of while being transparent with their goals and results. 

A 2020 article by the Harvard Business Review illuminates the point quite well. The issue with larger companies implementing sustainability measures is that it's not difficult to have their main "first tier" suppliers agree to an Environmental Management Policy (EMP). However, these suppliers often use a team of second, third, and fourth-tier providers down the line that may be more challenging to hold to these standards depending on the complexity of the supply chain.  Major American tech and apparel companies were quite publicly embarrassed when violations from such suppliers came to light. 

It's easy for other companies to see such stories and instinctively shy away from such initiatives. After all, why go to all the extra trouble if, in the end, it's not a guarantee that all your supply chain components will comply.

It is, however, possible for any company to implement more sustainable practices and increase brand awareness in this field; possible, but not necessarily easy.

TIPS FOR INCREASING SUPPLY CHAIN SUSTAINABILITY PRACTICES

1. First things first. Decide if you want to be SUSTAINABLE or RESPONSIBLE.Yes, there is a difference. A Responsible Supply Chain commitment means that you will follow all applicable laws and regulations as well as ethical standards, although you may not necessarily go the extra mile to avoid going the extra mile…so to speak.A Responsible Supply Chain will follow the rules but may not commit to carbon neutrality, for instance. This is perfectly acceptable.A Sustainable Supply Chain requires a deeper understanding and commitment.Some organizations may not be ready or interested in this level.
2. Get On Board.Make sure that you have to buy-in from all necessary parties.There may be costs associated with such a new initiative, and you don't want to find out it's a no-go because you didn't get the proper authorization. This also, however, includes making sure you get buy-in from all aspects of your supply chain.Make sure to include all your service providers with the initiatives…and on that note…
3. Know Thyself.If you have decided to delve deeper into sustainable waters, it's important to fully understand your supply chain. Mike Hachtman, in the excellent "Six Ways to Achieve Supply Chain Sustainability", talks about how "Shockingly few companies actually have detailed views of their entire supply chains, which are more complex and global than ever." This is a critical step for you to take.Get a full, detailed map of your entire supply chain, cradle to grave. This is going to allow you to see potential gaps.
4. Choose Wisely. Not everyone can do everything. When a company certifies to ISO 14001 (an international standard for environmental stewardship), they are first tasked to come up with "Significant Environmental Aspects", on which to focus.These could be emissions, waste disposal, electricity usage, environmental hazards and chemical storage/transportation, spill cleanups, and air and water effects. Have a hard, honest look at your supply chain and business practices and pick the things that a) you think will have the most impact and b) you can accomplish. Again, some multi-national car manufacturers have the executive buy-in and global clout to commit to zero emissions in less than 20 years.Not every organization can do this.
5. Go Forth.Create a team, set some goals, and initiate.Make sure that you communicate your goals and progress with your organization and your customers.As you achieve your goals, use that momentum to pursue more ambitious initiatives.Lather, rinse, repeat.

Obviously, this is a complex subject and is not going to be easily addressed in one article. However, the most important takeaway is that it is possible to develop sustainable initiatives for your organization. Given today's clients, it has the potential to be profitable.

At Yusen, Logistics, we work closely with our customers and carrier partners to promote and provide sustainable shipping solutions whenever possible. Leveraging our Control Tower & IT Logistics Solutions, we can provide our customers forecasting data to plan sustainable transports better. Please let us know in the comments if you'd like more information, tips, tricks on sustainability measures, and we can expand.

Sources used for this article:

Sustainable Supply Chain Foundation: General information
http://www.sustainable-scf.org/

Harvard Business Review: A More Sustainable Supply Chain by Verónica H. Villena and Dennis A. Gioia
https://hbr.org/2020/03/a-more-sustainable-supply-chain

McKinsey Sustainability:  Starting at the source: Sustainability in supply chains  By Anne-Titia Bové and Steven Swartz https://www.mckinsey.com/business-functions/sustainability/our-insights/starting-at-the-source-sustainability-in-supply-chains

Supply Chain Digital:  Six ways to achieve supply chain sustainability by  Mike Hachtman

https://supplychaindigital.com/supply-chain-2/six-ways-achieve-supply-chain-sustainability