Wednesday 25th Nov 2020 - Logistics & Supply Chain

Sustainability in supply chain management is not enough

How do you ensure that the efficiency gains promised in the design phase of an automation project are matched by real-world performace?

To be or not to be – sustainable, that is the question. To be sustainable or green, seems to be the new mantra in supply chain management. Nearly every conference and SCS magazine has the topic on the agenda.

The topic of sustainability is not new in a supply chain context. For some years Corporate Social Responsibility – CSR (child labour, code of conduct, etc.) has been a topic especially in sourcing, but the application of sustainability in an environmental perspective, carbon footprint and so on, is fairly new. Imagine how many companies in recent years, in their annual reports, have written something like “we have actively worked on reducing our carbon footprint, by offsetting our own emissions by procuring CO2-quotes”?

Even though the actual effect on the environment seems to be small, this signals a will to act on environmental issues. Also looking at articles in the popular SCM magazines, a number of new topics have evolved, all related to being green in some way: green-SCM,-sourcing, -manufacturing, -reduction of CO2. It seems like green can be attached to anything – green-X. On the one hand this is positive as it brings attention to the issue of the environmental effects of the operation of a supply chain, on the other hand, there’s a risk that being able to attach green to every initiative is going to make us all “green-blind” which might not give the effect needed for the environment. In the case of buying CO2-quotes, it is not really changing anything for the environment, but merely buying the company a good conscience.

I believe that the reason why many companies act as they do, is a lack of knowledge and competences of how to really attack the challenges of making a supply chain that is not only sustainable, but is really changing the environmental effects of operating a specific supply chain.

Many companies think of sustainability as recycling, and are applying new recycle programs to ensure that their products are collected and dismantled in an environmentally safe process. They also seek a high degree of reusability of the components inside the recycled products. In some companies, this is giving valuable feedback to product development on how to design the products for easier recycling, most often a structural view on the product.

Another approach seen at a number of companies is the mapping of their carbon footprint. In this area freight forwarding companies have been very active, for example in developing different models for calculating the carbon emissions, and suggesting ways to reduce this, by for example changing the mode of transport or the frequency of shipping. Both recycling and the carbon footprint are good initiatives and create a broader understanding of the environmental effect of a supply chain. But if we want our supply chains, not only to be sustainable, but really to have a significant changing effect on environmental challenges, we need to develop a new understanding and behaviour in the total supply chain.

Picture a supply chain as having a life cycle just as products. We then need to start to design our supply chains together with the design of new products, and we must “recycle” our supply chains just as we recycle products. The concept of integrated product development is not new, but the structured recycling of a supply chain, when products are phased out, is not seen very often. However, as we continuously look for new environmentally friendly materials for our products, that is, materials not harming the environment during production, use and recycling, the same should be the objective for the development of our supply chains.

We need to develop supply chains that can both deliver on traditional measures like superior value to the customer, and bottom line earnings to the companies in the supply chain and at the same time contribute positively to the environment. For example, imagine a supply chain producing more energy than it consumes, is that possible?

Why not attach solar cells to all moving entities, trucks, ships, etc. and collect the power to be used for the transport? We don’t really know how far we can go because the concept of a supply chain gets quite complicated when we want to look at the whole supply chain.

But as supply chain professionals we need to start using the power of the co-operation and relationships in our supply chains to develop solutions making our supply chains not only sustainable but really “changeable” on the environmental issues.

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