5 Ways Companies Can Go Green by Rethinking the Supply Chain

Commenting on sustainability in his 1990 book “The Fifth Discipline,” author Peter Senge argues that organizations that want to make progress on environmental issues must understand that they’re part of a larger system.

Senge’s words resonate many years later due to their simplicity. Green initiatives are nothing new for enterprises, and they have only grown more popular in recent times. Sustainability can yield significant benefits for organizations, such as building corporate goodwill, cutting down on operating costs, and aiding efforts to recruit top-flight talent.

These benefits only come to fruition, however, when leadership sees green approaches as companywide endeavors instead of siloed ventures. Supply chains are the foundation of most enterprises, nurturing relationships and influencing productivity and efficiency. With the role supply chains play in facilitating and driving success, business leaders should look to them as a logical entry point for their green transformations.

The Challenges of Supply Chain Sustainability

While the idea of an environmentally friendly supply chain might seem wonderful, there are several concerns with this shift to green business. Chief among those worries is packaging, whether it is cardboard and plastic for outer packaging or paper wrapping, labels, foam, cardboard, and plastics for product protection. Given the Environmental Protection Agency projected that containers and packaging account for about 30% of U.S. waste, there is a pressing need for improvement.

A notable example of this waste is expanded polystyrene, or EPS, which does not biodegrade and gluts our landfills. Various industries still widely use EPS to protect food and secure electronics in boxes. The market for recycling EPS is growing but still not widespread, which means it will be a 21st-century challenge to find a way to reduce or recycle the material.

Such challenges are only exacerbated by the emergence of same-day shipping and the continued expansion of e-commerce. In the rush to deliver merchandise, retailers increase packaging and fracture the customer experience by delivering orders in multiple shipments. The consolidation of items into single parcels is a greener approach that not only delivers a shipment at once rather than piecemeal, but is also pleases consumers who demand responsible packaging.

A growing number of organizations are working to tackle these challenges, driving innovation in many aspects of the supply chain. Leaders who are interested just need to find the optimal way to fit green strategies into their supply chains.

Create a Greener Supply Chain

Despite the inherent challenges of sustainable supply chains, there are plenty of great ways to inject green principles into your operation. Here’s where to start:

1. Commit to formalizing green goals. Green initiatives cannot just be something you superficially commit to. You must make green initiatives part of the organization’s overall strategy, allocating time and money for it.
   Empower the employees who have the vision to help you redesign your products and processes in a greener way, giving them a safe space where failure is not punished. Create cross-functional teams with members from delivery and packaging who can contribute new solutions and capitalize on successes.
   When leaders fully commit to green supply chains and a multiyear strategy, sustainability becomes a key part of company culture. The more embedded green mindsets are into a company’s culture, the more progress green operations will achieve.

2. Build a network of collaborative partners. Organizations are just one cog in a global machine, and the supply chain system is just as interconnected and complex. To be effective, collaborate with others who can share some of the burdens of managing this complexity.
   Identify network partners that demonstrate strategic thinking and offer tangible contributions. Start by looking at the internal barriers your company faces that keep it from executing its sustainability goals, and then identify partners who can help you fill those gaps. You might also consider areas where these partners struggle to achieve their goals and make sure you have complementary skills that will benefit them.
   Pinpoint the problems that you need to solve and then identify the upstream or downstream solutions to those problems. Answers could including reducing the quantity of overall packaging, shifting to a more sustainable type of packaging, combining orders, or using technology to leverage the most effective network design for deliveries. Approach these goals with network partners, formalizing objectives and measuring outcomes collaboratively. Once you’re done, publish the results and share your insights to ensure no one misses out on similar opportunities for improvement.

3. Adopt appropriate technology. Technology must be central to green initiatives because it can optimize every link of the supply chain and every part of a warehouse toward sustainability. For example, consider how software can make the process of customized packaging less wasteful and expensive, minimizing the costs of both fuel and storage. In addition, the right supply chain simulation solution can accurately and quickly calculate details such as quantities per box, boxes per pallet, and pallets per truck.
   Manufacturing technology is just as important. For instance, consumer goods producer Henkel partnered with Mondi to craft a way to turn scrap plastic into flexible laminate material for its packaging. This breakthrough depended on an advanced resin reclamation technology developed at Mondi. In examining your business operations, take time to investigate what technology is available to your industry that could enhance both the implementation and celebration of environmentally beneficial outcomes.

4. Rethink your order management strategy. Look for solutions in the market that can help identify the best sources and routes for package delivery. For example, UPS did this when it did away with left turns. Not only can this have green implications, but it also is likely to improve customer experiences.

5. Publicly celebrate your successes. When planning and implementation finally pay off, publicize that victory with upstream partners and downstream clients. Showcase green product logos on your packaging and online presence to advertise that sustainability is a core supply chain value. Many consumers value corporate social responsibility and environmental stewardship. Use the momentum to continue building community goodwill and better brand awareness.

Community eco-goodwill and pride in environmental stewardship are just some of the benefits of a green approach to the supply chain. Thankfully, that green attitude doesn’t have to be a solo effort. By partnering with others, business leaders can adopt strategies that modernize and enhance supply chain operations while creating a winning result for everyone involved.

Written by Jeromie Atkinson.

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