Can Supply Chains Balance Sustainability, Efficiency, and Delivery Experience?

  2020 08 27 Sustainability BL

Environmental sustainability has been a growing concern for individuals, businesses, and societies for years. As it becomes a key consideration in buying decisions, companies are taking a closer look at their operations and supply chains to find ways to reduce their carbon footprint. 

Leading companies, such as Amazon, IKEA, and Starbucks have all committed to reducing waste and carbon. All are working toward ambitious goals for 2030. On Amazon’s path to net zero carbon shipments, they’re focused on making 50% of all shipments net zero in this time. IKEA is planning to only use renewable and recycled materials. And Starbucks is aiming to reduce carbon, water, and waste by 50%. 

As organizations begin to make positive progress toward environmental sustainability, many are evaluating their supply chains. From sourcing goods through transporting products to manufacturers, distributors, stores, or end customers, the supply chain requires close attention. 

Customers are Paying Attention to Sustainability when Making Purchases 

A recent project44 report, Is 2020 the End of the Delivery Economy?, found that 78% of customers are more likely to make purchases from companies that prioritize sustainability in the delivery process. 

While it’s no surprise that the environment has becoming a growing issue to consumers and business buyers alike, we also wanted to see if the current economy and potential financial challenges would cause customers to put a pause on their environmental commitment. 

What we found is that in an economic downturn, customers’ commitment to sustainability remains steadfast, with 60% saying they would pay more to shop from a company that practiced sustainable shipping practices. 

  Sustainable Delivery

As organizations get through the disruption that 2020 has caused, sustainability remains a top priority. In a recent Bain & Company brief, Covid-19 Gives Sustainability a Dress Rehearsal, Jenny Davis-Peccoud and Jean-Charles van den Branden explain, If the past is any indication, sustainability will remain a top priority even as companies focus on survival. During the global recession of 2008–09, many predicted that companies would deprioritize sustainability as a nonessential component of their business. That didn’t turn out to be the case.” 

As companies begin to build more agile supply chains for the future, sustainability may be a substantial part of the strategy. 

A Supply Chain Balance of Sustainability, Efficiency, and the Delivery Experience 

While some companies are on their way to major sustainability milestones, many are still figuring out how to juggle the increasing delivery demands with sustainability and efficiency. According to our survey, 69% of supply chain professionals say it’s challenging to maintain or improve operational efficiency while also implementing sustainable practices. 

Even though it’s hard to find a long-terms solution, supply chains know sustainability needs to be addressed with half (51%) citing pressure from customers or competitors as the motivation for implementing a sustainability plan. 

Currently, 54% of supply chains have a sustainability plan. As customer pressure continues to grow, this number will likely increase as well. The challenge will be for supply chains to figure out how to meet all their customer demands — including fast and sustainable delivery — while also maintaining efficiency and agility. 

Measuring Supply Chain Environmental Impact 

While there are many ways supply chains will implement more climate positive initiatives — from sourcing and manufacturing through transportation and delivery — progress cannot be made without measurement. 

project44’s survey found that 36% of supply chains have just started to measure their sustainability or climate impact, and an additional 27% are not measuring their impact at all. 

To help supply chains measure their environmental impact, project44 has released a CO2 emission estimate to truckload shipments in the Visibility Operations Center™ (VOC). Shippers can now use this metric to see how their shipments impact their organization’s carbon footprint, allowing them to better understand their practices and dig into issues. 

  VOC Emissions

Real-time transportation visibility allows supply chains to gain more insight, and ultimately more control, over their operations. Visibility and analytics tools deliver reliable data, enabling global organizations to reduce dwell times and idling, improve inventory management, and gain more visibility into upstream activities for better traceability. 

By the end of 2020, project44’s transportation visibility products will help reduce over 10M metric tons of CO2 emissions, equivalent to removing about 1.8M passenger cars from the road. 

To learn more about the demands of the Delivery Economy, read our latest report.