UPS Longitudes | The Future of Supply Chain Sustainability

Mike Sinkovitz @ Coyote Logistics
Nov 11, 2020 11:00 AM ET
Article

Sustainability is not just a buzzword that companies use to sound “green” — it is fast becoming a core strategic focus.

According to Coyote’s new original research study, Sustainable Supply Chain Management: Driving a Smarter, More Sustainable Future, 81 percent of global shippers are more focused on sustainability today than they were three years ago. As the effects of climate change continue to cause widespread supply chain disruptions, that trend isn’t going to reverse.

Notably, our study found that this trend toward sustainability within the supply chain is dominant among companies of all sizes, and the same is true across different verticals. This common commitment reinforces that, regardless of your company size or industry, sustainability should be a key focus area.

Whether you are just starting to build your sustainability program or have an entire department dedicated to such initiatives, it’s important to know where the industry is today so you can take your next step.

Insights like these — from 250 supply chain decision makers across the globe — can point you in the right direction.

Your customers are demanding change

Setting aside the obvious environmental and humanitarian motivations, your customers are demanding ramped-up efforts — 84 percent of consumers factor a company’s sustainability practices into their purchasing decisions.

Believe it or not, in the age of e-commerce and the continual rise of delivery speed, a majority of consumers (61 percent) stated they would actually wait for longer delivery times if they had a clear understanding of the environmental impact of their shipping options.

Though the demand for faster deliveries hasn’t slowed down, customers are looking to companies to take a leadership role nonetheless. If you do not adopt sustainability into your supply chain plan, consumer perception alone might dictate whether your business is able to compete in the future.

Out of all the functions in a business, supply chain plays the most prominent role in sustainability efforts. More often than any other position, respondents stated that a supply chain professional was most likely to “own” sustainability at their business.

Whether you work in supply chain or another function within your company, you have the ability to make major contributions to your company’s green initiatives.

 

Four steps to get started with supply chain sustainability

Though 98 percent of global shippers have at least one team member dedicated to green initiatives, only one-quarter have “sustainability” as a firm requirement in their RFPs. The trend is clear, but we haven’t yet reached an industry-wide consensus on exactly how to go about implementing it.

If you are at the beginning of your supply chain sustainability journey, here are a few steps you can take to get started.

      1. Establish an owner

It doesn’t matter who is in charge of sustainability or which department they work in, but there needs to be a leader responsible for implementing and monitoring initiatives. Since these efforts will touch on several aspects of your business, a cross-functional team will likely be beneficial as well.

      2. Start the conversation

Once you have a leader (and potentially a team) in place, it’s time to start involving every part of the business. This should be a collaborative process — get their feedback on what’s important. Ask questions to find areas you can improve.

      3. Look for small wins

Often times, shippers look at their own operations first. Where can you cut carbon (and maybe even cost) within your four walls? Begin with achievable, short-term goals and prioritize based on the highest return on your investment.

The top short-term objective from respondents in our study was implementing alternative fuels and optimizing fuel consumption in their own fleet. Partnering with “greener” carriers and using more digital solutions throughout your supply chain are other great ways to add network efficiency and reduce your carbon footprint.

      4. Set clear goals

Though 98 percent of companies have some sort of supply chain initiative, only 71 percent have measurable goals.

Once you find areas to invest your time and resources, make sure you know what success looks like, how you’re going to measure it and when you are going to check in on your progress. This will help you make more informed decisions as you expand your efforts.

For a deeper dive into actionable next steps when starting your supply chain substantiality program, you can read the full post on the Coyote Resource Center.

 

Three steps to advancing your supply chain sustainability program

If you already have a solid foundation, there is always room for improvement — even some of the most advanced companies are far from carbon neutral. Take these three steps:

      1. Look outside your business

If you feel like you’ve done all the obvious, start looking at what other similar businesses are doing. This is one area where imitation is not only acceptable but often encouraged. Find ways to collaborate across your industry. Many companies — about 20 percent of respondents — are consulting with outside experts too.

      2. Map out long-term initiatives

Once you have started picking the low-hanging fruit, you can look at the problem from a more holistic, long-view perspective. Measure success in years, not months. Be ambitious — if we don’t try, we’ll never get there, and goal setting is where we have to start.

      3. Look to your partners

As previously mentioned, only one-quarter of global shippers have sustainability information as a requirement in their RFP process. Your providers and carriers can have a substantial impact on your overall sustainability initiatives. By making this an industry standard in the RFP process, it will help accelerate the change we need.

For a deeper dive into actionable next steps to advance your substantiality program, you can read the full post on the Coyote Resource Center.

Supply chain sustainability is here to stay

Though many companies have just started implementing sustainability initiatives — like reducing empty miles or shifting freight to intermodal — one thing is clear: sustainable supply chain management is not a fad.

You must focus on improvements across your entire network, including both internal initiatives (alternative fuels and digital adoption) and external initiatives (partnering with the right carriers).

Not only is supply chain sustainability the right thing to do for our planet and all global citizens, your consumers are also demanding it. Our research study is a great way to do some initial benchmarking and see where other shippers are finding the most return on investment.

You can download the study here, or access it — and all Coyote sustainability content — on the Coyote Resource Center.