The introduction of supply chain management strategy during the last four decades, together with technological advancements, has fundamentally changed the way of managing businesses.
However, consumers are now focused on businesses that emit less carbon and harm the environment, and businesses are shedding focus on achieving sustainability in their supply chain operations.
This guide shares a few green and sustainable initiatives for supply chain management in organizations.
What are some of the green and sustainable supply chain initiatives?
Companies can adopt numerous sustainable and green initiatives today to achieve greener operations and promote a sustainable future. Some of these are listed below.
Reducing air freight
Shipping products by air offers faster transportation but is far from energy efficiency. Therefore, it is good to rely on ocean freight and real transport. Together they can meet consumer demands while minimizing environmental impact.
Use of 3D printing
3D printing is comparatively more energy-efficient and cost-efficient than any other equipment or processes used in manufacturing units. They are precise with no material waste generation, create products on demand and reduce overproduction, lowers carbon emissions, and recycle materials into new products.
Implementing circular supply chains
The implementation of circular supply chains aims to recover and recycle waste materials into saleable and durable products. For example, Apple reprocesses its old iPhone components to make brand-new products. Adopting the circular economy model allows organizations to reduce waste and keep valuable materials from dumping into landfills.
Introduction of carbon trading systems
Carbon trading is a new approach where nations can exchange carbon credits to minimize CO2 emissions. Each country has a limit on CO2 generation. Nations emitting higher than the limit can buy carbon credit from countries with lower emissions, giving them the right to release more CO2 into the atmosphere. This system aims to put a price tag on the right to carbon emissions and give nations and organizations a financial incentive to reduce their emissions. Thus, preventing environmental degradation and health issues.
Use of the Internet of Things
IoT in supply chain management software helps manufacturers to track real-time energy usage and monitor equipment and inventory levels. Thus helping organizations gain greater awareness of overstocking, energy waste, resource wastage, and other mismanagement.
Supply chain digitization
Using improved digital tools like smart warehouse management software increases supply chain efficiency and helps organizations automate processes from stock reordering to optimizing warehouse picking approaches. It helps avoid rush orders requiring faster shipping solutions like air freight and reduces overordering. Furthermore, it minimizes waste and energy usage.
Introduction of Artificial Intelligence
Artificial intelligence in the supply chain helps automate processes, boosting efficiency and preventing human error. It is used at every step of SCM software, including streamlining the manufacturing process, using valuable data insights, forecasting product demands, analyzing delivery routes, and more. AI allows people to work faster and more accurately, reducing wasted effort and resources.
Application of Robotics
Robots can streamline operations more efficiently throughout the supply chain process, particularly in logistics. For example, a drone can make small deliveries more efficiently than a large truck. Similarly, a self-driving truck can automate traffic decisions and optimize the best delivery route to reduce fuel wastage.
Materials engineering approach
Recently, advancements in materials engineering have made manufacturing and product packaging more greener and more efficient. For instance, manufacturers can easily turn recycled materials into durable products with new processes. Such materials may be lightweight but strong. Additionally, life cycle planning tools help manufacturers optimize products for future applications beyond their initial usage.
Is sustainable supply chain management similar to green supply chain management?
Despite having many similarities, sustainable supply chain management and green supply chain management are distinct disciplines. While a sustainable supply chain concentrates on minimizing the impact across many facets of life to ensure the industry can continue to function into the future, green supply chain practices aim to improve environmental health.
Sustainability naturally takes environmental concerns into account. However, organizations must also focus on different aspects of social responsibility, like fair trade, moral employment standards, and industry’s impact on neighboring communities. They may also take into account economic concerns like ensuring sustainable growth.
In today’s fast-paced business environment, being green and sustainable is not an option but a necessity that gives companies a competitive edge to improve their bottom line and increase their consumer base. Companies using supply chain software and green practices often see a decrease in costs and increasing efficiency.