Supporting sustainability in supply chains
Supply chains can be immensely complex, which creates challenges for sustainability, but the rewards are worth it says speakers at the Supply Chain USA Virtual 2020 Summit
“So many times, I hear people questioning or being concerned about what is the cost of being sustainable,” said President of CHEP North America Laura Nador, which for her is “a silly question”.
“We actually believe that sustainability can make financial sense long term. It does not have to be profit versus planning. It's not a war; it can be both. So, if you just look at one simple example … there're 50 billion [of] empty miles every year in the US alone - that means we have a $90 billion saving opportunity. If we in the industry really make a concerted effort and collaborate to eliminate them, then it's a lot of money.”
We're talking about trade-offs, [but] there's real money behind them
That is why they are trying to help their “customers by collaborating on transport, because where we are in the supply chain, we're in the middle of everything, [due to] the density and the size that we have and the fact that our products normally go the opposite direction to CPG products and finished products. So, we can find many opportunities to drive synergies and reduce CO2 footprint by increasing collaborative transport.” This represents a “real saving opportunity. We're talking about trade-offs, [but] there's real money behind them.”
Optimising a network
However, achieving “that circular model on a national scale requires a very sophisticated reverse logistics engine” explained Nador. “We as an organisation have to focus a lot on network optimisation to ensure that we move those assets the minimum number of miles possible to minimise that footprint on the environment.”
Jason Reiman, SVP, CSCO, The Hershey Company, also emphasised the complexity of modern supply chains and the challenges that represents for sustainability. “From my standpoint, I always tell people, take a step back and just think about and picture - what it takes to make a simple chocolate bar - and think about the millions of farmers around the world who are shipping to tens of thousands of suppliers, all the different materials to convert at one of our plants somewhere around the world, to then ship to eventually millions of consumers. And this has to happen in repetition every day.… That's the complexity of what we're orchestrating and having that right visibility to it is critical, and making sure that you understand all those different impacts.”
Avoiding garbage in, garbage out
Gert Sylvest, Co-Founder of digital supply chain services provider and facilitator Tradeshift, and GM of Tradeshift Frontiers, was also quick to point out that measurement and monitoring of sustainable goals is a vital step that must be addressed now. In a lot of organisations looking at sustainability, they see a focus on a few high-volume suppliers, within just “A few categories. Reports that come in can be on a half-year or a yearly basis. The most common form is huge PDF reports or Excel sheets and that just doesn't give you the visibility to drive any real change.”
If you don't get the data driven insight, everything after that process is slowly going to erode
He believes this is a source of a lot of issues “because … it's really garbage in, garbage out. If you don't get the data driven insight, everything after that process is slowly going to erode.”
This kind of data drives performance metrics are critical as we need to “listen to science, and then we make decisions based on relevant factual information,” said Reiman. We then feed that to boards, who can “establish their criteria for holding the management accountable in the organisation.”
“Let's get the benchmarking, let's get that consistency and reporting on what sustainability means for those organisations,” he implored, but also then disseminate those findings and “see this as a journey, as opposed to a destination for your sustainability objectives.”
This is part of our reporting from the Summit. To be notified when we release the complete post-Summit report,sign up to our newsletter here!