With climate change accelerating and public pressure mounting, companies must take bold steps to reduce the environmental impact of their supply chains. As consumers grow increasingly concerned about sustainability and vote with their wallets for eco-friendly brands, even small and medium enterprises are working to “green” their operations. However, a typical company’s supply chain accounts for over 80% of its total greenhouse gas emissions — meaning significant work remains to curb air pollution.
This article will explore proven tactics businesses can use to advance their sustainability journeys.
Key benefits of green logistics
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Transitioning to sustainable logistics and supply chain management delivers tangible benefits beyond reducing environmental impact.
- Financial savings through efficient operations
Sustainability initiatives often generate cost savings that boost profitability. Steps like optimizing transport routes and packaging size minimize fuel and materials waste. Investing in energy-efficient facilities pays off through lower utility bills. Circular business models create value from waste. Standardized emissions reporting uncovers further savings potential.
- Lower risk through increased visibility & agility
Tracing supply chain sustainability down to raw materials provides visibility to anticipate disruption risks. This transparency, alongside technologies like AI-powered planning, fosters agility in adapting to meet environmental and social compliance regulations.
- Customer loyalty & competitive reputation
With sustainability driving purchase decisions, a proven eco-friendly supply chain attracts today’s purpose-driven consumers. Environmental and social responsibility builds brand loyalty among customers prioritizing ethics and values.
Now, let’s focus on some specific ways modern businesses achieve sustainable logistics and supply chain management.
Introducing circular economy logistics
Transitioning to a circular economy depends on reconfiguring logistics to support closed-loop material flows.
- Reverse logistics
Reverse logistics refers to processes of collecting used, damaged, or unwanted products from customers or retailers and transporting them backwards along supply chains. This enables the recovery of products and components for repair, refurbishment, or recycling into new materials, closing resource loops. For instance, apparel company H&M has implemented global reverse logistics systems to receive pre-worn garments for sorting and processing by specialist partners.
- Refurbishment networks
Dedicated refurbishment facilities and transportation links allow assets like consumer electronics to be restored, extending useful lifetimes.
- Asset-sharing platforms
Shared access models like product-as-a-service shift incentives from one-time transactions to continual asset utilization. Instead of single owners, products and services are provisioned within pooled systems targeted at many users, like car sharing.
Sustainable sourcing and procurement
As companies seek to reduce their environmental footprints, setting clear sustainability expectations for suppliers is a fundamental first step. This greatly contributes to sustainable logistics and supply chain management.
- Responsible sourcing policies
Formal responsible sourcing policies codify environmental and social standards that suppliers must meet. These policies typically prohibit unauthorized deforestation, harmful emissions, and unethical labor practices. They also outline sustainability criteria for raw materials and production methods. A recent regulation influencing sustainable procurement is the Single-Use Plastics (SUP) Directive, designed to mitigate the effects of plastic products and encourage a shift towards a circular economy.
- Ongoing assessments
Beyond initial screening, regular sustainability assessments provide visibility into supplier practices. Self-assessment questionnaires allow suppliers to report on key metrics like energy usage, waste generation, and compliance with labor regulations. More rigorous third-party audits may also be conducted periodically to verify sustainability performance.
- Partnering with suppliers
Rather than simply policing suppliers, forward-thinking companies collaborate with vendors to implement cleaner production processes. Apparel brand Levi’s has introduced Water<Less™ – an innovative technology allowing to reduce water consumption by up to 96% during finishing. This has already saved billions of liters of water.
Sustainable transportation
Transportation has been greatly affecting the state of the environment. For instance, in the EU, it generates nearly a quarter of total supply chain emissions. That’s why curbing the climate impact and shifting to sustainable logistics is an urgent priority.
- Investing in low-emission vehicle fleets
Electrifying distribution vehicles dramatically lowers lifecycle emissions compared to diesel trucks. Thus, IKEA has set an aim to introduce a 100% electric last-mile delivery fleet across 30 markets by 2025. Transitioning to renewable electricity for charging enables further reductions.
- Intermodal transport efficiencies
Leveraging intermodal transport that combines rail and truck minimizes emissions for long hauls. Shifting freight transport from air to rail can drastically reduce carbon footprints between regions like Asia and Europe. Using ships to carry containers back after initial delivery eliminates wasted capacity from empty returns. Expanding usage of these multi-modal options significantly cuts logistics emissions.
- Route optimization
Using route optimization platforms analyzes factors like terrain and traffic to generate the most fuel- and time-efficient transit plans. Optimized routing considering vehicle load sizes and road conditions can reduce total kilometers driven, lowering fuel consumption and costs. Switching to electric vehicle fleets would provide additional savings on top of route efficiency gains.
- Partnering with IT providers for enhanced sustainability
Top-notch IT agencies specializing in logistics solutions can provide technologies to track supply chain sustainability, assisting companies in benchmarking and reducing emissions.
- Industry collaboration
Groups that convene companies across retail, logistics, and transportation aim to jointly address emissions from freight movement. By aligning policy priorities and scaling the adoption of eco-friendly logistics across sectors, these collaborative initiatives can accelerate decarbonization industry-wide.
Green packaging
As sustainable logistics companies aim to shrink their environmental footprints, innovating eco-conscious packaging presents a major opportunity.
- Maximizing recycled and renewably-sourced materials
Sourcing post-consumer recycled content minimizes waste while reducing the need for virgin natural resources. Cardboard boxes made from 100% recycled paper prevent additional tree harvesting and cut oil and CO2 emissions by 60%. Some manufacturers even upcycle used cardboard into cushioning inserts, giving materials extended life. Further, biodegradable bio-plastics from plant starches or microorganisms offer plastic alternatives without depleting finite oil reserves.
- Optimizing package and pallet dimensions
With transport emissions tied to weight and cube utilization, optimizing box and pallet dimensions cuts waste and fuels savings. Analyzing common parcel sizes to perfectly fit products helps to avoid oversized containers and excess void fill. Stackable, interlocking transport packaging with a smaller footprint also enables more efficient cargo loading.
- Reimagining distribution networks to enable reuse
Large volumes of single-use transport packaging end up in landfills annually. However, reusable systems with return logistics offer circular solutions. Sustainable logistics companies are investing in developing pooled containers like crates and pallets that continually rotate among sites. Others reclaim used parcels to recondition and reuse. Though requiring upfront infrastructure, these closed-loop models minimize waste over time.
- Piloting creative multi-use concepts
Stretching packaging functionality further, inventive hybrid designs serve various needs across supply chains. For example, reusable plastic envelopes can be transformed into cardboard shipping boxes after delivery. Post-use, the mailer pockets fold back flat for return transit as envelopes again. Such multipurpose packaging promotes circularity from end to end.
Technology enablers for sustainable supply chains
As stakeholder demands for traceability and performance transparency escalate, technology plays a pivotal role in supply chain sustainability transformation. Integrating innovation fosters end-to-end visibility while unlocking efficiency gains.
- Enabling granular insights across complex networks
Sustainable logistics management also implies applying IoT sensors throughout manufacturing and logistics operations. This provides expansive emissions data for pinpointing decarbonization opportunities. Chips embedded in production equipment identify high-energy processes ripe for efficiency upgrades. Sensors on vehicles quantify idling time to target for route optimization.
Additionally, blockchain’s decentralized ledger builds supply chain mapping and component tracing functionality, underpinning credible sustainability claims. Recording key emissions and ethics data cryptographically at each network touchpoint allows more precise carbon accounting.
- Streamlining planning through intelligent automation
AI-enabled automation balances costs, service levels, and sustainability, directing inventory to the greenest transport modes and routes. Continuously optimizing vehicle loads, warehousing workflows and delivery consolidation maximizes asset utilization and prevents overproduction.
Smart manufacturing execution applies predictive analytics and simulations to balance production efficiency with sustainability. Automating energy-intensive processes to run during off-peak renewable energy hours minimizes carbon intensity.
- Centralizing actionable sustainability metrics
Integrating sensors and blockchain data into unified analytics platforms equips enterprises to track waste generation, carbon emissions, and other key performance metrics against dynamic reduction targets. Visual sustainability dashboards centralize reporting on science-based environmental and social KPIs, enabling responsive strategy adjustments.
Using machine learning-based scores and ratings, advanced systems benchmark infrastructure and supplier sustainability for tailored comparisons. This intelligence guides procurement in aligning vendor partnerships for maximum impact.
With the growing consensus that urgent climate progress depends on transparent, verifiable supply chain commitments, technology, and software innovations make a massive impact on the industry and allow specialists to introduce green practices in the most efficient way.
Conclusion
As climate change is becoming more and more obvious, sustainable supply chain practices are no longer optional — they are imperative for business success and environmental stewardship. Strategic investments in innovations like renewable energy and circular models provide the catalyst to reach ambitious sustainability goals. Another vital task is to build logistics software that can fully address the needs of sustainable logistics and supply chain management. By harnessing technology to enable transparency and efficiency, collaborating across industries, and centering long-term resilience, companies can transform their end-to-end supply chains to drive positive impact.
