Sustainability: Part 2 - The Role of Global Supply Chain Managers

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In part one of The Sustainable Supply Chain, we discussed the drivers behind the move to more efficient and sustainable supply chains. Now we turn to how supply chain managers can help and the solutions they have at their disposal.

The effective management of an enterprise’s supply network is becoming a huge part of the sustainability and corporate social responsibility answer for many firms, particularly in reducing GHG emissions to the greatest extent possible. Supply chain managers should consider their positive impact in the following areas:

Chain-of-Custody and traceability processes for items, shipments, and origins can be completely tracked, so that all approved sources of raw materials, intermediates and finished products, as well as all their paths thru the supply chain are 100% verified and auditable. This very much supports today’s trends in CSR disclosure related to sourcing practices.

Lowering Inventory while achieving higher service levels means less making, moving, storing, and waste from obsolescence. Some companies have achieved dramatic inventory reductions of 30% or more with improved customer service using network business processes – which offers enormous value for a sustainable business.

The Sustainable Supply Chain: SCM technology can help companies lower inventory while achieving higher service levels, which means less making, moving, storing, and waste from obsolescence. - Reiner Musier, Ph.D. Click To Tweet

Eliminating Waste and Obsolescence can have a huge sustainability impact and is vital in grocery and food service industries, pharmaceuticals, and even consumer goods and manufacturing where tastes and model preferences can change quickly. Not only does waste imply poor stewardship of every resource that went into the wasted product, in some cases there are additional logistics and disposal costs incurred – additional environment penalties related to the material’s ultimate disposition.

Optimizing Transportation & Logistics. Companies can reduce miles traveled (and associated greenhouse gas emissions) for the same or greater freight volumes with optimized transportation processes:

Route Optimization means fewer miles overall, reduced time sitting in traffic on congested routes, and eliminates empty miles.
Optimizing Modes – truck vs rail vs ship vs air – helps to mitigate environmental impact, as well as costs.
Reducing Expedited Freight so that extraneous deliveries are eliminated and more trucks are filled to capacity with fewer exceptions through improved planning and operations.
Eliminating “Deadhead Loads” (empty trailers) and leveraging backhauls to reduce empty miles allows companies to reduce costs, all while still supporting business growth.
Dock Door Scheduling to streamline flow-through and minimize congestion in the yard, to dramatically reduce truck idle time.
Applying Intelligent Agents to resolve supply chain issues quickly across large networks, even enabling continuous, intraday optimization. AI can help identify issues proactively and recommends or autonomously executes the best resolutions before they become major problems that are more difficult and resource-intensive to fix.
Improving Transportation Partner Management with metrics and tracking means freight volumes can be shifted toward carriers with good environmental and fleet maintenance track records, vs carriers with poor environmental performance.
Reduce reliance on paper and manual processes, along with the associated manual “back and forth” processes that tie up and consume resources on both ends of planning, tendering, tracking and invoicing.

Reporting & Analytics allow activities and performance to be tracked and reported on a periodic basis in a highly efficient manner – and even in near-real time. Further, administrative overhead related to CSR programs is reduced to a minimum, because end-to-end traceability, accurate real-time visibility, supply chain performance analytics are inherent in today’s business network platforms.

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Effective Management of Your Enterprise Supply Network

Every business can benefit from using resources more wisely – doing more with less. It’s good business and reduces negative impacts on the environment. With network platforms, companies and their ecosystem of trading partners are better connected and have total visibility into resources and constraints, enabling them to make better decisions and deploy resources more effectively for sustainable operations.

Network platforms connect the entire supply chain, provide visibility into resources and constraints, enable better decisions and resource use for more sustainable operations. - Reiner Musier, Ph.D. Click To Tweet

As the World Economic Forum reports: “Two of the most important ‘no-regret’ capabilities are: Companies should improve their collection of data from all along their value chain; and enterprises should ensure they have the capability to analyze big data streams to derive insights that improve operational efficiency and enable the launch of new services, such as last-mile delivery.” Multiparty business network platforms enable this, while helping enterprises optimize supply network operations and achieve their sustainability objectives in the most cost-effective way possible.

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Reiner Musier

Reiner Musier, Ph.D. is marketing executive and is a speaker and author on environmental markets and related commodities, including “Emerging Carbon Markets and Fundamentals of Tradeable Permits” (Academic Press, 2010). Dr. Musier received his degree in engineering from M.I.T, with a specialty in optimization of planning and scheduling in supply chain operations.