Strengthening your supply chain one link at a time. 

Tackling Sustainability within the Supply Chain

Following up from last week’s blog post (link here) introducing Environmental Social and Governance (ESG), this week we are diving into the “E” and the relevance to supply chains.

By now everyone has heard about sustainability and supply chains, both independently and jointly (separately and their interdependence?). Originally defined by the United Nations in 1987, sustainability means, “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Given the emphasis on climate change, and the real risks of not achieving the latter part of that definition, businesses and individuals worldwide have been searching for ways to become more sustainable. We all have a part to play but organizational impacts can certainly move the needle further than an individual. Some industry supply chains can account for 80% of their greenhouse gas emissions so even small changes make a positive impact.

When looking at your organization’s supply chain, understanding a product’s lifecycle and potential impacts along the way are critical. This is referred to as a Lifecycle Assessment (LCA). Think about your end-to-end supply chain, tracing your product back to raw materials through its final use to a customer and its ultimate disposal.

See the image below for a sample product lifecycle and how the supply chain helps define that lifecycle. Each of these lifecycle stages has a series of inputs and outputs. The common inputs throughout the chain include energy, water, and packaging materials while common outputs include emissions (air or water) and waste. Emissions can be categorized as Scope 1, 2, or 3 depending on their direct or indirect relationship to operations (for more info on scopes 1 and 2, click here and for scope 3 click here). At each stage in the supply chain, these inputs and outputs can be measured to develop a baseline and these numbers can help illuminate the areas of opportunity for reduction, yielding a more sustainable product.

Here are some ideas on sustainable opportunities to explore at each of the supply chain stages. This list is not exhaustive but can help direct efforts to identify quick wins.

• Procurement of Raw Materials
  • Select suppliers with similar (or better) sustainability goals and programs
  • Identify alternative/creative solutions for raw materials and incrementally diversify suppliers to transition, if possible
  • Manage suppliers with transparent and effective relationship management
• Processing and Manufacturing – whether in-house or with a 3^rd party
  • Explore renewable energy options to power the facility
  • Determine if there are any options to recycle potential waste back into the process and implement traditional recycling programs for excess packaging
  • Examine operations for opportunities to reduce raw material usage and reduce waste streams (upgrade to efficient equipment, optimize process flows, etc.) – depending on your operations this could be a small or big undertaking
• Distribution and Warehousing
  • Initiate network optimization with emissions in mind, not just cost and closeness to customers. You might find customers are willing to wait a little longer knowing their packages are traveling in the most efficient way.
  • Explore opportunities for utilizing renewable energy for warehousing operations
  • Explore alternative transportation solutions – eliminate air freight, utilize green corridors when they become available, incorporate creative delivery methods (gig delivery, EV fleets, drop shipping, etc.)
  • Choose packaging solutions that are right-sized and eco-friendly (compostable, biodegradable, etc.). Work closely with those suppliers on their makeup to ensure consumers are not burdened with an unknown disposition.
• Consumer use & End of Life– arguably the hardest stages to control
  • Educate customers and provide solutions/options for how to appropriately use the product to maximize its lifetime value
  • Be proactive: Offer suggestions and guidance for what to do with the product once it has reached end of life. Consumers often feel burdened or confused about what to do with something which likely yields the wrong action (or inaction).

Despite the end of formal product lifecycle, there are more opportunities to continue exploring in the supply chain. As technologies continue improving, it’s important to stay abreast of opportunities to reduce emissions, explore circularity, and achieve zero waste.

—-Kira Bilecky, St. Onge Company

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