{"id":34318,"date":"2021-05-26T12:20:33","date_gmt":"2021-05-26T10:20:33","guid":{"rendered":"https:\/\/www.intellias.com\/?p=34318"},"modified":"2024-07-22T14:43:52","modified_gmt":"2024-07-22T12:43:52","slug":"supply-chain-sustainability","status":"publish","type":"blog","link":"https:\/\/intellias.com\/supply-chain-sustainability\/","title":{"rendered":"Supply Chain Sustainability: Why Good Governance Goes a Long Way"},"content":{"rendered":"<p>Sustainability has become a nagging concern, demanded by consumers, investors, and governments in unison. But what does sustainability in supply chain management actually mean? And how feasible is it to move from aspirations and goal-setting to making a tangible impact, especially in the wake of other disruptive events such as the ongoing pandemic?<\/p>\n<p>We decided to look into these questions and take a detailed look at achieving sustainability in the supply chain using emerging technologies and novel approaches to process management.<br \/>\n<div><a href=\"\/digitally-mature-logistics-whitepaper\/\" class=\"whitepaper-banner wow fadeInUp\">\n\t\t\t<div class=\"whitepaper-banner__icon\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/intellias.com\/wp-content\/uploads\/2022\/07\/Digitally-Mature-Logistics.jpg\" alt=\"Digitally Mature Logistics\" width=\"178\" height=\"228\" ><\/div>\n\t\t\t<div class=\"whitepaper-banner__info\">\n\t\t\t\t<div class=\"whitepaper-banner__info-text\">\n\t\t\t\t\t<div class=\"whitepaper-title\">DIGITALLY MATURE LOGISTICS WHITEPAPER<\/div>\n\t\t\t\t\t<div class=\"whitepaper-description\">Conquering the Waves of Technological Disruption<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<span class=\"whitepaper-btn btn-filled\"> Download now <\/span>\n\t\t\t<\/div>\n\t\t<\/a><\/div><\/p>\n<h2>What is supply chain sustainability?<\/h2>\n<p>Supply chain sustainability is a set of corporate activities aimed at ensuring fair labor practices and environmental protection at every link in the supply chain, from the bottom up. By combining processes, policies, and technology, supply chain leaders are looking to optimize every facet of the product journey, from sourcing raw materials to delivering products to consumers.<\/p>\n<p><strong>Key areas of sustainability in supply chain include:<\/strong><\/p>\n<ul>\n<li>Fair worker compensation and decent working conditions<\/li>\n<li>Eco-friendly and ethical raw material sourcing<\/li>\n<li>Minimization of the carbon footprint during transportation<\/li>\n<li>Waste reduction and optimized natural resource use<\/li>\n<li>Collection of full product traceability and provenance data<\/li>\n<li>Having a positive impact on communities where the company operates<\/li>\n<\/ul>\n<section class=\"testimonial-wrap testimonial-wrap--simple\">\n\t\t\t<blockquote class=\"testimonial-block\">\n\t\t\t\t<div class=\"testimonial-block__content\">\n\t\t\t\t<svg class=\"quote-icon\" width=\"75\" height=\"65\" viewBox=\"0 0 75 65\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path opacity=\".3\" fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16 29.7h10c2.4 0 4.4.8 6.1 2.5a8.5 8.5 0 0 1 2.5 6.2v17.4c0 2.5-.8 4.5-2.5 6.2a8.2 8.2 0 0 1-6 2.6H8.7c-2.4 0-4.4-.9-6-2.6a8.5 8.5 0 0 1-2.6-6.2v-32A23 23 0 0 1 7 7.4 23.1 23.1 0 0 1 23.2.6H26a2.8 2.8 0 0 1 2.9 3v5.7c0 .8-.3 1.5-.9 2-.5.6-1.2 1-2 1h-2.8a11 11 0 0 0-8.2 3.3c-2.2 2.3-3.3 5-3.3 8.2v1.5c0 1.2.4 2.2 1.2 3 .9 1 1.9 1.4 3 1.4Zm49.9 0c2.4 0 4.4.8 6 2.5a8.5 8.5 0 0 1 2.6 6.2v17.4c0 2.5-.9 4.5-2.5 6.2a8.2 8.2 0 0 1-6.1 2.6H48.7c-2.4 0-4.5-.9-6.1-2.6a8.5 8.5 0 0 1-2.5-6.2v-32a23 23 0 0 1 6.7-16.4A23.1 23.1 0 0 1 63 .6h2.9c.7 0 1.4.3 2 .8.6.6.8 1.3.8 2v5.9c0 .8-.2 1.5-.8 2-.6.6-1.3 1-2 1H63a11 11 0 0 0-8.1 3.3c-2.2 2.3-3.4 5-3.4 8.2v1.5c0 1.2.4 2.2 1.3 3 .8 1 1.8 1.4 3 1.4h10Z\" fill=\"url(#a)\"\/><defs><linearGradient id=\"a\" x1=\".2\" y1=\"32.6\" x2=\"74.5\" y2=\"32.6\" gradientUnits=\"userSpaceOnUse\"><stop stop-color=\"#45D6AD\"\/><stop offset=\".5\" stop-color=\"#5DB6E1\"\/><stop offset=\"1\" stop-color=\"#BC84CA\"\/><\/linearGradient><\/defs><\/svg>\n\t\t\t\t\t<p>A company\u2019s entire supply chain can make a significant impact in promoting human rights, fair labor practices, environmental progress, and anti-corruption policie.<\/p>\n\t\t\t\t<\/div>\n\t\t\t\t<small class=\"testimonial-block__footer\">\n\t\t\t\t\n\t\t\t\t\t<span class=\"testimonial-block__author\"><span class=\"author\"> <\/span> <span class=\"testimonial-block__position\">United Nations Global Compact Agency<\/span><\/span>\n\t\t\t\t<\/small>\n\t\t\t<\/blockquote>\n\t\t<\/section>\n<p>To achieve sustainability in supply chain management, business leaders are focused on infusing a greater degree of transparency in supply chain operations. Procured data can then be used to locate weak links and problematic practices for improvement.<\/p>\n<div><a href=\"https:\/\/intellias.com\/supply-chain-visibility-and-transparency\/\" class=\"cta-wrap \">\n                    <div class=\"left-col\">\n                        <p class=\"cta-title\">Learn how Intellias helped create a 3D mapping solution for a data visualization system<\/p>\n                        <div class=\"cta-block__content\">\n                            <div class=\"description\"><\/div>\n                        <\/div>\n                    <\/div>\n                     <span class=\"btn-filled\">Read more<\/span>\n\t\t        <\/a><\/div>\n<p>Given the increasing rate of supply chain digitization, technology and supply chain sustainability are inextricably linked; the first enables the second, as we\u2019ll discuss in this post.<\/p>\n<p>What\u2019s driving the demand for sustainable supply chain practices?<\/p>\n<p>From ecological catastrophes to vocal activists and recent healthcare events, global supply chains have been under major strains over the past several years. Other bold reasons for sustaining supply chains are listed in a given MIT report:<img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-34322\" src=\"https:\/\/d17ocfn2f5o4rl.cloudfront.net\/wp-content\/uploads\/2021\/05\/demand-prediction-in-supply-chains.jpg\" alt=\"Supply Chain Sustainability: Why Good Governance Goes a Long Way\" width=\"770\" height=\"320\" srcset=\"https:\/\/intellias.com\/wp-content\/uploads\/2021\/05\/demand-prediction-in-supply-chains.jpg 770w, https:\/\/intellias.com\/wp-content\/uploads\/2021\/05\/demand-prediction-in-supply-chains-300x125.jpg 300w, https:\/\/intellias.com\/wp-content\/uploads\/2021\/05\/demand-prediction-in-supply-chains-768x319.jpg 768w\" sizes=\"(max-width: 770px) 100vw, 770px\" \/><\/p>\n<p><em>Source: MIT Center for Transportation and Logistics \u2014 <a href=\"https:\/\/ctl.mit.edu\/sites\/ctl.mit.edu\/files\/2020-09\/State_Supply_Chain_Sustainability_MIT_CTL_CSCMP_0.pdf\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">State of Supply Chain Sustainability 2020<\/a><\/em><\/p>\n<p>The drivers of greater sustainability in supply chains can be classified into three general groups:<\/p>\n<ul>\n<li>Emerging consumer demands<\/li>\n<li>The rise of impact investing<\/li>\n<li>Global eco agendas<\/li>\n<\/ul>\n<p>Let\u2019s dig into these.<\/p>\n<h3>Consumer demands for sustainability<\/h3>\n<p>Modern consumers are mindful of where their products come from and how they are produced.<\/p>\n<p>Search volumes for terms such as \u201csustainability,\u201d \u201czero waste,\u201d and \u201ceco-friendly\u201d have boomed over the past twelve months. In the wake of the global pandemic, many consumers were forced to change their shopping habits. It seems that many also took this time to reflect on how their daily decisions affect others around the world. From supporting local heritage brands to boycotting multinational brands that fail to ensure employee safety, modern shoppers are embracing social causes and seeking out brands that align with their values.<\/p>\n<p>Here are the latest consumer statistics on sustainability in supply chains:<\/p>\n<ul>\n<li>According to a 2020 report by the <a href=\"https:\/\/www.ibm.com\/downloads\/cas\/EXK4XKX8\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">IBM Institute for Business Value in collaboration with the National Retail Federation<\/a>, 6 in 10 shoppers are willing to change their habits to reduce environmental impact. Also, among those who rank sustainability as very important, over 70% would pay an average 35% premium for sustainable and environmentally responsible products.<\/li>\n<li><a href=\"https:\/\/www2.deloitte.com\/content\/dam\/Deloitte\/au\/Documents\/Economics\/deloitte-au-economics-future-food-uber-eats-100719.pdf\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">Deloitte<\/a> reports that 9 in 10 millennials prefer buying from companies that seek sustainable supply chains, fair employee compensation, animal welfare, and reduced food waste.<\/li>\n<li><a href=\"https:\/\/www.dhl.com\/global-en\/home\/insights-and-innovation\/insights\/logistics-trend-radar.html\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">DHL<\/a> states that 50% of their customers now ask for corporate social responsibility (CSR) information as part of their tender process.<\/li>\n<li>The <a href=\"https:\/\/blog.gwi.com\/marketing\/csr-trends-2020\/\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">Global Web Index (GWI)<\/a> indicates that for 85% of shoppers, a company\u2019s poor environmental track record is a good reason to stop purchasing the company\u2019s goods. On the other hand, most industries have solid potential to monetize their CSR practices:<\/li>\n<\/ul>\n<p><b>Industries with most potential to monetize CSR<\/b><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-34325\" src=\"https:\/\/d17ocfn2f5o4rl.cloudfront.net\/wp-content\/uploads\/2021\/05\/sustainability-in-supply-chains.jpg\" alt=\"Supply Chain Sustainability: Why Good Governance Goes a Long Way\" width=\"770\" height=\"416\" srcset=\"https:\/\/intellias.com\/wp-content\/uploads\/2021\/05\/sustainability-in-supply-chains.jpg 770w, https:\/\/intellias.com\/wp-content\/uploads\/2021\/05\/sustainability-in-supply-chains-300x162.jpg 300w, https:\/\/intellias.com\/wp-content\/uploads\/2021\/05\/sustainability-in-supply-chains-768x415.jpg 768w\" sizes=\"(max-width: 770px) 100vw, 770px\" \/><\/p>\n<p><em>Source: The Global Web Index \u2014 <a href=\"https:\/\/blog.gwi.com\/marketing\/csr-trends-2020\/\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">CSR trends that can make or break a brand<\/a><\/em><\/p>\n<h3>Pressure from investors to go green<\/h3>\n<p>Individual and corporate investors are also encouraging corporations to double down on social and environmental sustainability.<\/p>\n<p>Asset managers, representing trillions of dollars of investments, have petitioned the world\u2019s largest greenhouse gas-emitting companies to <a href=\"https:\/\/www.ft.com\/content\/5ad57cfc-5d17-49e5-b65f-2f3f35423d11\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">reduce emissions by 45% by 2030<\/a> and create plans for reaching zero-carbon objectives by 2050 or earlier.<\/p>\n<p>Impact investing is on the rise too. Over <a href=\"https:\/\/www.lgtcp.com\/en\/news-and-publications\/news\/over-90-of-alternative-investors-believe-the-sustainable-development-goals-will-help-the-financial-industry-to-address-the-most-pressing-global-issues\/#button2\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">90% of investors in alternatives<\/a> (including pension funds, endowments, and insurers) believe that adhering to UN Sustainable Development Goals (SDGs) will help address global sustainability issues.<\/p>\n<section class=\"testimonial-wrap testimonial-wrap--simple\">\n\t\t\t<blockquote class=\"testimonial-block\">\n\t\t\t\t<div class=\"testimonial-block__content\">\n\t\t\t\t<svg class=\"quote-icon\" width=\"75\" height=\"65\" viewBox=\"0 0 75 65\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path opacity=\".3\" fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16 29.7h10c2.4 0 4.4.8 6.1 2.5a8.5 8.5 0 0 1 2.5 6.2v17.4c0 2.5-.8 4.5-2.5 6.2a8.2 8.2 0 0 1-6 2.6H8.7c-2.4 0-4.4-.9-6-2.6a8.5 8.5 0 0 1-2.6-6.2v-32A23 23 0 0 1 7 7.4 23.1 23.1 0 0 1 23.2.6H26a2.8 2.8 0 0 1 2.9 3v5.7c0 .8-.3 1.5-.9 2-.5.6-1.2 1-2 1h-2.8a11 11 0 0 0-8.2 3.3c-2.2 2.3-3.3 5-3.3 8.2v1.5c0 1.2.4 2.2 1.2 3 .9 1 1.9 1.4 3 1.4Zm49.9 0c2.4 0 4.4.8 6 2.5a8.5 8.5 0 0 1 2.6 6.2v17.4c0 2.5-.9 4.5-2.5 6.2a8.2 8.2 0 0 1-6.1 2.6H48.7c-2.4 0-4.5-.9-6.1-2.6a8.5 8.5 0 0 1-2.5-6.2v-32a23 23 0 0 1 6.7-16.4A23.1 23.1 0 0 1 63 .6h2.9c.7 0 1.4.3 2 .8.6.6.8 1.3.8 2v5.9c0 .8-.2 1.5-.8 2-.6.6-1.3 1-2 1H63a11 11 0 0 0-8.1 3.3c-2.2 2.3-3.4 5-3.4 8.2v1.5c0 1.2.4 2.2 1.3 3 .8 1 1.8 1.4 3 1.4h10Z\" fill=\"url(#a)\"\/><defs><linearGradient id=\"a\" x1=\".2\" y1=\"32.6\" x2=\"74.5\" y2=\"32.6\" gradientUnits=\"userSpaceOnUse\"><stop stop-color=\"#45D6AD\"\/><stop offset=\".5\" stop-color=\"#5DB6E1\"\/><stop offset=\"1\" stop-color=\"#BC84CA\"\/><\/linearGradient><\/defs><\/svg>\n\t\t\t\t\t<p>By the end of 2021, 40% of investors in alternatives plan to integrate SDGs into their investment activities.<\/p>\n\t\t\t\t<\/div>\n\t\t\t\t<small class=\"testimonial-block__footer\">\n\t\t\t\t\n\t\t\t\t\t<span class=\"testimonial-block__author\"><span class=\"author\"> <\/span> <span class=\"testimonial-block__position\">LGT Group<\/span><\/span>\n\t\t\t\t<\/small>\n\t\t\t<\/blockquote>\n\t\t<\/section>\n<h3>Global legislative agendas for reaching green goals<\/h3>\n<p>Nearly every country has set targets for becoming fully carbon neutral in the next thirty years.<\/p>\n<ul>\n<li>The EU and the UK aim to be climate neutral by 2050.<\/li>\n<li>China has pledged to become carbon neutral by 2060.<\/li>\n<li>The US has pledged to reach carbon neutrality by 2050.<\/li>\n<\/ul>\n<p>These pledges press companies to seek sustainability in logistics, reducing pollution and resource waste from manufacturing and addressing problematic agricultural practices.<\/p>\n<div><a href=\"https:\/\/intellias.com\/transportation-logistics-software-solutions\/\" class=\"cta-wrap \">\n                    <div class=\"left-col\">\n                        <p class=\"cta-title\">Transportation and logistics development<\/p>\n                        <div class=\"cta-block__content\">\n                            <div class=\"description\">Establish your supply chain as a sustainable business thanks to technology<\/div>\n                        <\/div>\n                    <\/div>\n                     <span class=\"btn-filled\">Learn more<\/span>\n\t\t        <\/a><\/div>\n<p>On top of addressing greenhouse gas emissions, many governments are also pressuring businesses to address other problematic practices pertaining to supply chains and sustainability such as single-use plastic, excessive packaging, child labor, poor working conditions, and unfair compensation.<\/p>\n<p>The global pandemic has further prompted regulators to address waste collection, waste minimization, and waste disposal in response to the growing amount of personal protective equipment (PPE) and face masks entering landfills.<\/p>\n<h2>Supply chain sustainability: key issues and technology solutions<\/h2>\n<p>The pressure to operate in a socially fair and environmentally friendly manner is intense.<\/p>\n<p>But the road to sustainable supply chain operations and ultimate carbon neutrality is tough even for dedicated businesses.<\/p>\n<p>Here\u2019s why:<\/p>\n<ul>\n<li>Sustainable infrastructure is fragmented and there are few zero-emission manufacturers.<\/li>\n<li>Limited visibility into supply chains, especially for the lowest-level partners, prevents the recording of problematic practices.<\/li>\n<li>Bringing supply chains closer to consumers requires significant capital investment.<\/li>\n<li>Achieving sustainability in logistics requires better e-vehicle infrastructure and governmental support.<\/li>\n<li>Extra support needs to be provided by governments and regulators for creating sustainable infrastructure.<\/li>\n<\/ul>\n<p>That\u2019s the big picture of the issues corporations are facing.<\/p>\n<p>On a smaller scale, however, many leaders have already managed to address (and even solve!) some of the troublesome issues affecting their operations thanks to a mix of process optimization and emerging technologies.<\/p>\n<p>In this post, we highlight three supply chain management practices that can be made greener with the right technology.<\/p>\n<div><a href=\"https:\/\/intellias.com\/supply-chain-management\/\" class=\"cta-wrap \">\n                    <div class=\"left-col\">\n                        <p class=\"cta-title\">Supply Chain Software Development Services<\/p>\n                        <div class=\"cta-block__content\">\n                            <div class=\"description\"><\/div>\n                        <\/div>\n                    <\/div>\n                     <span class=\"btn-filled\">Learn more<\/span>\n\t\t        <\/a><\/div>\n<h3>Sustainable packaging<\/h3>\n<p>The growing volume of ecommerce transactions has not only pressured retailers to invest in digital supply chain management solutions for omnichannel operations but also to deal with the growing volume of cardboard packaging.<\/p>\n<p>Demand for corrugated box shipments in the US rose by <a href=\"https:\/\/www.fibrebox.org\/Calendar\/Detail.aspx?EventID=10687\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">9% between March 2019 and March 2020<\/a>. Meanwhile, demand for filled-air packaging products (which are harder to recycle) is poised to increase by <a href=\"https:\/\/www.businesswire.com\/news\/home\/20200624005767\/en\/Insights-Forecast-With-Potential-Impact-of-COVID-19---Air-Cushion-Packaging-Market%C2%A02020-2024-Increase-in-Demand-for-Secondary-Packaging-to-Boost-Growth-Technavio\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">8%<\/a>, or $1.16 billion, between 2020 and 2024.<\/p>\n<section class=\"testimonial-wrap testimonial-wrap--simple\">\n\t\t\t<blockquote class=\"testimonial-block\">\n\t\t\t\t<div class=\"testimonial-block__content\">\n\t\t\t\t<svg class=\"quote-icon\" width=\"75\" height=\"65\" viewBox=\"0 0 75 65\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path opacity=\".3\" fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16 29.7h10c2.4 0 4.4.8 6.1 2.5a8.5 8.5 0 0 1 2.5 6.2v17.4c0 2.5-.8 4.5-2.5 6.2a8.2 8.2 0 0 1-6 2.6H8.7c-2.4 0-4.4-.9-6-2.6a8.5 8.5 0 0 1-2.6-6.2v-32A23 23 0 0 1 7 7.4 23.1 23.1 0 0 1 23.2.6H26a2.8 2.8 0 0 1 2.9 3v5.7c0 .8-.3 1.5-.9 2-.5.6-1.2 1-2 1h-2.8a11 11 0 0 0-8.2 3.3c-2.2 2.3-3.3 5-3.3 8.2v1.5c0 1.2.4 2.2 1.2 3 .9 1 1.9 1.4 3 1.4Zm49.9 0c2.4 0 4.4.8 6 2.5a8.5 8.5 0 0 1 2.6 6.2v17.4c0 2.5-.9 4.5-2.5 6.2a8.2 8.2 0 0 1-6.1 2.6H48.7c-2.4 0-4.5-.9-6.1-2.6a8.5 8.5 0 0 1-2.5-6.2v-32a23 23 0 0 1 6.7-16.4A23.1 23.1 0 0 1 63 .6h2.9c.7 0 1.4.3 2 .8.6.6.8 1.3.8 2v5.9c0 .8-.2 1.5-.8 2-.6.6-1.3 1-2 1H63a11 11 0 0 0-8.1 3.3c-2.2 2.3-3.4 5-3.4 8.2v1.5c0 1.2.4 2.2 1.3 3 .8 1 1.8 1.4 3 1.4h10Z\" fill=\"url(#a)\"\/><defs><linearGradient id=\"a\" x1=\".2\" y1=\"32.6\" x2=\"74.5\" y2=\"32.6\" gradientUnits=\"userSpaceOnUse\"><stop stop-color=\"#45D6AD\"\/><stop offset=\".5\" stop-color=\"#5DB6E1\"\/><stop offset=\"1\" stop-color=\"#BC84CA\"\/><\/linearGradient><\/defs><\/svg>\n\t\t\t\t\t<p>Globally, less than 14 percent of plastic packaging that is produced every year is recycled. If the current trend continues, there will be more plastic than fish in the oceans by 2050.<\/p>\n\t\t\t\t<\/div>\n\t\t\t\t<small class=\"testimonial-block__footer\">\n\t\t\t\t\n\t\t\t\t\t<span class=\"testimonial-block__author\"><span class=\"author\"> <\/span> <span class=\"testimonial-block__position\">Ellen McArthur Foundation<\/span><\/span>\n\t\t\t\t<\/small>\n\t\t\t<\/blockquote>\n\t\t<\/section>\n<p>Companies and regulators have been addressing the packaging issue with varying degrees of success.<\/p>\n<p>Walmart was an early committer to reusable packaging. But an investigation and follow-up lawsuit from Greenpeace suggests the retailer has been using \u201cfalse and misleading\u201d labels for its disposable plastic products and packaging.<\/p>\n<p>Procter &amp; Gamble set a goal to make 100% of its packaging fully recyclable by 2030. But the commitment has yet to be fully set in motion. Other consumer brands such as L\u2019Or\u00e9al, Evian, the Coca-Cola Company, and Unilever) are also looking into the \u201cbox problem.\u201d<\/p>\n<p>Here are some sustainable packaging strategies being tested right now:<\/p>\n<ul>\n<li>Product refilling stations and multi-use containers for staples<\/li>\n<li>Switching to recyclable, reusable, biodegradable, and compostable packaging materials<\/li>\n<li>Introducing closed-loop logistics models where durable, multi-trip packaging assets are used<\/li>\n<\/ul>\n<p>Still, switching to economically viable reusable packaging remains challenging, as adjustments are needed at different stages of the supply chain. Retailers and logistics providers need to consider:<\/p>\n<ul>\n<li>How reusable packaging will be tracked and rerouted back to businesses<\/li>\n<li>The speed and effectiveness of such reverse logistics processes<\/li>\n<li>Which facilities can offer cost-effective cleaning, maintenance, and inspection services for packaging assets<\/li>\n<li>How new types of packaging will be processed on conveyor belts, scanners, etc.<\/li>\n<\/ul>\n<p>All of the above are pressing concerns. Thus, we\u2019ve decided to look into potential technology solutions.<\/p>\n<h3>Tech solutions to reduce waste and packaging costs<\/h3>\n<p>Asset tracking and mapping technologies are a critical pillar for enabling a circular supply chain.<\/p>\n<p>Granted, we already have sufficient technology for that:<\/p>\n<ul>\n<li><a href=\"https:\/\/intellias.com\/internet-of-things\/\">IoT sensors and RFID tags<\/a><\/li>\n<li><a href=\"https:\/\/intellias.com\/gis-services\/\">Location-based services<\/a><\/li>\n<li><a href=\"https:\/\/intellias.com\/gis-services\/\">GIS services<\/a><\/li>\n<li><a href=\"https:\/\/intellias.com\/data-science-and-big-data\/\">Data science and big data analytics<\/a><\/li>\n<\/ul>\n<p>Here\u2019s how these technologies can be used to trace and reuse boxes and other reusable assets.<\/p>\n<p>Depending on the asset type, you can either choose to equip an asset with an RFID tag, Bluetooth Low Energy (BLE) beacon, or printed QR code. Every party interacting with the asset can then scan it to receive the necessary logistics information. All this information can be automatically aggregated in a cloud-based asset tracking system, where you can monitor an asset\u2019s journey through all checkpoints. With data science and predictive analytics, you can use this data to generate comprehensive, predictive reports and get insights for optimizing inefficiencies.<\/p>\n<p>A consumer who receives goods in a box can also use a smartphone to obtain information on recycling or returning the box. For example, you can prompt a consumer to schedule a free pick-up with their next order or guide them to the closest asset collection point. Or you can strike a partnership with a local regulator to facilitate recycling. That\u2019s what <a href=\"https:\/\/www.industrialmeeting.club\/tracking-life-cycle-of-cardboard-and-packaging-for-recycling-legislation\/\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">Recycling Dual<\/a> did. The German company set up a full-cycle recycling process for local customers and ensures that packaging from their products is recycled through a nationwide collection system.<\/p>\n<h3>Product spoilage, damage, and returns<\/h3>\n<p>In the food and fast moving consumer goods (FMCG) industries, some brands hesitate to alter their packaging practices, fearing that it will affect product quality.<\/p>\n<p>Their reservations are valid. Secondary packaging helps protect products from damage during all legs of transportation and prevents spoilage by serving as a barrier against environmental impacts such as light, humidity, and oxygen. Since most packaging currently used has already proved to be moderately effective at preventing spoilage, retailers and logistics companies aren\u2019t rushing to change things.<\/p>\n<p>However, as we mentioned earlier, single-use, non-recyclable packaging is growing into a waste problem. And one that businesses themselves are being forced to solve.<\/p>\n<ul>\n<li>Food recalls are pervasive, with microbiological contamination topping the list of reasons. A <a href=\"https:\/\/www.willistowerswatson.com\/en-US\/Insights\/2019\/11\/insurance-marketplace-realities-2019-fall-update-product-recall\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">recent study<\/a> pegged the average cost of a recall for a food brand at $10 million in direct and indirect costs.<\/li>\n<li>Product returns due to damage double freight costs. The average cost for a five-pound zone 4 residential ecommerce shipment is <a href=\"https:\/\/www.rapidpackaging.com\/wp-content\/uploads\/2017\/05\/How-Damaged-Product-Impacts-Your-Profitability-Rapid-Packaging.pdf\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">$11.66<\/a>. If the product arrives damaged, the expense and profitability loss is $23.32, accounting for the reverse logistics cost and the cost for dispatching the replacement.<\/li>\n<li>No-reason product returns accounted for <a href=\"https:\/\/nrf.com\/media-center\/press-releases\/428-billion-merchandise-returned-2020\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">$428 billion<\/a> in merchandise last year. By 2022, online retailers need to gear up for 13 billion units\u2019 worth of returns, or <a href=\"https:\/\/nrf.com\/media-center\/press-releases\/nrf-says-state-economy-sound-and-forecasts-retail-sales-will-grow\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">$573 billion<\/a>. Yet nearly <a href=\"https:\/\/www.businesswire.com\/news\/home\/20121218005030\/en\/Intermec-Research-Shows-Distribution-Center-Managers-Unprepared\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">half of all companies<\/a> say returns are a pain point for their supply chain.<\/li>\n<li><a href=\"https:\/\/www.itu.int\/en\/ITU-D\/Environment\/Documents\/Toolbox\/GEM_2020_def.pdf\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">78<\/a> countries have regulations that govern e-waste disposal. In most cases, manufacturers are held accountable for dealing with this waste.<\/li>\n<\/ul>\n<h3>Tech solutions for improving reverse logistics and sustainability<\/h3>\n<p>To reduce perishability and recalls, retailers need to improve their cold chain logistics capabilities.<\/p>\n<p>Using a combination of smart sensors, data loggers, location-based services, and integrated <a href=\"https:\/\/intellias.com\/transportation-logistics-software-solutions\/\">transportation management software solutions<\/a>, supply chain managers can gain real-time insights into transportation conditions, plus exert remote control over shipments such as by adjusting the temperature or dispatching real-time instructions to a logistics partner.<\/p>\n<div><a href=\"https:\/\/intellias.com\/cold-chain-logistics\/\" class=\"cta-wrap \">\n                    <div class=\"left-col\">\n                        <p class=\"cta-title\">Learn more about approaches to improving cold chain logistics<\/p>\n                        <div class=\"cta-block__content\">\n                            <div class=\"description\"><\/div>\n                        <\/div>\n                    <\/div>\n                     <span class=\"btn-filled\">Read more<\/span>\n\t\t        <\/a><\/div>\n<p>Secondly, businesses need to introduce better reverse logistics solutions that will allow them to effectively re-route returns or damaged products to the right sites. They might even allow for more granular circular economy management as the chart below illustrates:<\/p>\n<p><b>Combine forward and reverse logistics<\/b><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-34332\" src=\"https:\/\/d17ocfn2f5o4rl.cloudfront.net\/wp-content\/uploads\/2021\/05\/scheme-sustainable-logistics.jpg\" alt=\"Supply Chain Sustainability: Why Good Governance Goes a Long Way\" width=\"770\" height=\"252\" srcset=\"https:\/\/intellias.com\/wp-content\/uploads\/2021\/05\/scheme-sustainable-logistics.jpg 770w, https:\/\/intellias.com\/wp-content\/uploads\/2021\/05\/scheme-sustainable-logistics-300x98.jpg 300w, https:\/\/intellias.com\/wp-content\/uploads\/2021\/05\/scheme-sustainable-logistics-768x251.jpg 768w, https:\/\/intellias.com\/wp-content\/uploads\/2021\/05\/scheme-sustainable-logistics-766x252.jpg 766w\" sizes=\"(max-width: 770px) 100vw, 770px\" \/><\/p>\n<p><em>Source: Archives of Business Research \u2014 <a href=\"https:\/\/journals.scholarpublishing.org\/index.php\/ABR\/article\/view\/4645\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">The Role of Sustainability in Reverse Logistics for Returns and Recycling<\/a><\/em><\/p>\n<p>Furthermore, applying big data analytics for inventory management can help offset the cost and complexity of managing returns.<\/p>\n<p>Some companies are attempting to predict the flow of returns using data points such as:<\/p>\n<ul>\n<li>Average return volume per product category or customer demographic<\/li>\n<li>Most common reasons for returns<\/li>\n<li>Condition of returned goods<\/li>\n<li>Percentage of sales that are returned<\/li>\n<\/ul>\n<p>Using the above insights, businesses can plan ahead for returns and work out strategies for reducing the number of returns in the first place.<\/p>\n<p>Additionally, companies can use a mix of sensor technologies and analytics solutions to reduce the costs of processing returns.<\/p>\n<section class=\"testimonial-wrap testimonial-wrap--simple\">\n\t\t\t<blockquote class=\"testimonial-block\">\n\t\t\t\t<div class=\"testimonial-block__content\">\n\t\t\t\t<svg class=\"quote-icon\" width=\"75\" height=\"65\" viewBox=\"0 0 75 65\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path opacity=\".3\" fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16 29.7h10c2.4 0 4.4.8 6.1 2.5a8.5 8.5 0 0 1 2.5 6.2v17.4c0 2.5-.8 4.5-2.5 6.2a8.2 8.2 0 0 1-6 2.6H8.7c-2.4 0-4.4-.9-6-2.6a8.5 8.5 0 0 1-2.6-6.2v-32A23 23 0 0 1 7 7.4 23.1 23.1 0 0 1 23.2.6H26a2.8 2.8 0 0 1 2.9 3v5.7c0 .8-.3 1.5-.9 2-.5.6-1.2 1-2 1h-2.8a11 11 0 0 0-8.2 3.3c-2.2 2.3-3.3 5-3.3 8.2v1.5c0 1.2.4 2.2 1.2 3 .9 1 1.9 1.4 3 1.4Zm49.9 0c2.4 0 4.4.8 6 2.5a8.5 8.5 0 0 1 2.6 6.2v17.4c0 2.5-.9 4.5-2.5 6.2a8.2 8.2 0 0 1-6.1 2.6H48.7c-2.4 0-4.5-.9-6.1-2.6a8.5 8.5 0 0 1-2.5-6.2v-32a23 23 0 0 1 6.7-16.4A23.1 23.1 0 0 1 63 .6h2.9c.7 0 1.4.3 2 .8.6.6.8 1.3.8 2v5.9c0 .8-.2 1.5-.8 2-.6.6-1.3 1-2 1H63a11 11 0 0 0-8.1 3.3c-2.2 2.3-3.4 5-3.4 8.2v1.5c0 1.2.4 2.2 1.3 3 .8 1 1.8 1.4 3 1.4h10Z\" fill=\"url(#a)\"\/><defs><linearGradient id=\"a\" x1=\".2\" y1=\"32.6\" x2=\"74.5\" y2=\"32.6\" gradientUnits=\"userSpaceOnUse\"><stop stop-color=\"#45D6AD\"\/><stop offset=\".5\" stop-color=\"#5DB6E1\"\/><stop offset=\"1\" stop-color=\"#BC84CA\"\/><\/linearGradient><\/defs><\/svg>\n\t\t\t\t\t<p>The cost of inspecting that good, repackaging it, getting it back on the shelf, the reverse logistics \u2014 all of that often outweighs the value of the good from being sold the second time.<\/p>\n\t\t\t\t<\/div>\n\t\t\t\t<small class=\"testimonial-block__footer\">\n\t\t\t\t\n\t\t\t\t\t<span class=\"testimonial-block__author\"><span class=\"author\">Joel Rampoldt, <\/span> <span class=\"testimonial-block__position\">managing director of AlixPartners<\/span><\/span>\n\t\t\t\t<\/small>\n\t\t\t<\/blockquote>\n\t\t<\/section>\n<p>For example, you can introduce an automatic data capture system. Instead of asking your team to open packages, you can use scannable barcodes or RFID tags that will codify data about package provenance and the reason for the return. In fact, 44% of companies recently surveyed by USPS already use this feature.<\/p>\n<p>By infusing the above system with machine learning and computer vision algorithms, you can also streamline the decision-making process. Using obtained data, a software system can advise you what to do with a returned product \u2014 send it back to the warehouse\/fulfillment center, dispatch it for reconditioning, or upcycle it.<\/p>\n<div><a href=\"https:\/\/intellias.com\/big-data-supply-chain\/\" class=\"cta-wrap \">\n                    <div class=\"left-col\">\n                        <p class=\"cta-title\">Learn more about using big data for supply chain management<\/p>\n                        <div class=\"cta-block__content\">\n                            <div class=\"description\"><\/div>\n                        <\/div>\n                    <\/div>\n                     <span class=\"btn-filled\">Read more<\/span>\n\t\t        <\/a><\/div>\n<h3>Logistics<\/h3>\n<p>Offsetting carbon footprints is a top-of-mind sustainability logistics concern.<\/p>\n<p>Ineffective fleet management, lack of visibility into freight routes, and missing controls over logistics processes and practices drive up logistics costs and emissions.<\/p>\n<section class=\"testimonial-wrap testimonial-wrap--simple\">\n\t\t\t<blockquote class=\"testimonial-block\">\n\t\t\t\t<div class=\"testimonial-block__content\">\n\t\t\t\t<svg class=\"quote-icon\" width=\"75\" height=\"65\" viewBox=\"0 0 75 65\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path opacity=\".3\" fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16 29.7h10c2.4 0 4.4.8 6.1 2.5a8.5 8.5 0 0 1 2.5 6.2v17.4c0 2.5-.8 4.5-2.5 6.2a8.2 8.2 0 0 1-6 2.6H8.7c-2.4 0-4.4-.9-6-2.6a8.5 8.5 0 0 1-2.6-6.2v-32A23 23 0 0 1 7 7.4 23.1 23.1 0 0 1 23.2.6H26a2.8 2.8 0 0 1 2.9 3v5.7c0 .8-.3 1.5-.9 2-.5.6-1.2 1-2 1h-2.8a11 11 0 0 0-8.2 3.3c-2.2 2.3-3.3 5-3.3 8.2v1.5c0 1.2.4 2.2 1.2 3 .9 1 1.9 1.4 3 1.4Zm49.9 0c2.4 0 4.4.8 6 2.5a8.5 8.5 0 0 1 2.6 6.2v17.4c0 2.5-.9 4.5-2.5 6.2a8.2 8.2 0 0 1-6.1 2.6H48.7c-2.4 0-4.5-.9-6.1-2.6a8.5 8.5 0 0 1-2.5-6.2v-32a23 23 0 0 1 6.7-16.4A23.1 23.1 0 0 1 63 .6h2.9c.7 0 1.4.3 2 .8.6.6.8 1.3.8 2v5.9c0 .8-.2 1.5-.8 2-.6.6-1.3 1-2 1H63a11 11 0 0 0-8.1 3.3c-2.2 2.3-3.4 5-3.4 8.2v1.5c0 1.2.4 2.2 1.3 3 .8 1 1.8 1.4 3 1.4h10Z\" fill=\"url(#a)\"\/><defs><linearGradient id=\"a\" x1=\".2\" y1=\"32.6\" x2=\"74.5\" y2=\"32.6\" gradientUnits=\"userSpaceOnUse\"><stop stop-color=\"#45D6AD\"\/><stop offset=\".5\" stop-color=\"#5DB6E1\"\/><stop offset=\"1\" stop-color=\"#BC84CA\"\/><\/linearGradient><\/defs><\/svg>\n\t\t\t\t\t<p>Transportation activities (aviation, rail, shipping, heavy and light trucking) are responsible for approximately 17% of global greenhouse gas emissions.<\/p>\n\t\t\t\t<\/div>\n\t\t\t\t<small class=\"testimonial-block__footer\">\n\t\t\t\t\n\t\t\t\t\t<span class=\"testimonial-block__author\"><span class=\"author\"> <\/span> <span class=\"testimonial-block__position\">Boston Consulting Group<\/span><\/span>\n\t\t\t\t<\/small>\n\t\t\t<\/blockquote>\n\t\t<\/section>\n<p>Given the length and complexity of modern global supply chains, hardly any multinational business can fully avoid heavy-duty transportation. But introducing sustainable tech-led practices to certain operational aspects \u2014 be it <a href=\"https:\/\/intellias.com\/last-mile-delivery-logistics\/\">last-mile delivery<\/a> or <a href=\"https:\/\/intellias.com\/how-to-apply-ai-for-predictive-fleet-management-maintenance-software\/\">on-site fleet management<\/a> \u2014 can drive sizable ecological improvements and cost savings.<\/p>\n<h3>Technology-driven sustainable logistics solutions<\/h3>\n<p>One of the lowest-hanging fruits for achieving emission targets in logistics is delivery route optimization.<\/p>\n<p>The latest generation of <a href=\"https:\/\/intellias.com\/fleet-management-software-development\/\">fleet management software<\/a> enables transport managers to build dynamic routes for minimizing travel distance, travel times, and subsequently emissions. By monitoring a vehicle\u2019s position in real time, you can build better routes to avoid congested areas, effectively handle multiple stops, and reduce the docking time at various checkpoints. Recently, Google Maps <a href=\"https:\/\/www.reuters.com\/technology\/google-maps-start-directing-drivers-eco-friendly-routes-2021-03-30\/\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">announced<\/a> a feature that lets drivers create a route with the lowest carbon footprint. Greenplan <a href=\"https:\/\/www.dhl.com\/content\/dam\/dhl\/global\/core\/documents\/pdf\/glo-core-logistics-trend-radar-5thedition.pdf\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">estimates<\/a> that such route optimization software can help reduce user\u2019s carbon footprints, plus generate a 20% operational cost reduction.<\/p>\n<div><a href=\"https:\/\/intellias.com\/fleet-truck-tracking-system-for-fleet-managers\/\" class=\"cta-wrap \">\n                    <div class=\"left-col\">\n                        <p class=\"cta-title\">Learn how we built a fleet truck tracking system for a Fortune 500 company<\/p>\n                        <div class=\"cta-block__content\">\n                            <div class=\"description\"><\/div>\n                        <\/div>\n                    <\/div>\n                     <span class=\"btn-filled\">Read more<\/span>\n\t\t        <\/a><\/div>\n<p><b>Optimizing package size can reduce transportation costs<\/b>. Most ecommerce products are overpackaged. A full <a href=\"https:\/\/inside-packaging.nridigital.com\/inside_packaging_nov17\/over_packed_unnecessary_packaging_in_e-commerce\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">72% of consumers<\/a> think retailers use too much packaging for online orders. And bigger boxes occupy more space in delivery vehicles, increasing fuel consumption and emissions.<\/p>\n<p>To address the issue, American electronics retailer Best Buy recently invested in new equipment for minimizing packaging for online orders. The system builds custom-sized, optimized boxes by using sensors to measure a product\u2019s size on the conveyor and then churning out the optimal box. Each box is fastened with glue instead of tape. The machine also leaves a perforated edge at one end so the box is easy to open. The system is said to reduce carton waste <a href=\"https:\/\/www.startribune.com\/how-best-buy-tries-to-deal-with-a-glut-of-cardboard-boxes\/511629982\/\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">by 40%<\/a> plus free up floor space in warehouses. Also, the retailer can now load more boxes into delivery trucks.<\/p>\n<p><b>Finally, electric vehicles (EVs) are also poised to drive significant improvements in logistics sustainability.<\/b> At present, <a href=\"https:\/\/www.itf-oecd.org\/sites\/default\/files\/docs\/cop-pdf-06.pdf\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">30%<\/a> of all transport-related CO2 emissions come from fuel combustion. Switching to EV fleets at least for some legs of the logistics journey can dramatically reduce the carbon footprint.<\/p>\n<p>DHL is already putting this idea to the test. The company plans to add over 11,000 electric delivery vehicles in the coming years and become a zero-emissions logistics company <a href=\"https:\/\/www.dhl.com\/global-en\/home\/about-us\/delivered-magazine\/articles\/2017\/issue-2-2017\/zero-emissions-by-2050.html\" target=\"\u201d_blank\u201d\" rel=\"noopener noreferrer\">by 2050<\/a>.<\/p>\n<h2>To conclude<\/h2>\n<p>Supply chain sustainability has become a priority for manufacturers, transportation leaders, and retailers alike. But until recently, most players have been focused on their personal agendas. A greater level of supply chain digitization and interoperability between supply chain participants can turn these disjointed efforts into targeted climate action across sectors. Collaboration will be key for driving measurable improvements and unlocking revenue gains that come from CSR!<\/p>\n<p><em><a href=\"https:\/\/intellias.com\/contact\/\">Contact Intellias<\/a> to learn more about improving supply chain visibility and addressing specific bottlenecks with new technology!<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Learn how to drive a cascade of positive social and environmental changes by addressing problematic areas in your supply chain<\/p>\n","protected":false},"author":18,"featured_media":57302,"template":"","class_list":["post-34318","blog","type-blog","status-publish","has-post-thumbnail","hentry","blog-category-supply-chain","blog-category-transportation"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.4 (Yoast SEO v23.2) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Supply Chain Sustainability: Three Tech-Led Strategies<\/title>\n<meta name=\"description\" content=\"A 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