According to a McKinsey report, approximately 90 percent of the environmental damage caused by businesses comes from supply chains. Fortunately, this growing concern is raising awareness for sustainability, and it’s changing the nature of business.
Over recent years, more and more companies look to improve sustainability within their supply chains by managing economic, social, and environmental performance.
By doing so, businesses can protect resources, save costs, reveal product reorganizations, make the most of processes, and increase productivity. Additionally, 85 percent of consumers say they’d be more willing to buy products from a company with sustainable methods.
In an interview with Niko Polvinen, co-founder and CEO of Logmore, a supply chain analytics startup from Finland, we discussed some of the major ways businesses can implement more sustainable supply chains, and how this topic is affecting business today.
Q: In 2021, what kind of changes are taking place in the supply chain?
For the past decade, sustainability has become an increasingly important concern for businesses all over the world. This past year, the global pandemic has motivated the industry to set new goals for supply chains.
Recently, several positive movements and values have increased consumer awareness for sustainability. Because of these recent developments, companies are implementing a lot of new technology to measure and achieve the new metrics and goals.
More than ever before, data is being collected from all sorts of different operations. Company leaders are then using their data to become as resource-efficient as possible. As the world is being exposed to more and more data, companies are just now learning how to use it to bring about positive change.
Q: For brands looking to modernize their supply chains, what would you recommend?
Setting goals, implementing training programs, and emphasizing how important sustainability is can drive behavioral changes throughout the team and thus, modernize supply chain management styles.
Many external recourses and tools are available to the public, and using these resources can help support your sustainability efforts. For instance, one effective way to enhance supply chain understanding is to use case studies and suitable practices from leading suppliers.
Years ago, companies used to use sustainable supply chain management as a competitive advantage. But now, it’s become a necessity. People simply won’t buy your product unless they know you’re running proper supply chain methods.
If you’ve just begun your sustainability improvement plan, recognize the level of your consumption. Once you know the starting level, set goals to determine how you can achieve that goal. By leveraging those recourses, you can develop programs that are catered specifically to your team and your company’s goals.
Q: With all of this in mind, why is sustainability so important for proper supply chain management?
Sustainable supply chains are quickly becoming a necessity for many companies. But it’s more than just recycling and using renewable recourses; environmental responsibility is one of the key focal points of today’s industry.
Creating a sustainable supply chain has many positive impacts that can improve the overall status of your company. Using sustainable methods and eco-friendly recourses, businesses can save money, boost productivity, and increase the efficiency of machinery, vehicles, and buildings.
Today, implementing a sustainability program isn’t just a competitive advantage — it’s a necessity. All of your competitors already have a sustainability program, and they’re likely already creating new methods to improve their current programs. This raises the bar according to which buyers will be evaluating you.
Consumers — specifically the younger generations — tend to base their judgments of a company on whether or not they embrace sustainability. For example, companies that advocate for climate change are particularly seeing growth.
Nearly 80 percent of American consumers anticipate companies taking action against climate change, and over 70 percent of Americans say they would stop buying product from a company that doesn’t address climate change.
These statistics alone show just how important sustainability is to consumers, and why companies need to start implementing new supply chain tactics.
Q: On a more specific, personal level, what role does sustainability play in Logmore’s operations?
At the very beginning, Logmore was built around the idea of sustainability. Our data logger devices, which are at the center of the solution we offer to our customers, are encased in 62 percent recycled plastic, and we make sure to manufacture them without any hazardous materials. And while we operate in an industry where one-and-done loggers are the standard; we’ve designed ours to be used over longer periods.
When our loggers are no longer usable, we encourage our customers to send them back to us so we can refurbish them or reuse their parts.
Through our data loggers and analytics software, Logmore helps businesses cut back on wasted resources by ensuring accessibility of data to all parties involved in the supply chain.
Q: For brands looking for a more environmentally friendly supply chain, what simple changes can they make today?
As you start establishing new methods that comply with sustainability standards, it’s important to communicate these ideas to your company. Conveying the message through a supplier code of conduct is a big step towards including suppliers in your sustainability plans.
How a brand can improve sustainability in their supply chains entirely depends on what level they operate on. There’s no single magic button. But by assessing the situation, setting goals, and determining how you can develop methodically, your company take the appropriate steps towards improvement.
As you make your way through those goals, communicate the accomplishments to the workforce. Whether it’s instructing employees on new ways to log activity or teaching fleet drivers how to utilize their routes to cut back on fuel consumption, make sure that everyone is contributing. Ensuring everyone is on the same page can help the company more effectively work to improve supply chain sustainability.