How can supply chain management help companies reduce their carbon footprint?
Have you ever wondered what the future of our planet might look like under these supply chain management conditions? As scientists predict, the planet will rise to an unacceptable level within 20 years if carbon dioxide emissions continue at their current rate.
Supply chain managers play a crucial role in the struggle against climate change by being conscious of how to attain carbon neutrality or even how to turn their business into a zero-carbon one that prioritizes energy efficiency. Beyond what an individual can do to lessen their carbon footprint and improve energy efficiency, companies that cut carbon emissions enhance our prospects of preventing climate change, so we require leaders to act decisively!
Clearly, companies are under high pressure to use innovative, sustainable business practices and take into account all phases of their supply chain to achieve this. Let’s delve into the details and find out how supply chain management can help companies reduce their carbon footprint.
The Role of Supply Chain Management in Reducing Carbon Footprints
There are numerous approaches for a supply chain organization to reduce its carbon footprint. Like all businesses, a supply chain company can become carbon neutral by employing strategies like paper recycling, web-based communications, and eliminating air travel.
Instead of outsourcing the carbon-intensive components to lower the reports of baseline emissions, it’s essential to aim to reduce carbon emissions in each sector of production since a specific supply chain company might not be involved in every step of the supply chain.
Considering that transportation accounts for one-third of US carbon emissions, a company can significantly reduce its carbon footprint by focusing on renewable fuels for the transport of its products.
With sophisticated supply chain visibility, a supply chain manager may make more educated decisions about how to enhance management. Visualization technologies have altered many sectors of business, including the supply chain. A supply chain organization can attain a net carbon-zero footprint by finding more energy-efficient methods for receiving, transporting, and storing goods.
Any business that manages a supply chain will benefit from having a leader with strong experience in technology and innovation since future supply chain management will depend on technological understanding and analytics.
7 Tips to Reduce Your Carbon Footprint
Being environmentally conscious on a personal level is straightforward since things like recycling, cutting back on waste, and purchasing sustainable goods are already widespread behaviors.
The following advice will help you determine where to begin reducing your business’s carbon footprint:
- Boost productivity while reducing waste
If you’re trying to lessen your carbon footprint, then waste reduction is definitely your top concern. It’s especially true for manufacturers. What’s more, you should try to find areas where your processes may be more efficient. This is the key to reducing waste in your supply chain.
So, ask yourself if any procedures could be streamlined or combined, or if any equipment and materials can be used for multiple purposes.
- Reuse and recycle resources
Recycling on a personal level represents a minor contribution, but companies that commit to recycling can have a considerably more significant impact. Finding ways to recycle or reuse materials that you would otherwise throw away or replace will significantly reduce your carbon footprint and help you save money by lowering your overall spending.
- Ensure communication and transparency among partners
To develop a more eco-friendly business strategy, you should be on the same page with all your business partners. When your company launches a new green project, everyone in your supply chain should understand your objectives and support you in achieving them.
Assuring effective communication channels is essential for corporate success, but it becomes even more important when it comes to sustainability, as this can prevent errors that would lead to excessive waste.
- Find suppliers who share your viewpoints
If your suppliers are resistant to change, it could be wise to reevaluate which ones you continue to work with since it can be challenging to lower your carbon footprint without the help of the other companies in your supply chain.
Dealing only with vendors who support your green project will be more likely to influence other vendors who wish to work with you. This can lead to changes that go beyond your supply chain and have an advantageous impact on your industry as a whole.
- Establish sustainability targets
Companies often set sales targets, which serve as a means to evaluate achievement and motivate staff. Similar principles can apply to sustainability goals. You may better understand where your company needs to implement greener policies by reviewing your waste and emission-generating procedures. This approach will also help you maintain focus on your eco-friendly objectives.
- Examine and update your logistics
Consolidating your supply chain to increase efficiency provides advantages for the environment as well. Working with fewer suppliers results in fewer deliveries and lower emissions. So, it is worthwhile to assess your existing logistics and determine whether any deliveries can be merged. Try to order more stock at once and receive deliveries less frequently, or consider switching suppliers for some products to decrease the number of deliveries.
- Advance planning and adaptability
It may be difficult to lower your carbon footprint if you run your business too dynamically. The best strategy for a more environmentally friendly supply chain is to plan while remaining adaptable to change. Reducing waste and shortening lead times can be accomplished by collaborating with your suppliers on a sales estimate for your company.
Furthermore, by planning and seeing if there are any other sustainable products you can use in times of shortage, you can run your business more efficiently all year while remaining sustainable.
Carbon Emissions in the Supply Chain Industry: Current Situation and Future Challenges
Many companies attribute the majority of their supply chain emissions to freight. However, for some, their manufacturing processes outweigh the costs associated with shipping. Even though it is less frequent than ocean freight, air freight leaves a far larger carbon footprint.
According to McKinsey and CDP data from 2016, consumer packaged goods (CPG) are responsible for about 33 gigatons of CO2 in greenhouse gas emissions. To reach global sustainability goals like those set in the Paris Agreement, the industry needs to reduce these emissions by nearly half by 2050.
CPG companies will need to reduce their greenhouse gas emissions by 92% of their revenues by the year 2050. Based on the CDP’s 2019-2020 report, supply chains could potentially save one gigaton (one billion metric tons) of emissions if they raised their purchases of renewables by 20%.
The top five emissions sources, according to the Center for Climate and Energy Solutions, are as follows:
- Electricity and heat (31%)
- Transportation (15%)
- Manufacturing (12%)
- Agriculture (11%)
- Forestry (6%)
As you can see, the global effort to reduce greenhouse gas emissions is gaining momentum. Companies implementing sustainable practices will be leaders in the expanding sustainable economy, both within and outside their supply chains. Making “green” adjustments doesn’t always mean a complete overhaul of your company. However, committing to being more sustainable will definitely encourage others to follow your lead.
Along with other well-known companies like Amazon, Starbucks, and Levi, Unilog is making efforts to become a carbon-neutral company that values energy efficiency and aids its clients in doing so.
Therefore, if you are a company executive who views reducing carbon emissions as a top global priority, Unilog can provide you with comprehensive support as you implement cutting-edge sustainable business practices and endeavor to reduce the carbon footprint of your supply chain.
So, why not inquire about how we can assist you in lowering your company’s carbon footprint?