– By Nishith Rastogi
In an era where sustainability is no longer a buzzword but a pressing global imperative, the significance of green supply chains cannot be overstated. Gone are the days of token environmental efforts; today’s world demands a genuine commitment to eco-conscious logistics. All industries must wholeheartedly embrace the concept of greener supply chains, for these systems hold the key to harmonizing consumer demands, business interests, community well-being, and environmental preservation.
As we approach the festive season, it’s crucial to explore how enhancing efficiency and sustainability in supply chains can meet the demands of our modern world and contribute to a brighter, more environmentally responsible future.
Significance of Green Supply Chain
Green supply chain management revolves around waste reduction, pollution mitigation, resource conservation, and curbing carbon emissions associated with products and services. Many enterprises are realizing the significance of green supply chain management and actively introducing initiatives to enhance their overall sustainability. Moreover, 40% of companies push their limits to embrace greener supply chains due to specific issues with the traditional supply chain system.
Key Challenges With the Sustainability of Supply Chain
As greenhouse gas emissions and global warming loom large, governments across the globe have taken proactive steps by enacting stringent regulations to combat these environmental challenges. As a result, businesses see adopting sustainability measures as a mandatory step.
Following are the key challenges faced with supply chain sustainability:
Complexity in Supply Chain
Businesses can collaborate and interdependence among them is essential for smooth operations. A critical challenge in establishing green supply chains is ensuring visibility into vendors’ performance. Consider a multinational corporation that partners with numerous first, second, and third-tier suppliers, often numbering in the thousands. Managing and influencing their operations is a complex task.
Prohibitive Costs for Sustainability
Building sustainable supply chains demands additional resources to develop new standards and strategies. This often means a substantial initial investment by companies. Supply chain leaders are frequently caught between regulatory and customer cost expectations, leading to significant cost pressures.
Lack of Established Sustainable Framework
The concept of sustainability in supply chains is a relatively recent philosophy. Governments worldwide are working towards sustainability in all aspects to protect our planet. Many countries are enacting regulations to address the risks related to environmental, social, and governance (ESG) factors.
Unavailability of Resources
Traditionally, supply chains focused on three key pillars: cost, quality, and lead time. However, mounting concerns about climate change and global warming have prompted a reevaluation of these priorities. This shift has given rise to the concept of a green supply chain. The implementation of a sustainable supply chain not only enhances business value but also minimizes its adverse impact on the planet.
Green Supply Chain Solutions to Improve Efficiency and Sustainability During Festive Season
According to Locus’ Last Mile Maturity Assessment (LMMA), 74% of Indian businesses struggle with last-mile logistics. Green supply chain practices can help to solve the problems associated with last-mile deliveries. Below are some of the best green supply chain solutions for improving sustainability and efficiency:
Green Purchasing
Green procurement, or identifying suppliers offering environmentally sustainable products and services, is equally important as making your operations eco-friendly. It’s worth noting that sustainable sourcing is the cornerstone upon which the entire supply chain operates. Some brands opt to prioritize recycled or remanufactured materials as their preferred approach.
Green Manufacturing
Green manufacturing emphasizes conserving nonrenewable natural resources, minimizing pollution and waste, and maintaining minimal emissions through various eco-friendly practices. The vital aspect of embracing sustainability during this stage is reducing energy consumption. Everything from operating machinery and lighting to controlling the temperature of your facility demands substantial energy usage.
Green Packaging
Green packaging takes into account every aspect of a package’s life cycle. This encompasses everything, from suppliers obtaining materials to how consumers eventually dispose of the packaging. A positive step in this direction is utilizing boxes and packaging materials crafted from post-consumer recycled materials. The market offers various options, including multiple types of recycled paper and corrugated cardboard fillers.
Green Warehousing
Green warehousing is centered on enhancing the efficiency of warehouse operations while minimizing waste and energy consumption. A significant challenge to address is the rapid obsolescence of warehouses, as older facilities tend to be less energy-efficient, resulting in increased CO2 emissions. Thankfully, renovations can play a vital role in transforming warehouses into more environmentally friendly spaces.
Integrating green supply chains during the festive season is the key to a more sustainable and efficient future, benefiting businesses and the environment. Let’s celebrate with purpose and responsibility.
(Nishith Rastogi is the founder and CEO of Locus.)
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