Strategies for a Sustainable Supply Chain

8/24/21 12:00 AM

The planet's resources are under threat because of the way we extract, consume, and produce the things we need. Now more than ever, sustainability within supply chains is a must to ensure that we can protect our resources.

strategies to create and maintain a sustainable supply chain

Sustainability refers to the processes that are able to meet our current needs without harming future generations. This is done by promoting environmental protection, product improvements, risk minimization, and innovation. 

In recent years, many companies have pledged to create and maintain sustainable supply chains. These companies realize the importance of protecting the environment, even if there may be tradeoffs between profitability and sustainability. 

 

3 Elements of Supply Chain Sustainability:

  1. Financial Responsibility - This is an element of sustainability that addresses the financial needs of the shareholders, employees, customers, business partners, financial institutions, and other entities that supplies the capital for the production of products or relies on the firm for wages or reimbursements.
  2. Environmental Responsibility - This is an element of sustainability that addresses the ecological needs of the planet and the firm's stewardship of the natural resources used in production. With this element, emphasis is placed on protecting the environment and preventing short- and long-term damages.
  3. Social Responsibility - This element of sustainability addresses the moral, ethical, and philanthropic expectations that society has on an organization. It incorporates the idea of sustainable development that focuses on social development while protecting the environment.

Once common misconception about sustainability is that there are high costs associated with building a sustainable supply chain. However, many strategies that are involved in creating a sustainable supply chain can also be cost effective. For example, shortening the supply chain is reducing the amount of energy required to move goods through the process and can help reduce costs associated with transportation.

 

Strategies For a Sustainable Supply Chain

  1. Remove Waste - Ensure that all of your resources and materials are used at peak efficiency through end-to-end visibility. Poor planning can lead to having excess materials and waste that has to be discarded.
  2. Reduce Packaging Materials - Re-designing your packaging to use less material can lower the costs associated with packaging and transport as the total weight of the product is reduced. In addition, designing packaging that can be recycled or returned can further reduce the costs associated with packaging.
  3. Maintain Compliance - Ensure that your supply chain meets environmental regulations for sourcing, clean air, and emissions. 
  4. Source From Sustainable Suppliers - Collaborate with all levels of the company to find suppliers that have long-term sustainability goals that are in line with your company's goals. This can involve choosing local suppliers and micro-suppliers. 
  5. Reduce Inventory - Eliminate costly stock-outs and wasteful overstocks by precise prediction and balancing your supply and demand. Excess inventory can be costly to maintain and may become obsolete if products are not sold.
  6. Cut Carbon Emissions - By identifying the most efficient route and delivery options, you can reduce the carbon footprint of the company. In addition, shortening the supply chain by sourcing raw materials closer to the end customer can further reduce carbon emissions associated with transportation.

In order to build a sustainable supply chain, you need to have communication with all levels of the company to align your goals and discuss tradeoffs if they should occur. If certain individuals are focused on creating the most cost effective supply chain while others are trying to build a sustainable one, there may be some miscommunication about what the objectives are and how certain tradeoffs should be evaluated. As such, there should be a constant dialogue about the goals of each department in the company so that the best possible decisions are made. 

Instead of seeking and tracking down information, it is being ‘radiated’ to our team. Our guys can see if things are received on the line. We can click a button to see how many cases we’ve run, and then monitor that as it goes. PlanetTogether APS aligns us more.

BRIAN GOODWIN, MASTER SCHEDULER, NEW BELGIUM BREWING

In addition, an ongoing re-examination of the supply chain is important as risks and priorities may change from one quarter to another. Demands and costs may change so the company leaders must evaluate the tradeoffs and the cost implications as sustainability initiatives are evaluated. 

A tool that can greatly benefit companies to reduce their waste and excess inventory is a planning software that allows you to create what-if scenarios that allow you to analyze the effects of minimizing inventory for certain products. This can help you reduce your overall inventory levels while prioritizing certain products.

 

Advanced Planning and Scheduling (APS) Software

Advanced Planning and Scheduling Softwares have become a must for modern-day manufacturing operations as customer demand for increased product assortment, fast delivery, and downward cost pressures become prevalent. These systems help planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans. APS Systems can be quickly integrated with an ERP/MRP software to fill the gaps where these systems lack planning and scheduling flexibility, accuracy, and efficiency.

With PlanetTogether APS you can:

  • Create optimized schedules that balance production efficiency and delivery performance
  • Maximize throughput on bottleneck resources to increase revenue
  • Synchronize supply with demand to reduce inventories
  • Provide company-wide visibility to resource capacity
  • Enable scenario data-driven decision making

The implementation of an Advanced Planning and Scheduling (APS) Software will take your manufacturing operations to the next level of production efficiency by taking advantage of the operational data you already possess in your ERP system. APS is a step in the right direction of efficiency and lean manufacturing production enhancement. Try out a free trial or demo!

Related Capacity Planning Video

 APS Resources

Topics: Lean Manufacturing, supply chain, strategic goals, Sustainability

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