The modern supply chain is an intricate and nuanced business process that involves numerous key actors, and of course, requires mounds of resources in order to function efficiently and effectively. For those key actors, that is. As for the environment, or the individual logistics businesses involved in the process, the costs can be sky-high. From implementing modern freight forwarders network solutions to digitizing your entire operation and sourcing goods and materials sustainably, there’s plenty you can do to minimize costs for your business and retain your competitive advantage in the process.
But it’s not just about championing new technology or implementing new in-house rules and regulations – it’s about creating a comprehensive sustainability strategy that will encompass all of the relevant solutions from different fields. With that in mind, let us take a look at the five effective ways you can make your supply chain more sustainable, and thus cut costs, strengthen logistics, and save the environment in the process.
1. Identifying and eliminating risky suppliers
First and foremost, it’s important to identify the underperformers as well as the risky suppliers in your supply chain. Why? Because these partners might be holding you back, jeopardizing the entire supply chain, elevating extraneous energy and fuel consumption, and putting your brand’s reputation in danger to boot. By identifying and weeding out the risky suppliers and partners from your supply chain, you can strengthen your position in the industry in a number of ways.
But when it comes to long-term sustainability, such preventive risk management can make all the difference. You can do this manually and sift through all of your tier one and tier two suppliers to analyze their operations and assess their level of sustainability and efficacy, or you can implement automation. Smart risk management tools for logistics businesses are out there, and you can use them to quickly assess the performance of everyone in the supply chain, and take decisive action.
2. Minimizing fuel consumption
The carbon footprint problem is a grand one is the modern logistics world, and forward-looking companies are constantly looking for new ways to cut needless energy consumption in the hopes of reducing expenses while maintaining the same level of productivity, streamlining fleet management, and influencing the bottom line in a positive way. That said, finding alternative fuel options without negatively affecting the supply chain seems more like a pipe dream.
Given the fact that diesel is, and will remain, the most cost-effective fuel source for modern transportation companies, there is a need for logistics businesses to find other ways of lowering energy consumption. Instead of changing the fuel source, you should emphasize better transportation methods and routes, including transporting multiple parcels at the same time and managing your fleet more efficiently overall. To achieve this, you need a cloud-based system.
3. Developing a cloud-based transportation system
Transportation technology has come a long way in recent years, and nowadays, it has become the foundation of every growth-oriented logistics business, simply because managing your operation with the help of a cloud-based transport management system gives you the tools you need to automate crucial processes, and thus save money down the road. If you are not automating your supply chain over time, you are increasing the risk of human error, slowing down shipping lanes, and negatively impacting your bottom line.
What’s more, manually running a logistics business is not long-term, sustainable growth strategy, as you will have no way of expanding efficiently without hiring more labor and increasing your costs. All in all, it’s important for modern companies to build their operations on the foundation of smart technology and automation if they want to stay ahead of the game.
4. Following government rules and regulations
It should go without saying that you should strive to align your business with your country’s environmental and sustainability laws and regulations. What’s more, it’s imperative that you comply with the foreign laws and regulations regarding these issues, and for a number of reasons.
Firstly, doing so will allow you to run a more efficient and productive operation, with better inventory management and transport management overall. But externally, it will help you stay on the right side of the law, and avoid hefty penalties and fines. Global governments are under extreme pressure to minimize the effects of pollution and climate change, so don’t let your business stand in their way.
5. Tending to more sustainable sourcing
And finally, companies that go the extra mile to source all of their materials through sustainable means will not only gain the favor of their governments, but also the consumer market. Be sure to trace your suppliers back to the source, in order to discover their exact production methods and analyze their level of sustainability.
This will help you improve your own operations, build your brand, and of course, find the right suppliers for your supply chain that will work with you towards a more sustainable future.
Logistics is not inherently sustainable. But that doesn’t mean that you shouldn’t strive to change the industry for the better. Not only is the future of the environment at stake, but your supply chain and brand as well, so be sure to implement these solutions in order to build a more sustainable supply chain.