As the effects of climate change continue to create volatility and disruption across supply chains, sustainability has become an increasingly popular topic in the logistics industry.
Shippers around the world are ramping up their commitment to implementing environmentally conscious solutions.
According to Coyote’s new original research study, Sustainable Supply Chain Management: Driving a Smarter, More Sustainable Future, 81% of global shippers are more focused on sustainability today than they were three years ago.
If you have already introduced sustainable supply chain practices in your operations and are looking to take the next step, insight from your peers is a great resource.
Our study, conducted in partnership with Martec, a third-party research firm, examines how 250 global supply chain professionals are approaching green initiatives in their businesses.
Here are five actionable steps, powered by insights from decision-makers, you can use to continue advancing sustainability initiatives in your own supply chain.
Step 1: Adopt Other Businesses Best Ideas
Once your sustainability program is up and running, has an established owner, has clearly defined goals and is working towards some internal quick wins, it’s time take the next step.
If you don’t know where to invest next, look to your peers for guidance. Unlike many aspects of business, it’s not only acceptable to plagiarize sustainability ideas from other companies — it’s often encouraged.
Find ways to collaborate across your industry. Use research (like our study) to benchmark. Take what you learn from other businesses and prioritize based on what will contribute to your short-term and long-term goals.
Step 2: Align Your RFPs with Your Sustainability Goals
Many shippers start their sustainability journey looking within their four walls. Optimizing your own, internal processes and operations can yield great results, but your business is just one link in the longer supply chain.
Your vendors, carriers and providers can all play a significant role in contributing to your overall initiatives.
Request for Proposals (RFPs) are a great tool to communicate your sustainability goals to your wider network.
Currently 45% of shippers have sustainability as a consideration in their procurement process, but only 25% have it as a requirement.
- If you are in the 30% of companies that does not currently have sustainability as an active consideration in their RFPs, start to bring it in the process.
- If you are in the 45% that currently considers it, start to make it a requirement.
- If it’s already a requirement, look past your direct suppliers and start to examine their suppliers.
Making wholesale changes to your network in one bid cycle is not realistic for most businesses, but you have to at least make it part of the process.
By making sustainability an industry standard in RFPs, we can accelerate significant long-term change.
Need help bringing sustainability requirements into your RFP process? Request a consultation with the Coyote Transportation Management team to get you started.
Step 3: Measure Success Through Sustainability KPIs
If you want to drive visible improvements with your sustainability program, you not only have to define success, but have to be able to measure it.
Make sure your reporting is able to track progress, evaluate your return on investment (ROI) and empower you to make better decisions for future investments.
One of the best ways to measure your success is to use key performance indicators (KPIs) that gauge the overall effectiveness of your sustainability program.
Currently many shippers are tracking fuel efficiency, CO2 emissions and alternative fuel usage.
Remember, committing to environmental sustainability will often require an investment upfront — you will need to dedicate time and resources to seeing your goals through to completion.
Developing strong KPI tracking will ensure you can measure your results along the way, which will help you justify the expense, pinpoint what is working (and what isn’t) and help you to make more strategic decisions in the future.
Step 4: Set Long-Term Sustainability Goals
Once you have started picking the low-hanging fruit, you can take a more holistic, long-view perspective. Measure success in years, not months.
While you may be able to achieve some short-term wins, it’s critical to focus on the long-term returns when defining success for your sustainability program.
Most supply chain professionals are planning ahead by at least 4-5 years.
According to our study, 52% of supply chain professionals expect to meet their supply chain sustainability goals in the next four to five years and 51% expect to meet their goals in the next two to three years.
This underscores the importance of having a solid KPI structure so you can properly track waste reduction over time.
Regular checkpoints will help keep you on track and make these huge numbers more manageable.
The types of goals shippers set also shift in the long-term. The key focus of most short-term sustainability initiatives was around fuel consumption, where the larger goals tend to focus on reducing greenhouse gas and carbon emissions.
“We plan to have 40% less CO2 Emissions by 2023 and replace legacy fleet with alternative vehicles.”
– Supply Chain Director, Food and Beverage/Retail Shipper
Step 5: Bring in Experts
If you feel like you have done all the obvious and don’t know what your next move is, get outside help. Many companies — about 20% of respondents — are consulting with outside experts to help guide their sustainability efforts.
“We brought in a third party to help us analyze where we are and set realistic goals for our supply chain over the next couple of years.”
- Manager of Logistics at a Food & Beverage Company
Keep Pushing for a More Sustainable Future
When sustainability programs work, everybody wins. Not only is it the right thing to do for our planet and all global citizens, your business will also benefit.
According to our study, 84% of consumers are more willing to purchase from brands that are committed to sustainability, and that trend is not going to reverse.
To keep your company relevant in the future, and to continue doing your part to mitigate climate change, it’s important to keep supply chain sustainability as a core business priority.
As you look to build on your foundation, use these five steps:
- Adopt other businesses best ideas
- Align your RFPs with your sustainability goals
- Measure success through sustainability KPIs
- Set long-term sustainability goals
- Bring in the experts
Our research study is a great companion that can help you do some initial benchmarking and see where other shippers are finding the most return on investment.
For in-depth supply chain sustainability insights from 250 global shippers, download SUSTAINABLE SUPPLY CHAIN MANAGEMENT: Driving a Smarter, More Sustainable Future for free.