Starting Your Supply Chain Sustainability Program (in 5 Simple Steps)
In recent years, the logistics industry has found a new sense of urgency when it comes to sustainability.
As concerns about climate change continue to ramp up, shippers around the world are more committed than ever before to implementing sustainable supply chain solutions.
However, with cost barriers — especially for small to midsize businesses — and unclear ownership, where do you start your efforts?
The best way to break into supply chain sustainability is to learn from what others are doing.
For this reason, Coyote partnered with Martec, a third-party research firm, to deliver a new sustainability research study that examines how supply chain professionals around the world approach green initiatives in their business.
Notably, we found that 81% of global shippers are more focused on sustainability today than they were three years ago, and that trend was consistent across company size, industry and region.
We also found that most shippers expect to realize cost savings. Though there are barriers to starting a sustainability program, the long-term benefits in the form of return on investment will be worth it.
If you are just starting to introduce sustainable supply chain practices into your operations but don’t know where to begin to achieve cost-saving improvements, here are five steps to help you get started.
Already have supply chain sustainability initiatives at your company? Get 5 steps on how to keep advancing your efforts.
Step 1: Establish an Owner for Sustainability Initiatives
Every department and employee must do their part to implement and advance sustainability at your company; however, it’s important to determine who should “own” your program.
Regardless of who you decide upon to lead your sustainability efforts, it’s important to make sure your sustainability initiatives are both cross-functional and collaborative.
According to our study, supply chain is leading the way, with supply chain managers being the most likely owners of sustainability initiatives (37%).
Many companies even have a dedicated sustainability manager (14%) and/or a full sustainability team (28%).
Whether you work in supply chain or another function within your company, you have the ability to make major contributions to your company’s green initiatives.
Step 2: Start the Conversation
Once you have a leader (and potentially a team) in place, it’s time to start involving every part of the business — communication is key.
It’s important to collaborate across all levels of your company. This will help you obtain accurate information and focus your attention on the most efficient solutions for your company.
By asking the right questions and taking the initiative to find answers, you can identify opportunities for sustainability improvements.
“Start somewhere. The biggest risk is not starting sustainability initiatives because you want to do the best immediately. The most practical way to get there is to just start doing better.”
– Jaap Bruining, SVP and Head of Europe, Coyote Logistics
Step 3: Look for Small Wins Within Your Own Operations
Setting short-term goals and paying attention to small wins within your company are simple ways to gain traction with your initial sustainability efforts.
Often times shippers look at their own operations first. Where can you cut carbon (and maybe even cost) within your four walls? Begin with achievable, short-term goals.
Start by prioritizing sustainable operational changes that will result in the highest return on investment (ROI).
“Our goal is to be less dependent on fossil fuels, basically reducing fossil fuel usage by 75% in the next 10 years.”
– Director of Logistics, Food and Beverage Shipper
According to our survey, respondents are currently getting the highest ROI on internal, fuel-related programs for their own fleets, such as fuel alternatives, fuel consumption optimization, idle time reduction, and route optimization.
Partnering with “greener” carriers and using more digital solutions throughout your supply chain are other great ways to add network efficiency and reduce your carbon footprint.
Learn more about how Coyote is helping carriers improve their sustainability practices through dynamic route optimization and automatic reloads.
Step 4: Set Clear Goals and Measure Them
It’s important to determine what success looks like for your company and decide how you will accomplish it.
If you do not have clear goals and benchmarks, you will not be able to evaluate your sustainability efforts and make more strategic investments going forward.
Currently, 98% of shippers have at least some sustainability program, but only 71% have measurable goals.
Remember, continuous improvement over time can have a dramatic impact on your company’s efficiency, effectiveness, and bottom line.
Making small, incremental changes over time is a reliable way to make sure that your company can sustain and support sustainability efforts in the long run.
“We have both short-term and long-term goals. The short-term goals involve small improvements, such as measuring idle time of drivers, and the long-term goals include overall fuel for fleets or fleets themselves.”
– Manger of Logistics, Consumer Goods Company
Step 5: Shift to Digital
Last year we conducted a study that found that the optimal balance between technology and human expertise was 60:40 in favor of technology.
With that in mind, shippers who want to start improving their sustainable supply chain management practices should look towards leveraging better digital solutions.
Converting more of your tasks to digital goes beyond the obvious benefit of reducing paper waste (although that’s always a great initiative too).
It’s about thinking bigger and using technology for greater visibility to help you streamline your operations and eliminate waste in the form of dedicated fleet empty miles, inefficient routes, underperforming carriers, intermodal conversion opportunities and more.
With advances in technology, including predictive analytics, you can further reduce waste and even get ahead by getting matched with the right carriers that fit your requirements — whether that be lanes, on-time performance or fuel alternatives.
Ready to start using a digital freight platform to improve your efficiency? Sign up for CoyoteGO®.
Committing to Sustainable Solutions
Across all industries and regions, 81% of companies are more focused on sustainability today than they were three years ago, and 84% of consumers are more willing to purchase from brands that are committed to sustainability.
That trend is not going to reverse — it is only going to become a more important part of every business’ strategy.
Not only is it the right thing to do for our planet and all global citizens, your consumers are demanding it.
“An efficient supply chain is a sustainable supply chain.”
– Mike Sinkovitz, SVP of Transportation Management, Coyote Logistics
You can begin your sustainability journey towards long-term cost and emissions savings with these 5 steps:
- Establish an owner of sustainability at your company
- Start the conversation across all department in your business
- Prioritize small wins in your internal operations
- Set clear goals within your RFP process
- Go digital for efficiency gains
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.