There are multiple trends driving sustainability in the supply chain right now, says Frank Clary, vice president for sustainability at multi-business operator and investor Agility.
First, there’s the transition to cleaner and more sustainable forms of energy. “What we’re seeing now is a lot of regulatory pressure around energy, a lot of regulatory incentive,” says Clary. “That’s going to impact everything that moves within the supply chain.”
Broadly, companies should be looking to move toward a closed-loop system, in order to reduce waste, and return materials from the supply chain back into it, for re-manufacturing.
Technology, and what it offers in terms of data capture and management, is critical. “Data is huge, Clary says. “We get used to the conversation around finding efficiencies… It could be labor costs, it could be energy costs, it could be material costs. All of that is under the umbrella of efficiency. Now, in today’s supply chain, we incorporate energy consumption and emissions into those data inputs. Getting data around energy consumption and emissions is very, very important.”
Automation is another trend that is helping supply chains become more sustainable. That means deploying it not just to reduce miles traveled, but also for development, product design, manufacturing and packaging. Technology such as additive manufacturing can lessen the incidence of product failure and product rework requirements, reducing waste, Clary says. Of course, it’s important also to use data to improve supply chain planning, demand forecasting and transportation operations.
But, says Clary, the vast majority of carbon in the supply chain comes from manufacturing. “If you can build products in the right quantity, and get them to the right place at the right time, you can reduce your inventory requirements, and that reduces your environmental impact as well as your costs.”
