Sustainability is becoming an increasingly important concept in all areas of business. Within the manufacturing and distribution industry in particular, the efficiency and sustainability of the supply chain is often one of the most time-consuming and difficult hurdles to face. Making sure your logistics processes – including transportation, distribution channels and other aspects of moving products from one place to another – are as efficient as possible can positively improve relations with customers and significantly impact the bottom line.
Let’s take a look at a few important ways sustainability measures can affect the supply chain and business itself from a logistics standpoint and see how products from Inspirage can help:
1. Improve customer relations
Now more than ever, consumers care about where their products are from and how they get from point A to point B. A recent study found that consumers are, in fact, willing to pay around 5 percent more for items delivered sustainably, and about 76 percent said they would wait an extra day for delivery, according to Logistics Management. However, the same study discovered that despite clear indications they should implement sustainable practices, companies across the board are not doing so as quickly as the majority of consumers would want.
By proving to customers that you are focused on making the supply chain as sustainable as possible, your company’s reputation can get a boost. By being one of the 36 percent of companies that, according to the study, intend to incorporate sustainability practices in transportation and distribution, your business can position itself better in customers’ eyes.
2. Reduce supply chain complexity
Taking a look at what points in the supply chain offer the most sustainability challenges is one of the first steps to improving efficiency and, in the long run, reducing the amount of complexity.
For instance, according to GreenBiz contributors Jessica Wollmuth and Velislava Ivanova, by taking a thorough inventory of suppliers and prioritizing efficiency efforts, New Balance Athletic Shoe Inc. cut back the number of suppliers in its supply chain by approximately 65 percent. The company rated each of its suppliers based on sustainability criteria, and the ones that didn’t make the grade were nixed from the chain.
A less complex supply chain translates to better bottom lines, among other key benefits. Reducing suppliers based on sustainability criteria has the potential to minimize supply chain complexities, but it’s also important to note that sustainability itself comes with cost-cutting benefits even if the supply chain remains as complex as before.
Reducing suppliers based on sustainability criteria can make managers’ lives easier.3. Shape the future of the business
Efficiency in logistics does not just impact the way companies are perceived or reduce complexities in the supply chain. As environmental factors become more of a consideration and more standards for compliance are released, companies will want to be on the winning side of history. For instance, sustainable logistics continue to be profitable, according to The Guardian.
The future of your organization and the industry itself depends on how well you adapt to changing business climates. Much of this future, according to Peter Senge, faculty member at the Massachusetts Institute of Technology’s Sloan School of Management, will be shaped by employees themselves.
“To confront these issues practically, you need employees who are innovative – who have the skill and the vision to redesign products, processes, and business models – and who understand the business context,” Senge said in an interview with The Harvard Business Review.
With Integrated Supply and Transportation Planning solutions from Inspirage, your company can rest assured that the logistics part of your supply chain is sustainable as possible. These solutions leverage Oracle’s Transportation Management and Global Trade Management products to help companies reduce risks and improve compliance with sustainability goals across the industry. Contact Inspirage today to learn more.
