Branding Sustainability in Your Supply Chain Operations

It is estimated that 80% of global trade passes through supply chains. In addition, McKinsey reports that a consumer company’s supply chain accounts for 80% of its greenhouse-gas emissions and more than 90% of the environmental impact. Therefore, building a sustainable supply chain is a top priority for many enterprises today. 

According to MIT’s 2022 State of Supply Chain Sustainability Report, supply chain sustainability encompasses the management of both environmental and social impacts within and across the supply chain. 

This includes the operations conducted by suppliers, manufacturers, distributors, and customers. Because supply chain sustainability deals with both operations and the environment, it’s impossible to advance on one front without the other.

Read on to better understand how efforts toward both sides of supply chain sustainability have a compounding impact on the long-term health and profitability of a company.


Efficiency is an Operational and Eco Win

Supply chain sustainability begins with efficiency. By uncovering inefficiencies in the supply chain, companies can work to reduce unnecessary use of time, energy, and resources. 

Examples of company initiatives include reduced transportation through route optimization, providing more efficient or eco-friendly packaging, and addressing operational bottlenecks or issues.

The key is to have the right tech stack.

For instance, if a company employs the appropriate freight bill audit system, it becomes easier to identify opportunities to drive efficiency through the collection and analysis of data contained on freight invoices

The Trax freight audit and payment software gives companies end-to-end visibility into freight costs. By analyzing the data across all business operations, supply chain leaders reveal ways to maximize trade routing, decrease carbon emissions, and predict future transportation costs. 

The more data a company collects and analyzes, the greater the chance of uncovering opportunities to capitalize on operational and environmental wins. 

Consider the following areas of focus:

Order Fulfillment: Implementing intelligent order fulfillment backed by digital supply chain management shortens the supply chain and lowers emissions. By leveraging AI and IoT, enterprises have the chance to reduce waste and energy use and will also cut costs.

Cloud-Based Computing: Companies can significantly improve energy efficiency and carbon efficiency by moving from on-premises infrastructure to the cloud. According to Microsoft, cloud-based solutions can boost energy and carbon efficiency by up to over 90%.

Advanced Data Analytics: Once an issue is identified related to sustainability, the data is what illuminates the root cause. Supply chain efficiency relies on advanced data analytics, including descriptive, diagnostic, predictive, and prescriptive analytics.

Tracking Saves Money & the Environment

Despite the emphasis on supply chain sustainability, the CDP estimates that only 1 in 40 suppliers has approved scientific, quantifiable targets for their sustainability efforts. The few companies that are successfully making an impact on the environment are those leveraging data-driven tracking.

The digital revolution in the supply chain has lagged compared to that of other industries, but as a global imperative issued for ESG moves forward, supply chain leaders must implement the appropriate tech-based tools. 

According to Forbes, the main focus for high-tech supply chains is tracking CO2 emissions. The goal is to solidify an auditable data pipeline to ensure regulatory compliance and avoid penalties. 

Trax’s proprietary Carbon Emissions Manager enables supply chain companies to meet energy efficiency regulations. This is made possible by connecting the tracking of actual greenhouse gas emissions with freight audit and payment (FAP) solutions, ultimately elevating decision-making around cost, performance, and sustainability within transportation.

Get defensible and reliable emissions data from your transportation data. Download the Trax Carbon Emissions Manager fact sheet to learn more.

Public Perception is Itself a Currency

There are two major sources of end-user discontent in the supply chain - delays and public eco fails - both of which diminish consumer trust and hurt the overall business. Fortunately, both issues can be addressed as companies work toward their sustainability goals. 

In a c-suite study conducted by IBM, nearly half of consumers reported paying a premium for products that were branded as sustainable/socially responsible in the past year. Furthermore, over 50% of consumers say they are willing to change their buying habits to help the environment, which allows supply chain leaders to expand their markets.

Collaboration is Key

The State of Supply Chain Sustainability (SCS) 2022 report by MIT refers to the “staircase” of SCS practices. When asked which of the following practices firms have in place to manage SCS, results demonstrated that most were willing to conduct audits, expand their code of conduct, and employ advanced information technologies (26-46%). However, willingness dipped when it came to collaboration with NGO or third parties, with only 12% following this practice.

This is a detriment to supply chain leaders because collaboration among partners is necessary to understand the full end-to-end environmental impact of supply chain work. To make progress in operational efficiencies as well as environmental sustainability, companies must rely on collaborations. 

Tips for improving collaboration include digitizing as much as possible and proactively communicating ESG plans. Because carriers will inevitably be impacted by a supplier’s sustainability efforts, it’s crucial to have them as an ally in the process by continuously keeping them in the loop with advances or setbacks.

The Dual Impact of Sustainability in Supply Chain Operations

Supply chain sustainability efforts impact not only the environment but also supply chain operations. 

Whether a company implements cloud computing, advanced analytics, or faster order fulfillment, tackling operational inefficiencies can enable a more positive environmental impact. 

The key to making changes is knowing the current status of a supply chain, which means tracking carbon emissions is more important than ever. 

Advanced technology like Trax’s Carbon Emission Manager offers supply chain leaders the opportunity to gain control of their sustainability initiatives by integrating carbon emission tracking with their freight audit and billing solution. 

To learn more about how Trax delivers data-based visibility and insights, higher savings, better control of transportation spending, and supply chain sustainability, contact us today.

Trax Technologies

Trax Technologies

Trax is the global leader in Transportation Spend Management solutions. We partner with the most global and complex brands to drive meaningful optimizations and savings through industry-leading technology solutions and world-class advisory services. With the largest global footprint spanning North America, Latin America, Asia, and Europe, we enable our clients to have greater control over their transportation performance and spend. Our focus is on your success.