Going green is often presented as a purely altruistic exercise – being kind to small furry creatures, saving the planet for future generations and so on.
However, there are more selfish benefits from adopting a sustainable approach to the supply chain, according to a new study by the Global Commerce Initiative and Capgemini. The study, entitled “Future Supply Chain 2016: Serving Consumers in a Sustainable Way”, says that the consumer goods industry’s supply chain strategy should give priority to new parameters.
And it presents a new integrated supply chain model that takes into account sustainability parameters such as CO2 emissions reduction, reduced energy consumption, better traceability and reduced traffic congestion, as well as traditional measures like on-shelf availability, cost reduction and financial performance.
The study found that the total potential impact of this supply chain redesign is significant, including reduction in transport costs per pallet, reduction of handling costs per pallet, reduction of lead time, lower CO2 emissions per pallet and improved on-shelf availability.
What makes this study particularly significant is the support from the industry – 24 market leaders including Black & Decker, Carrefour, Colgate-Palmolive, GlaxoSmithKline, Danone, Johnson & Johnson, Kellogg, Metro, Nestlé, Philips, Procter & Gamble, Reckitt Benckiser, Unilever and Wal-Mart.
“There is a real need for breakthrough change, as the past does not reflect the future the industry will face,” says AG Lafley, co-chairman of GCI and chairman, president and chief executive of The Procter & Gamble Company. “The future supply chain report makes a strong case for change by identifying the innovation that currently exists in the form of new solutions, leading practices, example supply chains and new ways to calculate the impact of the new parameters on the supply chain.”
The study has identified seven areas of innovation: in-store logistics, collaborative physical logistics, reverse logistics, demand fluctuation management, identification and labelling, efficient assets, and joint scorecard and business plan. It says that a big impact on the new sustainability parameters can be made when the following concepts are merged and implemented: information sharing, collaborative warehousing, collaborative city distribution and collaborative non-urban distribution.
Collaboration is, of course, a problematic issue in its own right. It is often talked about, but examples of successful supply chain collaboration between major competitors are hard to find.
With pressure mounting to move to more sustainable models of working, perhaps we are moving towards an acceptance that greater collaboration in the supply chain is the best way forward.
