Greening the supply chain: How to build a sustainable business

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In the era of heightened environmental consciousness, the shift towards a green supply chain has emerged as a vital component across numerous industries. As sustainable business practices become the new normal, the impact of green supply chain management is more pertinent than ever. In this article, we dive into green supply chain management and explore how your business can reduce its environmental footprint.

But first, what is green supply chain management?

Green supply chain management (GSCM) refers to integrating environmentally friendly thinking and practices into the traditional supply chain management process. Your existing supply chain is likely to include the following stages:

  • Procurement: This involves sourcing and purchasing the raw materials or components needed for product manufacturing. 
  • Manufacturing and production: Once the raw materials are procured, they go through various processes to transform them into the final product. This stage includes activities like design, production, testing, and quality control.
  • Logistics: After manufacturing, the products are stored in warehouses until needed. 
  • Distribution: The finished goods are transported from the storage facilities to retailers or consumers. This involves managing order fulfilment, overseas shipping, and often customer service. 
  • Returns and waste management: The final stage involves dealing with product returns, managing warranties, and disposing of or recycling waste generated throughout the supply chain.

While these stages are typically optimised for cost-effectiveness and operational efficiency, this approach often overlooks the potential environmental impact. GSCM thus requires you to access and alter current supply chain processes, focusing on reducing waste, emissions, and energy usage while improving resource efficiency. 

The result is an end-to-end process that is not just efficient and cost-effective, but also minimises the environmental footprint of your business.

Understanding your supply chain

For a smooth transition to greener operations, the first step is to fully understand the dynamics of your current supply chain management process. An effective tool for this is a supply chain audit, an X-ray of your business operations that evaluates each stage: from sourcing raw materials, to manufacturing, and finally, product distribution and waste management. 

Crucial for identifying greener opportunities, this audit reveals each stage's environmental toll and underlines immediate and long-term improvement areas. For example, it might expose high-energy consumption in manufacturing or abundant waste in packaging, insights that can steer your green supply chain strategy to address the largest contributors to your environmental footprint.

Key strategies for greening the supply chain

Once you've thoroughly audited your supply chain, the next step is to implement sustainable supply chain practices. Here's a list of supply chain strategies your business can consider:

Strategy 1: Eco-friendly sourcing

Creating a truly eco-friendly business begins at the source. You can reduce your environmental impact by actively finding and selecting suppliers who place a premium on sustainability. Seek out partners who align with your green vision and can provide tangible examples of their own sustainable supply chain practices.

When selecting suppliers, consider those with recognised sustainable business certifications. These could include:

  • Rainforest Alliance Certified: This seal is awarded to farms, forests, and tourism enterprises that meet comprehensive standards designed to protect the environment, promote the rights and wellbeing of workers, and support the welfare of local communities. It assures that products have been sourced from or made in places where people and nature thrive in harmony.
  • Forest Stewardship Council (FSC) Certification: Products with FSC certification are guaranteed to originate from forests that are managed responsibly, providing environmental, economic, and social advantages. The FSC sets forth principles and criteria that serve as the foundation for all forest management standards worldwide. 
  • The Global Organic Textile Standard (GOTS): This leading textile processing standard for organic fibres worldwide ensures all stages from processing, manufacturing, to packaging, labelling, trading, and distribution of textiles contain a minimum of 70% certified organic natural fibres.
  • STANDARD 100 by OEKO-TEXÒ: This is one of the world's best-known labels for textiles tested for harmful substances. It stands for customer confidence and high product safety. Suppose a textile article carries the STANDARD 100 label. In that case, you can be certain that every part of the item, including every thread, button, and other accessories, has undergone testing for harmful substances, confirming its safety from a human ecology standpoint.
  • Leaping Bunny: Recognised globally, the Leaping Bunny logo is a pledge to consumers that the development of any product showcasing it has refrained from new animal testing. The programme guarantees no new animal testing occurs at any stage of product creation, be it by the company, its labs, or suppliers.

Aligning with suppliers that hold these certifications can significantly contribute to your company's eco-friendly sourcing strategy and build a more robust and credible green supply chain.

Strategy 2: Efficient logistics

Another effective strategy involves optimising logistics for greater efficiency. By reducing emissions and waste in transportation and distribution, you can play a significant part in curbing environmental damage. There are numerous green logistics examples to be inspired by, such as companies that leverage renewable energy sources for transport or utilise carbon offset programs to decrease carbon footprint. 

At DHL Express, we are no strangers to these practices. Our GoGreen initiative aims to reduce all logistics-related emissions to zero by 2050. Key strategies include increasing the use of sustainable aviation fuels, designing new buildings to be carbon-neutral, and electrifying 60% of last-mile deliveries, leading to over 80,000 e-vehicles on the road. 

Therefore, efficient logistics isn't just about reducing costs and increasing speed; it's about creating a logistics system that works in harmony with the environment. By following such practices, you can make a meaningful contribution to a more sustainable future.

Strategy 3: Waste reduction and recycling

Minimising waste is another cornerstone of green supply chain management. This strategy involves two key elements: reducing the amount of waste produced by operations, and recycling wherever possible. Businesses aiming to become more sustainable need to tackle waste from a twofold perspective.

For starters, efforts should be made to minimise the production of waste across your business operations. This requires a thorough assessment of the current processes to identify where waste is being generated and how it can be reduced. For instance, are there more efficient manufacturing processes that could be used? Could you improve your inventory management to reduce wastage from expired or obsolete stock? Are there opportunities to reduce office waste, such as by going paperless?

Next, aim to recycle as much of the waste you produce as possible. This might involve setting up dedicated recycling programs, investing in equipment that can recycle waste on-site, or partnering with external agencies that can help dispose of or recycle your waste responsibly.

Moreover, educating employees about waste reduction and recycling can significantly contribute to these initiatives' success. From implementing proper waste sorting and recycling practices to promoting an environment-conscious mindset in daily operations, employees play a vital role in driving your company's sustainability goals. By incorporating these strategies into your supply chain management process, you can ensure that your operations are as lean and efficient as they are green.

Strategy 4: Green packaging

Further to this, consider switching to green packaging. They could be recyclable, biodegradable, compostable, or made from renewable resources. For instance, bioplastics derived from plant sources are a sustainable alternative to traditional petroleum-based plastics. Other sustainable packaging materials might include recycled paper, cardboard, or even innovative materials like mushroom-based packaging.

Beyond choosing eco-friendly materials, it's also essential to consider the volume of packaging used. Excessive or unnecessary packaging is a significant contributor to waste, so businesses should strive to use only as much packaging as is needed to protect and preserve their products. Minimalist packaging designs that optimise material use can be a creative and effective way to reduce packaging waste.

Moreover, it's worth factoring in how the packaging can be reused or recycled. Designing packaging with a second life in mind can greatly extend its lifecycle and prevent it from ending in landfills. For instance, a package might be designed to convert into a reusable shopping bag, or a box might be sturdy enough to be reused for storage. 

The impact of green supply chain practices

By embracing the concept of a green supply chain, you can make substantial strides towards becoming a more sustainable business. Not only will these practices help in preserving our planet, but they can also potentially lead to cost savings, improved customer loyalty, and an enhanced brand image.

At DHL Express, we are committed to embodying and promoting sustainable practices across our operations, from local deliveries to international shipping. Together, let's make greening the supply chain not just a trend, but a standard for all operations worldwide. Explore the possibilities by opening a DHL Express business account today.