Sustainability refers to the ability of growth and development without compromising the achievability of potential future needs. Therefore, with the increase in globalization and increasing consumer demand, industries are mainly focusing on incorporating sustainability into supply chain operations of their business models. Additionally, supply chain management (SCM) of a company plans and controls the flow of the goods from raw material to the time it reaches in the hands of the consumer. However, recently many of the industries have started realizing how supply chain levels are affecting ecological balance in the environment. Many companies are now adopting green logistics in their SCM. This helps them to reduce the source of waste and pollution without immolating the quality, performance, and service of the company.
Embodying environmental regulations in all logistical operations in SCM is very important. Sustainable growth only minimizes ecological damage but also assures the overall economic growth and profit of the company. Therefore, adopting green label can become a competitive advantage in itself by producing environmentally friendly products, processes, and technologies.
Challenges in sustainable logistics:
- Increase in globalization resulting in more demand and supply goods.
- More demand and supply leads to increased transportation and distribution of goods.
- E-business has increased the business interface and mass customization
- Free trade policies have led to higher business dynamics and shorter business cycles of the products.
These challenges are the result of increasing complexity in the supply chain governance and sustainable development. Therefore, this is an alarming situation to adopt sustainable technology into our logistics system. Altogether, more sustainable SCM operations are needed to reduce the impact of climate change, land degradation, food adulteration, deforestation, water scarcity and crop failure, etc.
Different sustainability levels are divided into three tiers:
First, Getting the fundamental right: The move towards the first level of sustainability follows the use of necessary sustainable policies. These include daily activities such as switching off the power supply (lights, fans, computers, etc.) when not in application, using eco-friendly travel methods, recycling paper, and plastic, etc.
Second, Learning to think sustainably: aims to embed sustainability into logistics such that the impact of manufacturing, product designing distribution can be made greener and less harmful towards the environment.
Third, The scheme of sustainability: involves the government regulation and auditing of the policies followed by the companies. Assessing the plan for implementing long-term sustainability and growth over time is a significant push for companies to adopt these plans.
Since 2008, Google has become carbon neutral, and by now they are using 100% renewable energy at their offices and data centers. Another example is from Facebook, where they have built sustainable workplaces, engineer-efficient and work efficient data centers, use of clean and renewable energy to support all possible operations.
Walmart started its sustainable move in 2009, by sending surveys to its 100,000 suppliers. In these surveys they asked “Have you measured your corporate greenhouse gas emissions?” and “Have you set publicly available waste reduction targets?”. Further, Walmart set their goal to achieve 100 % renewable energy usage and zero waste and sell products that support people and environment. Besides, they also plan to increase the sales of locally grown produce which will help in reducing the effect of the supply chain on the environment.
Other Sustainability Issues:
Other sustainability issues such as slavery, human trafficking, use of antibiotics, treatment of workers, reduced farm space, etc. need to be taken care to improve the sustainability efforts. With the shift in consumer demand towards organic, fresh and unprocessed foods; processed foods have further raised the concern about sustainability. So, it just does not depend on soil health but also on surface or groundwater.
Lack of efficient food logistics in packaging industry causes a significant amount of food waste. As various types of packaging material are created and wasted during supply chain. These waste should be handled appropriately and replaced with eco-friendly and sustainable packaging materials. By replacing its primary and secondary packaging, beverage company saved $500,000 per year.
In the absence of sustainable methods of climate change, water scarcity, rising temperatures tend to have the significant effect on crop yields. In a case study by Sgarbossa and Russo, 2017, on Closed loop supply chain model to recover meat processing waste. They built a new sustainable model from the proﬁtability index, an energy self-sufﬁciency parameter, payback time and simple qualitative evaluation. Overall, these parameters helped in reducing the environmental impact globally. Along with, ecological impact, they also studied the social impact by introducing highly skilled professionals at different levels of the organization.
Vietnam coffee production
Vietnam is the second largest exporter of coffee in the world providing livelihood to a large number of people. But the traditional farming method is leading to deforestation, soil erosion, drought, erratic rainfall, and biodiversity loss, etc. These activities now alarm for the use of sustainable farming techniques. Therefore, many farmers of Buon Me Thuot City, Daklak, Vietnam are getting themselves certified with Sustainable Coffee Program. In this case study, they found that certified farmers were getting high purchase price and tend to grow shade trees to prevent soil erosion. Accredited farmers also used fewer pesticides and were able to sell their coffee directly to manufacturing companies. They were also given free machinery for processing purpose of reducing the supply chain links and making it more sustainable.
Various solutions which can be taken into consideration while tackling with sustainability issues are:
- Increasing awareness
- Introduction of closed-loop supply chain
- Designing eco-friendly supply chain
- Energy efficient supply chain
- Evaluation and auditing of sustainable measurements
Many food regulation standards such as Food Marketing Institute, Food Waste Reduction Alliance, National Restaurant Association have come forward to cut down the food wastage. Furthermore, they released a guide for manufacturers, retailers, and restaurants on how to reduce food waste. Besides US Environmental Protection Agency (EPA), Green Chill Partnership program tends to minimize emissions and reduced impact on climate change and the ozone layer.
For example, ConAgra Foods Inc. has reduced its pudding waste by producing mixed-flavor pudding from differently flavored pudding leftovers. Also, the company donates that pudding to hunger organizations and provides food to needy people and reduces manufacturing loss.
Another instance is of the Menomonee Falls store which is USA’s greenest supermarket as it utilizes Transcritical CO2 refrigeration system.
By 2050, General Mills have also committed to reducing GHG emissions by 28 % in its supply chain. Likewise, Unilever is helping their farmers to have increased production and yields by adopting good Agricultural practices. This practice will not only improve farmer’s income and livelihood but also assist in achieving food security.
- Smith, B. G. (2008). Developing sustainable food supply chains. Philosophical Transactions of the Royal Society B: Biological Sciences, 363(1492), 849-861.
- Zhu, Z., Chu, F., Dolgui, A., Chu, C., Zhou, W., & Piramuthu, S. (2018). Recent advances and opportunities in sustainable food supply chain: a model-oriented review. International Journal of Production Research, 1-23.
- Sgarbossa, F., & Russo, I. (2017). A proactive model in sustainable food supply chain: Insight from a case study. International Journal of Production Economics, 183, 596-606.
- Validi, S., Bhattacharya, A., & Byrne, P. J. (2014). A case analysis of a sustainable food supply chain distribution system—A multi-objective approach. International Journal of Production Economics, 152, 71-87.
- Nguyen, G. N., & Sarker, T. (2018). Sustainable coffee supply chain management: a case study in Buon Me Thuot City, Daklak, Vietnam.International Journal of Corporate Social Responsibility, 3(1), 1.