With all eyes on the COP26 summit in Glasgow, it’s clear that there is an urgent and pressing need for corporations to accelerate their sustainability efforts. Business leaders have a big responsibility, and supply chain management is one of the most critical areas to address. In this post, we’ll look at how supply chain planning and optimization technology can support this crucial effort.
Different ways to improve
Many of our customers have significantly increased their focus on sustainability compared to just five years ago. Measures range from new sales and distribution models to environmentally conscious sourcing strategies, reuse of by-products and innovative ways to extend the lifespan of products. All of these initiatives have a direct impact on how supply chains operate.
It’s particularly encouraging that these companies are not just thinking about stand-alone initiatives to become greener. Instead, they are also looking at ways to incorporate their sustainability efforts into their core business models.
Sustainability and the role of supply chain optimization
Better planning is central to reducing energy and material usage, transports and waste. By optimizing the supply chain, companies can reduce the environmental costs of fulfilling customer demand.
While this is a good start, we can’t rely on better planning alone to deliver the shift that’s needed to address the broader climate issue.
Instead, companies must incorporate environmental considerations into their core business models and supply chain management strategies, adding green business goals alongside existing profitability and customer service targets.
However, introducing new goals increases the complexity of the planning problem. For example, incorporating product repair and refurbishment, parts harvesting, and waste management requires companies to transition from linear to circular supply chains.