Four Rules of Thumb for Achieving ROI with Sustainable Supply Chains

By Bruce Myers | Director, Chainalytics |  Chainalytics’ clients face all kinds of supply chain challenges. But often, we find, clients who are seeking to...

By Bruce Myers | Director, Chainalytics | 

Chainalytics’ clients face all kinds of supply chain challenges. But often, we find, clients who are seeking to achieve ROI on their supply chain sustainability initiatives are best served by kicking off the initiative with some surprisingly simple concepts and proactive steps:

  1. Listen to Your Clients. It’s an old supply chain maxim, but it bears repeating: Start by asking your clients, “Where can we add value for you?” With their feedback in hand, you can map their preferences to your business and culture, locate the prime opportunities throughout your organization to help you become more efficient, and add value to your sustainability initiative’s results.
  2. Ship Less Air, Damage Less Product, Save More Money. Balancing damage and returns trade-offs with packaging optimization lets you minimize waste and create more efficient, more “transportation friendly” packaging and supply chains. For example, Chainalytics’ prepared food packaging project for WalMart U.S.:
  • identified $600,000 in cost savings
  • resulted in 133 fewer truckloads per year
  • reduced miles traveled by 66,500
  • decreased transit costs by $133,000
  • increased area efficiency by 8 percent
  • increased truckload density by 3 percent

The bottom line? Wal-Mart realized a 100 ton reduction in CO2, 2,920 trees saved and over 146 tons of paperboard and corrugate eliminated.

  1. Green Your Supply Chain Network. Modeling your network to reduce transportation distances, improve fuel mileage and optimize freight movements means you’re already reducing fuel and carbon emissions. Moving most of your products by truck? In Australia an average truckload shipment running for 800 kilometers carrying 22 tonne uses 320 litres of diesel and produces 1.76 tonne of CO2 for the trip (using a Euro 6 diesel engine and a single trailer). By simply using a more-efficient mode for your freight type, you can support a solid supply chain sustainability initiative. In addition, co-shipping opportunities—sharing space on a truck—can offer “transportation economies of scale” and reduce your costs and green your supply chain.
  2. Consider Your Warehousing, Supply Chain Planning, and Reverse Logistics Operations. Improving operations inside your four walls to minimize flow paths automatically improves productivity, lowers manpower costs and supports a greener supply chain through lower handling-related damage costs. Likewise, an orchestrated demand planning approach shared among all your company’s departments not only reduces excess or expiring inventory, it also frees up working capital for better use, like business growth. Lastly, a solid reverse logistics program is especially imperative for supply chains like retail, where product cycles through the omni-channel at a frenetic rate, putting pressure on organizations to develop sophisticated returns processes to meet customer demand.

Please keep an eye on the Chainalytics blog for more insights into supply chain savings and optimization.

Bruce Myers leads Chainalytics’ Asia-Pacific team of professional supply chain consultants and analysts dedicated to providing successful outcomes for clients. Bruce has worked with many of Asia-Pacific’s leading organizations in the automotive, aviation, healthcare, consumer, energy, and mining sectors over the last two decades.

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