What is a Sustainable Supply Chain & How to Achieve It?

Sustainable supply chain management has become a critical aspect of modern business practices. Especially in light of recent findings from an audit of Australian supermarkets regarding plastic packaging. This blog explores the principles of sustainable supply chains, with insights from Dr. Tillmann Boehme, an expert in circular economies, Associate Professor at University of Wollongong (UOW) and a faculty member at AcademyGlobal.

 

Defining a Sustainable Supply Chain

A sustainable supply chain places a dual emphasis not only on efficiency and profitability, but also considers broader responsibilities to the environment and society. It operates with a commitment to reducing carbon and ecological footprints and making positive social contributions.

Two key practices that underscore this commitment are the circular economy and reverse logistics.

  • The circular economy is a transformative approach that emphasises the cyclic use of resources. In this system, materials are reused and recycled instead of being discarded after their initial purpose. This minimises waste, conserves resources, and reduces the environmental impact associated with resource extraction and disposal.
  • In contrast, reverse logistics focuses on what happens to products and materials after they’ve served their primary function. It involves the responsible handling, recovery, and recycling of items at the end of their primary life cycle. This may not only extend the useful life of a product but might also ensure that they are disposed of (or repurposed) in an environmentally friendly manner.

By adopting these practices, companies demonstrate their commitment to reducing their carbon footprint, conserve resources, and contribute positively to the communities in which they operate.

Case Study: Australian Supermarkets and Plastic Packaging

A recent ABC article highlights concerns that all supermarkets are falling short of national targets for reducing plastic use.

The audit, released by Australian Marine Conservation Society (AMCS) and Boomerang Alliance, found that soft plastics, food packaging and beverage litter accounts for nearly 70% of all plastics found by Clean Up Australia.

Dr. Boehme, a University of Wollongong Professor and AcademyGlobal Faculty Member, finds the report’s findings “disturbing yet unsurprising”. He highlights the onus is on supermarkets to use their power in the supply chain to implement biodegradable substitutes.

One of the reasons supermarkets are failing to meet their targets is that plastic-wrapped produce is often cheaper than loose items, motivating consumers to buy the plastic alternative. Dr Boehme pointed out that these extra costs for loose items lead back to inefficiencies in logistics and shipping as more effort and handling is required for individually sold goods.

ABC also emphasises the importance of transparent reporting and actions by supermarkets to align with sustainable packaging goals set for 2025.

Principles in Action: The Role of Supermarkets

ALDI’s commitment to making 100 percent of their packaging recyclable, reusable, or compostable by 2025 signifies a substantial stride toward realising a sustainable and environmentally conscious supply chain. Their current standing at 83 percent in recyclable, reusable, or compostable packaging showcases a clear and transparent approach to tracking their progress.

In the broader context, transparency emerges as a fundamental element in the pursuit of supply chain sustainability goals. By openly sharing their sustainability efforts and achievements, companies can foster trust among consumers and stakeholders. This trust not only bolsters their brand but also encourages others in the industry to follow suit.

Moreover, transparency promotes a culture of continuous improvement within organisations. When supply chain practices are laid bare for scrutiny, companies are motivated to identify areas for enhancement and work towards more eco-friendly solutions. Additionally, it holds suppliers accountable for adhering to sustainable practices, ensuring that every link in the supply chain is aligned with responsible environmental and social standards.

While Coles and Woolworths are also making strides in sustainable practices, the challenges they face highlight the importance of ongoing transparency in their journey toward achieving supply chain sustainability goals.

Challenges in Achieving a Sustainable Supply Chain

Issues like the cost of plastic-wrapped versus loose produce illustrate the complex nature of supply chain decisions and their environmental impact. As Dr. Boehme points out, part of the problem comes from how goods are moved and shipped, which can make some choices less eco-friendly or more costly. Therefore in the context of supermarkets, creating a sustainable supply chain doesn’t just involve making better packaging choices, but also making shipping and handling more efficient.

5 Strategies for Sustainable Supply Chains:

Companies can best achieve a sustainable supply chain through a combination of strategies and initiatives:

Implementing Green Procurement Policies

Green procurement policies that prioritise the purchase of eco-friendly and ethically sourced materials, involves selecting suppliers who adhere to environmental standards and practice responsible sourcing. Through green procurement practices, companies can reduce their carbon footprint and encourage a ripple effect of sustainability throughout their supply chain.

Enhancing Supply Chain Transparency

Transparency is crucial for a sustainable supply chain. Greater visibility into supply chain operations allows a company to monitor and manage the environmental and social impacts of their activities. Emerging technologies including blockchain and IoT (Internet of Things), provide real-time data on the supply chain processes, helping to identify areas for improvement and ensure compliance with sustainability standards.

Adopting Circular Economy Principles

Embracing the principles of a circular economy involves redesigning products and processes to minimise waste and make the most of resources. This strategy focuses on extending the lifecycle of products through better design, encouraging reuse and recycling, and promoting the use of renewable resources. By integrating circular economy principles, companies can significantly reduce their environmental impact and create a more sustainable supply chain.

Collaborative Partnerships for Sustainable Innovation

Building partnerships with other companies, NGOs, government bodies, and even competitors, can lead to innovative solutions for sustainability challenges. Collaborative efforts can result in shared resources and knowledge, leading to more effective and efficient sustainable practices. These partnerships can also help in advocating for industry-wide changes and setting new standards for sustainability.

Educating the entire supply chain with specialised training

A pivotal strategy in building a sustainable supply chain is the education and training of every participant, from suppliers to retailers. To this end, specialised seminars and online courses such as those offered by AcademyGlobal in partnership with CILT International can play a critical role.

Through case studies, education programs can impart practical knowledge on sustainable practices across the supply chain. They can also foster networks, innovation and encourage suppliers to explore new technologies, processes, and materials.

Incorporating these strategies requires a committed effort from all stakeholders in the supply chain. By collectively working towards these goals, companies can build a more innovative, resilient, efficient, and sustainable supply chain, contributing positively to the environment and society.

Conclusion

Sustainable supply chain management is increasingly important in the contemporary business landscape. It goes beyond traditional cost and efficiency considerations, addressing environmental and social responsibilities head-on.

Dr. Boehme, a recognised expert in this field, has made substantial contributions through his academic position at the University Of Wollongong (UOW) and also as Faculty member at AcademyGlobal. His work underscores the importance of adopting eco-friendly and socially responsible practices, and in helping companies contribute to a circular economy through more efficient and resilient supply chain operations.

By Emma Heighway, Assistant Project Manager, AcademyGlobal

References

Australian Marine Conservation Society. (2018). Australian Marine Conservation Society-AMCS. Australian Marine Conservation Society. https://www.marineconservation.org.au/

Boomerang Alliance. (n.d.). Boomerang Alliance. https://www.boomerangalliance.org.au/

KPMG. (2023). Now more than ever you need a smarter more resilient supply chain [Review of Now more than ever you need a smarter more resilient supply chain]. KPMG; KPMG Powered Enterprise Supply Chain. https://kpmg.com/au/en/home/services/advisory/management-consulting/technology/kpmg-powered-enterprise/supply-chain-management/supply-chain-campaign.html?utm_medium=cpc&utm_source=ggl-nbrand&utm_campaign=1187202380&gad_source=1&gclid=Cj0KCQiAgqGrBhDtARIsAM5s0_lHh_lSTkMAHn3lhg3qQN5cCF
k5TB7_jSlgcn82-QDXWY0HL7SAASQaAvoWEALw_wcB

Our soft plastic problem – explained. (2022, November 13). Www.cleanup.org.au. https://www.cleanup.org.au/soft-plastics-recycling-halted

Sustainable and Responsible Supply Chain | Deloitte Global. (n.d.). Www.deloitte.com. https://www.deloitte.com/global/en/about/governance/global-impact-report/sustainable-and-responsible-supply-chain.html

Sustainable supply chains The vital role of sourcing and procurement. (n.d.). https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/strategy/ca-sustainable-supply-chains-sourcing-and-procurement-pov-aoda.pdf

The top supermarket in Australia reducing plastics waste revealed in new report. (2023, November 8). ABC News. https://www.abc.net.au/news/2023-11-09/nsw-report-supermarket-packaging-plastics-aldi-woolworths-coles/103081650

Villena, V. H., & Gioia, D. A. (2020, March). A More Sustainable Supply Chain. Harvard Business Review. https://hbr.org/2020/03/a-more-sustainable-supply-chain

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