MOST Analysis

Mission Statement

Integrating green practices into supply chains is critical in minimizing the environmental impact of the industry and promoting business integrity. The acceleration in online shopping has impacted the dynamics and sustainability of many businesses’ supply chains, particularly as customers are increasingly focusing on environmental factors such as waste, resource use and embedded carbon. Between plastic packaging, carbon emissions and returns headed straight for landfill, the environmental implications of this new way of consuming is a major problem. The pressure is therefore mounting for businesses to implement greener supply chains and address these environmental concerns. If the increased consumer focus on eCommerce continues, there will be ever-greater scrutiny placed upon the carbon footprint of businesses that sell online. Given that the majority of emissions are generated through the supply chain, businesses would be well-served by placing a greater focus in this area. As well as the obvious reputational boost for greener businesses in the eyes of today’s increasingly environmentally-conscious consumer, investing in greener practices can indeed have a tangible impact on an organization’s bottom line.

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Objectives

01. Reverse Logistics: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
02. Ethical Sourcing; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
03. Green Logistics; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
04. Packaging and Waste; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
05. Green Manufacturing and Remanufacturing; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
06. Eco-design of Products; departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
07. Renewable Energy: departmental SWOT analysis; strategy research & development. 1 Month
08. Coordinate with Partners: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
09. Consolidate Shipments: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
10. Empty Miles: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
11. Just-in-Time: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
12. Start Now: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month

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Strategies

01. Reverse Logistics: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
02. Ethical Sourcing: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
03. Green Logistics: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
04. Packaging and Waste: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
05. Green Manufacturing and Remanufacturing: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
06. Eco-design of Products: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
07. Renewable Energy: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
08. Coordinate with Partners: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
09. Consolidate Shipments: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
10. Empty Miles: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
11. Just-inTime: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
12. Start Now: Each individual department head to undertake departmental SWOT analysis; strategy research & development.

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Tasks

01. Create a task on your calendar, to be completed within the next month, to analyze Reverse Logistics.
02. Create a task on your calendar, to be completed within the next month, to analyze Ethical Sourcing.
03. Create a task on your calendar, to be completed within the next month, to analyze Green Logistics.
04. Create a task on your calendar, to be completed within the next month, to analyze Packaging and Waste.
05. Create a task on your calendar, to be completed within the next month, to analyze Green Manufacturing and Remanufacturing.
06. Create a task on your calendar, to be completed within the next month, to analyze Eco-design of Products.
07. Create a task on your calendar, to be completed within the next month, to analyze Renewable Energy.
08. Create a task on your calendar, to be completed within the next month, to analyze Coordinate with Partners.
09. Create a task on your calendar, to be completed within the next month, to analyze Consolidate Sipments.
10. Create a task on your calendar, to be completed within the next month, to analyze Empty Miles.
11. Create a task on your calendar, to be completed within the next month, to analyze Just-in-Time.
12. Create a task on your calendar, to be completed within the next month, to analyze Start Now.

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Introduction

Environmental issues have been expanding and spreading quicker than forest fires from country to region, region to global level territory in recent decades, which is a major contributor to climate change and global warming. Furthermore, natural resource scarcity and air and water pollution have a negative impact on fauna and flora, as well as human health, resulting in diseases such as ischaemic heart disease, lung cancer, chronic obstructive pulmonary disease, stroke, Dracunculiasis, Cholera, Hepatitis, Typhoid fever, and Norovirus. The green supply chain idea is used to reduce environmental deterioration and pollution of air, water, and waste by incorporating green practises into company operations.

Although the underlying premise of the green concept is undeniably to improve environmental sustainability, businesses often use the green concept to “kill two adversaries with one bullet.” Because a green supply chain can reduce pollution and production costs while also spurring economic growth, creating a competitive advantage in terms of higher customer satisfaction, a positive image and reputation, and allowing companies to export their products to countries that are environmentally friendly. Corporate social responsibility, green manufacturing, waste reduction, recycling, and remanufacturing sustainable/environmental friendly supply chain, green supply chain, and so on are all examples of green ideas that are expanding with new innovations and techniques to protect environmental sustainability.

The idea of incorporating sustainable environmental processes within the traditional supply chain is referred to as a sustainable or green supply chain. Processes like as supplier selection and material procurement, product design, product production and assembly, distribution, and end-of-life management are all examples of this. Rather than reducing the negative impact of business and supply chain activities, a green supply chain adds value and/or creates value throughout the entire chain. Green supply chains undeniably reduce air, water, and waste pollution, but green operations also improve enterprises’ performance in terms of less waste manufacturing, reuse and recycling of products, cost savings, asset efficiency, positive image development, and increased customer satisfaction. As an example, Figure 1 depicts a green supply chain for a child’s crib manufacturer.

Green practices in supply chain management

Companies increase their productivity and environmental growth by using several green practises in their company and supply chain activities. The following are some well-known green practises:

3.1 Green material sourcing

Green sourcing refers to the acquisition of materials and components that have enviable ecofriendly properties such as reusability, recyclability, and the absence of toxic or dangerous compounds. Procurement experts have been driven to evaluate their existing sourcing, purchasing strategy, and impact on environmental sustainability as environmental concerns have grown. Recycling and remanufacturing play a role in environmentally conscious shopping. Green sourcing, according to Min and Galle, promotes waste reduction by enhancing recycling, remanufacturing, and other supply chain activities. Carter and Rogers conducted a study to see how green sourcing affects a company’s environmental and financial success.

They came to the conclusion that by successfully implementing a green purchasing strategy, product costs are reduced, and firms’ environmental and financial performance improves, as well as their market reputation. According to Zailani et al., environmentally conscious purchasing has a positive impact on a company’s operational and environmental performance. Design operation management, supply chain management, environmental authentication, ecology, and external environmental management were the five primary features of green purchasing identified by Yang et al. They confirmed that green purchasing boosted the overall performance of the companies. Green purchasing in the supply chain and corporate operations is a proven method for reducing waste, air pollution, and water pollution.

3.2 Green marketing

Green marketing, a broad range of marketing activities (e.g., planning, production, process, price, promotion, and after-sale service) aimed to highlight the goal of an organisation to lessen the detrimental consequences of their products, is directed towards all corporations and consumers. Green marketing encourages people to buy things that are good for the environment. It includes activities that can satisfy human aspirations while having the least amount of harmful impact on the environment’s beauty. Green marketing also improves a company’s competitiveness, financial and environmental performance, as well as its reputation and image.

3.3 Green management

Green management practises (GMP) provide a company with additional sources of data that can help them achieve their economic and environmental goals. Adoption of green management methods benefits a company’s image, efficiency, environmental compliance, cost savings, societal commitment, and carbon emissions reduction, among other things.

3.4 Green distribution and warehousing

Green distribution and warehousing may decrease waste and play a major part in energy conservation. The value addition of green products in warehousing can considerably improve overall performance and improve company image. Green distribution aids businesses in achieving greater financial and environmental results.

3.5 Green manufacturing

Green manufacturing techniques aim to implement socially and ecologically responsible practises in order to reduce the negative consequences of manufacturing while also increasing business profitability. Production processes are more efficient when green techniques are used. This approach entails the use of green resources, which can help businesses gain a competitive advantage by lowering product costs and improving product quality. Both the lean and green manufacturing industries strive to reduce waste and increase the efficiency of manufacturing operations. The advantages of green manufacturing, according to Baines et al., are that green practises in production processes mitigate the negative effects of manufacturing processes on environmental sustainability, and green manufacturing improves a company’s operational, environmental, and financial performance.

3.6 Ecological design

According to Luthra et al., the use of ecological design in supply chain management can control 80 percent of environmental consequences from product and process related issues. Many ideas, such as using cleaner technology processes, green raw materials, and components, are incorporated into ecological design. Green product design decreases a product’s environmental impact over its lifetime. Furthermore, green product design encourages reuse, recycling, and remanufacturing, which not only helps businesses improve their environmental performance but also allows them to save money.

3.7 Green transportation and reverse logistics

Green transportation and reverse logistics practises give businesses the chance to improve their image while lowering costs. Logistics costs can be reduced by improving the efficiency of transportation systems, and customer relationships can be improved to increase profitability. The activity of reverse logistics (reusing, recycling, and remanufacturing), which can produce products that can be used again for clients, is one of the logistics activities combined with rehabilitation. Green logistics enables businesses to reduce their environmental impact while improving quality and lowering costs.

3.8 Renewable energy and biofuels

Without a doubt, global logistical and supply chain operations rely heavily on energy and fossil fuels, which are the primary contributors to climate change, global warming, and pollution due to increased carbon and greenhouse gas emissions. In order to achieve sustainable environmental and economic growth, supply chain operations must use renewable energy and biofuels. Logistics-related activities, according to Anable et al., use more energy to complete their tasks. Renewable energy and biofuels boost business performance while also lowering carbon emissions. Furthermore, fossil fuels are more costly than biofuels and renewable energy sources. Government regulations, together with customer knowledge, put pressure on businesses to adopt biofuels and environmentally friendly energy in their supply chains. Bioenergy reduces carbon emissions while simultaneously improving the profitability of businesses through improved image and reputation.

The most significant aspect for enterprises to integrate green practises in their supply chain operations is cost minimization. The utilisation of reused, recycled, and remanufactured items would help to reduce the prices of packaging, components, and materials if green supply chain activities were implemented. Green practises, according to Khan et al., provide opportunities to capture new markets and export to environmentally friendly countries, whereas polluted firms are unable to export their products to environmentally friendly countries such as the United States, Germany, the United Kingdom, and Poland. Green supply chain management strategies have undeniably been a tool for businesses to reduce product costs, increase profitability, and expand market share. Firms, on the other hand, use green techniques in their corporate activities to improve social performance. Improvement in people’s quality of life without sacrificing environmental beauty is referred to as social performance. Furthermore, social performance encompasses the promotion of a company’s image as well as the enhancement of environmental sustainability and the reduction of environmental dangers.

Firms can improve their operational performance by implementing GSCM methods, such as enhancing product quality and improving delivery service. Green supply chain management initiatives also assist organisations in improving their environmental performance by reducing carbon emissions, eliminating waste from the end-to-end supply chain, and promoting reuse, recycling, and remanufacturing through effective and strong collaboration with suppliers. Integrating an environmental management system (EMS) into a company’s production plan will help the company improve its environmental performance.

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Supply chains are turning to green solutions for the future

Carriers are investing in greener delivery solutions as a result of growing environmental concerns and pressure from the public and regulators…

Climate change has become such a persistent threat to our society and economy that corporations are scrambling to find ways to assist in the greening effort. As shippers set sustainability objectives, Scope 3 emissions, which are the result of indirect emissions that occur throughout a company’s value chain, have gotten a lot of attention. The extended supply chain is frequently the largest source of emissions while also being the most difficult to address.

A recent 2020 report from CPD explored the state of environmental risks in supply chains and what approaches businesses are taking to mitigate them. It found that just “37 per cent of suppliers are taking action and engaging with their own suppliers, down from 39 per cent in 2019.”

More than 1,000 companies are now trying to cut scope 3 emissions, according to CDP, and 94% of organisations with science-based objectives give specifics on how they plan to do so.

FedEx declared that by 2040, it would have converted its entire parcel pickup and delivery operation to “zero-emission electric vehicles.” FedEx CEO Fred Smith attributed the decision to the growing economic viability of sustainable solutions as well as concerns about carbon pollution.

“Our customers are increasingly focused on this issue. They want to do business with transportation providers that are environmentally responsible,” Smith said. “But we also — as a commercial enterprise — have to produce for our shareowners.”

DPD group has announced its intention to provide zero- and low-emission delivery options to 225 of Europe’s major cities. By 2025, DPD group will have reduced its last-mile carbon footprint in the cities targeted by 89 percent and pollutants by 80 percent, compared to 2020. CO2 emissions per parcel have decreased by -14 percent since 2013, and by 2025, they will have decreased by -30 percent.

Carriers across the supply chain are investing in green technologies and numerous approaches to help cut emissions and promote sustainability, from the ocean to the air, the road, and the rail.

Ocean travel

The International Maritime Organization’s sulphur restrictions, known as IMO 2020, went into effect last year, limiting sulphur emissions from ships to 0.5 percent mass by mass, down from 3.5 percent previously.

Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, a global leader in shipping and logistics, announced earlier this year that six LNG (liquefied natural gas) powered containerships would be dedicated to the US market as part of the Group’s ongoing efforts to improve air quality and accelerate the shipping industry’s energy transition.

The carrier’s statistics on LNG are positive: 99 percent less sulphur dioxide, 91 percent less particulate matter, 92 percent less nitrogen oxide, and 20 percent less CO2 than traditional fuels, according to the carrier.

Aviation emissions

Aviation emissions are a substantial contributor to climate change, and using sustainable aviation fuels is one approach to reduce them.

The owner of British Airways has become the first European airline group to pledge to using sustainable jet fuel on 10% of its flights by 2030. IAG said that it will purchase a million tonnes of sustainable aviation fuel every year, allowing it to reduce yearly carbon emissions by two million tonnes by the end of the decade.

In addition, the firm declared that it is the first airline group in the world to extend its net-zero commitment to its supply chain.

Route optimization

The process of establishing the most cost-effective route is known as route optimization, and it may be extremely advantageous to trucking and delivery companies. It can assist in giving accurate ETAs and increasing customer satisfaction. Drivers spend less time travelling on well-planned routes, which saves fuel costs and wear and strain on cars while also increasing time on-site and the number of stops a driver may make in a day. Route optimization can also assist reduce operational costs.

The trucking sector recognises that the supply chain is shifting toward a more sustainable future, which means diesel vehicle alternatives will become available. The most talked-about alternatives are battery-electric vehicles, fuel-cell electric vehicles, and vehicles that run on renewable fuels.

Battery-powered rail

For the first time in the UK, long-distance trains might run on battery power, according to Hitachi Rail. Great Western Railway services between London Paddington and Penzance, Cornwall, might be powered by a mix of batteries, electricity, and fuel, according to the firm. Using battery power at the route’s non-electrified stations will save more than 20% on fuel, improve air quality, and lower noise levels.

Testing is planned to begin in 2022, with Hitachi Rail hoping to build a fully electric intercity train by the late 2040s.

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Green supply chains are key to a more sustainable planet

Green practises must be integrated into supply chains to reduce the industry’s environmental effect and promote corporate integrity…

Customers are increasingly concerned about environmental aspects such as waste, resource use, and embedded carbon, therefore the acceleration of online shopping over lockdown has had an impact on the dynamics and sustainability of many organisations’ supply chains.

The environmental consequences of this new style of consuming are a huge problem, thanks to plastic packaging, carbon emissions, and returns that end up in landfills. As a result, corporations are under increasing pressure to build more sustainable supply chains and address these environmental issues.

The environmental cost of online purchasing

According to data from the IMRG Capgemini Online Retail Index, UK online sales increased by 36.6 percent in 2020 compared to 2019, the biggest increase since 2007. However, the enforced rise of eCommerce has had a severe influence on the environment.

Due to an increase in delivery vans last year, the number of vehicles on UK roads surpassed 40 million for the first time, resulting in an increase in carbon emissions. Not to mention the growing use of cardboard and other packing materials, much of which is non-recyclable and destined for the landfill.

Surprisingly, despite the easing of limitations, the eCommerce boom appears to be here to stay, at least according to first public perception. According to research, buyers have received an average of two extra deliveries per month since March 2020, and more than half of the public now expects to order online at the same volume even until the high street reopens in earnest.

The benefits of a greener supply chain

If the rising consumer focus on eCommerce continues, the carbon footprint of enterprises that sell online will be scrutinised much more. Given that the supply chain generates the bulk of emissions, firms might benefit from a stronger emphasis on this area.

Investing in greener practises can have a concrete influence on an organization’s bottom line, in addition to the obvious reputational boost for greener enterprises in the eyes of today’s increasingly environmentally sensitive consumer. Investing in zero-emission vehicles, for example, is likely to save businesses money in the long term because electric vehicles have lower whole-life expenses. Furthermore, data shows that 85 percent of people prefer to buy from businesses that have a good reputation for sustainability.

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Building a supply chain that is efficient and environmentally sustainable

Greener corporate practises will only become more important as the UK moves closer to its 2050 goal of net zero emissions. As a result, it is critical that firms examine their supply chains now in order to avert potentially major financial and reputational harm in the future. But what are the first actions that firms may take to create a more environmentally friendly supply chain?

Build internal support

Having the necessary foundations in place, which entails first developing the business case for action, is critical to ensuring that greener supply chain initiatives are adopted long-term. This aids in the development of internal support for greener business practises, the assessment of any potential hazards, and the identification of the places where the supply chain has to be made more environmentally friendly.

Be accountable for all emissions throughout the supply chain

Businesses must be more mindful of all pollutants generated across their supply chain. While reporting on Scope 1 and Scope 2 emissions is required by law, there is currently no legal duty to report on all indirect emissions created across the supply chain, known as Scope 3 emissions.

When you consider that Scope 3 emissions can account for the bulk of a company’s carbon footprint, it’s evident that any company aiming for net-zero emissions can’t possibly fulfil their goals without them.

Organizations that pay more attention to their overall carbon footprint, including Scope 3 emissions, can only be viewed as beneficial, resulting in societal environmental advantages.

Establish a supplier code of conduct

Businesses aiming to implement truly sustainable operations should, whenever possible, engage with suppliers who share their values and ambitions. One of the most successful methods for organisations to involve suppliers in their sustainability initiatives is to establish and communicate expectations through a supplier code of conduct.

Identify inefficiencies in your logistics network

Businesses should also examine their logistics network to see if there are any inefficiencies that may be addressed. Companies should assess their present fleet size, vehicle makeup, and geographic spread, as well as the locations of their distribution centres, to identify any inefficiencies or squandered resources.

Supporting businesses in their sustainability journey

Supply chain sustainability is becoming more widely recognised as an important aspect of overall organisational sustainability. According to HSBC, 31% of firms throughout the world plan to make sustainability-related improvements to their supply chains, and seven of the top ten global FMCG companies have carbon emission reduction goals that include assisting suppliers in becoming “green.” The decisions that corporations make in the coming months may have a significant impact on the lives of millions of people in the years ahead.

SCALA has committed to assisting businesses in their sustainability efforts by requiring that all projects completed in 2021 contain a full assessment of how all activity across the supply chain will influence the environment. This keeps environmentally friendly habits front of mind at all times, and we can all work together to make the world a greener place.

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Executive Summary

Chapter 1: Reverse Logistics

What Is Reverse Logistics?

Reverse logistics is a form of supply chain management in which goods are returned from customers to vendors or producers. Reverse logistics is required for activities such as returns and recycling after a client receives a product.

Reverse logistics begins with the end user and works its way backwards through the supply chain to the distributor or from the distributor to the manufacturer. Reverse logistics can also refer to operations in which the end user is responsible for the product’s final disposal, such as recycling, refurbishment, or resale.

When Is Reverse Logistics Used?

When items travel from their final destination back through the supply chain to the seller and maybe back to the suppliers, organisations use reverse logistics. The purpose is to either recover or dispose of the product’s value. Returns are worth about a trillion dollars worldwide each year, and they’ve become more common as ecommerce has grown.

Reverse logistics aims to recoup value while also ensuring repeat business. In-store purchases are returned less than 10% of the time, whereas internet purchases are returned at least 30% of the time. Reverse logistics is used by smart businesses to increase client loyalty and repeat business while reducing return losses.

Reverse Logistics vs. Traditional Logistics

Product flow in the traditional sense begins with suppliers and ends with a manufacturer or distributor. The goods are then distributed to retailers and customers. Reverse logistics management begins with the consumer and moves backwards through the supply chain, returning products to any point along the way.

Supply networks that are well-designed are adaptable to changes and can handle certain reverse logistics. This reverse procedure might return products to the original supplier or one step back in the chain. They can even resell or discount returned items through their usual sales or discount channels (like liquidators).

How Reverse Logistics Works

Reverse logistics involves moving items at least one step backward from the supply chain’s typical terminus. Various plans and controls may be used in this procedure. Some businesses would rather outsource this work.

Reverse Logistics Process

Managing returns and purchasing surplus goods and materials are all part of the reverse logistics process. The procedure is also in charge of dealing with any leases or renovations. Reverse logistics differs by industry, and there are several financial incentives for bettering reverse logistics management.

In the beverage business, for example, the reverse logistics process makes use of empty tap containers. Companies that make beverages seek to reclaim the value of their containers by reusing them. This necessitates transportation planning, shipping load management, and container cleaning.

Reverse logistics is used in the building sector to transport and recycle salvaged materials to new locations. As the building industry embraces more sustainable waste-reduction measures, reverse logistics offers a cost-cutting opportunity.

Reverse logistics is in charge of returning packing materials and pallets in the food business. Rejected food shipments must also be dealt with by businesses. Rejections can cause logistical problems owing to delays, which can lead to food spoilage and tampering concerns. To overcome these logistical issues, the Reverse Logistics Association is implementing secure, quick, and reliable login (SQRL) codes on packaging.

5 Steps to Good Reverse Logistics

1. Process the Return

When a customer indicates that they want to return a product, the return process begins. This stage should entail obtaining return authorisation and determining the condition of the merchandise. Return shipments are scheduled, reimbursements are approved, and faulty goods are replaced as part of this process.

2. Deal with Returns

Examine a returned product when it arrives at your location or at a centralised processing centre to establish its return category. (Note: If reverse logistics has been streamlined, you should already know where the product should go before it arrives.) Sort items into one of the following categories: repair, resell as new, resell as a return, recycle, scrap, or refurbish.

3. Keep Returns Moving

Sending repairable products to the repair department can help you reduce your everyday trash.

4. Repair

Move the returned item/equipment to the repair area after evaluating it and determining whether it can be fixed. If it’s not possible, sell any parts that can be sold.

5. Recycle

Any parts or items that you are unable to repair, reuse, or resale should be given to the recycling centre in your area.

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