It used to be that a brand’s success was primarily dependent on its core business — how much money it brought in versus how much it spent. In today’s culture, however, a savvy go-to-market strategy is no longer enough. Brands need to position their business based on what they stand for, with a recent study showing that 70% of Americans believe companies should address and improve social issues that may not be relevant to their daily business.
Sustainability has been at the forefront of this trend for years now, growing from a few recycling bins placed around the office to full-blown, company-wide initiatives. Today, two-thirds of global consumers are willing to pay more for products from sustainable brands or brands that are committed to being environmentally friendly — meaning “going green” is no longer a business-neutral nicety. It’s an opportunity for brands to implement and leverage operational enhancements across the organization to drive business value.
The supply chain is an optimal place for brands to start sustainability efforts — even those organizations that are still a bit skeptical. Logistics and supply chain solutions are essential to brands’ value chains and present several opportunities to deliver value-adding services that increase efficiency and reduce required inputs and overall global impact. By minimizing waste and optimizing strategy along these six areas of the supply chain, brands can satisfy consumers’ expectations for sustainability and accelerate their business goals.
1. Simplified supply chain
When it comes to business, sustainability translates to simplicity — eliminating unnecessary redundancy and complexity where possible. This exercise is vital when it comes to the modern supply chain, which consists of multiple systems fueling both traditional commerce and e-commerce. To understand and identify which areas to optimize, brands need to approach these physical and digital elements as one seamless system. With a holistic view, it is easier select end-to-end solutions that improve operational efficiency and cost reduction objectives, demand planning, multichannel integration and sustainability and corporate responsibility initiatives.
2. Material planning & factory supply
Packaging materials and accessories are a prime area for brands to make intentional changes in their supply chain. Solutions for material planning, kitting and assembly and factory supply empower brands to know exactly how many resources go into packaging and which resources can be reduced or even eliminated. As more corporate giants increasingly (and publicly) incorporate sustainable methods into their packaging, consumers increasingly appreciate a deliberate and personalized approach to material strategy
3. Strategic warehousing & distribution
Demand planning can increase sustainability across a brand’s entire forward logistics strategy. By forecasting effectively, brands can align their inventory levels with fluctuating demand to inform wise investment in products. Then, by strategically placing and shipping products based on regional demands, brands can limit surplus product and lessen wastefulness — ensuring the right amount of inventory is exactly where consumers need it. Transportation management tools can streamline that last mile by increasing efficiency and reducing costs across brands’ logistics functions.
4. Revamp returns management, repair & recovery
Returned items, when mismanaged, not only translate to lost revenue, but also can waste away on warehouse shelves or in a landfill. By investing in one turnkey solution, brands can manage the returns process through the ultimate use or reuse of the returned product — eliminating costly handoffs and decreasing inventory processing time. They can also strategize product manufacturing to recover value on every return, every time, no matter the circumstance. Defective returned items can be repaired, refurbished and sold as b-stock on the secondary market, or recycled to ensure brands are environmentally responsible.
5. Responsible sourcing, supplier & partner assessments
Sixty-five percent of surveyed Americans (and 76% of surveyed millennials) say they will research a company’s social or environmental efforts to ensure they’re authentic — meaning brands’ sustainability programs must be thorough. By implementing sustainable production and responsible sourcing into its supply base, brands can deliver products and services that follow consumers’ ethical standards, which are particularly essential to protecting brands’ most valuable resource: their workforce. To support employees and quality worker conditions, brands must check, evaluate and select suppliers against social criteria pertaining to labor practices — including human rights, and health and safety aspects — to minimize the negative social impact of their supply chain. Brands must also confirm that their supply chain partners are meeting the same set of standards.
In today’s competitive market, social responsibility provides brands with an opportunity to build and earn consumer loyalty. Instead of shying away, organizations must prioritize sustainable efforts to not only enrich their value chains, but also to optimize operations, reduce expenses and rev up revenue. To ignore this trend is to waste in more ways than one.