3 ways to reduce supply chain waste and create a more sustainable world

Nov. 11, 2020
A movement is underway in which retailers and manufacturers are working together toward building a zero-waste world.

Even before the COVID-19 pandemic, convenience shopping, food delivery and online shopping with more frequent deliveries and smaller order sizes had increased dramatically. Alarmingly, EY reports that the volume of goods shipped will quadruple by 2050. Logic dictates that without change, we will be living in a world with much more waste than today — staggering amounts of packaging in landfills and higher emissions from increasing deliveries.

At the same time, there is growing consumer demand for businesses to deliver orders faster, easier and cheaper while reducing the waste and negative environmental impact of their operations.

A movement is underway in which retailers and manufacturers are working together toward building a zero-waste world. They’re collaborating to employ new methods to reduce their carbon footprint and satisfy consumers’ changing demands simultaneously. The difficult challenge to make the supply chain smarter requires innovative ways to eliminate waste, eradicate empty transport miles and cut out inefficiencies in the supply chain. Let’s take a look at how this can become the new reality.

1. Eliminating waste

Pressure from various groups is leading consumer goods companies to view physical waste as a significant risk, not only on their bottom line but on shared global resources. The ways products are manufactured must change and become smarter, as most packaging ends up in landfills and millions of tons of food goes to waste in the supply chain.

A Science Advances study published in National Geographic found that 91% of the world’s packaging isn’t recycled, and 8 million tons of plastic ends up in the ocean every year. Plastic takes 400-plus years to degrade, which means most of it is still somewhere on this planet.

Here’s more disturbing food for thought: The Food and Agriculture Organization of the United Nations reports that one-third of the world’s edible food is wasted annually, but every $1 invested in food waste policies brings $14 in return.

Thankfully, big-brand grocers like Kroger have initiated efforts to eliminate excess packaging and food waste. Specifically, its Zero Hunger | Zero Waste plan is looking toward its manufacturing plants, logistics and transportation and stores themselves to achieve zero food waste company-wide by 2025. The plan includes finding a way to replace single-use packaging with 100% replaceable packaging for its brand.

2. Eradicating empty transport miles

Other waste in the supply chain stems from trucks driving with empty loads. While Business Insider reports that trucks transport 71% of all freight in the United States, The Economist published an article stating the nation’s trucks drive 50 billion miles each year carrying nothing – 28% of total distance traveled. Squandered and empty truck miles negatively impact profitability and the environment: they increase fuel costs, carbon emissions and delivery times, which releases more emissions into the air.

Suppliers and retailers agree that transport collaboration with data gathered from customers is crucial to wiping out wasted truck miles, driver time and air pollution. Working together, companies can design optimal truck routes to ensure the amount of time they move throughout the supply chain with no load is reduced to nearly zero. This can be achieved by sharing data and pinpointing how many miles a truck travels from the warehouse to the store with full loads and how many of those miles (leaving the warehouse) have empty loads.

For example, lane matching software that uses advanced data analytics can identify common transport flows to nearly eliminate inefficient partial loads and wasted miles. Pilot programs conducted by my company, CHEP, have saved more than 38 million miles of empty truckloads and 53,000 tons of CO2 emissions so far.

3. Cutting out inefficiencies

Avoiding bottlenecks in the increasingly complex supply chain — like overstock or delayed deliveries — and better predicting customer demand saves time, money and resources, thus eliminating inefficiencies.

A study by Deloitte found that 79% of companies with high-performing supply chains achieve revenue growth greater than average within their industries. These supply chain leaders recognize the importance of innovation and use analytics to increase efficiencies.

When manufacturers adopt technology and data that provides end-to-end supply chain visibility, they can manufacturer the right goods at the right time, reducing the number of unsold products sitting on store shelves.

Working toward a zero-waste world

Although changing patterns in consumer demand, such as higher frequency of orders and home deliveries, increases complexity, waste, transport miles and supply chain inefficiencies, many leading retailers and manufacturers are working together to use fewer resources and create a more sustainable planet.

Everyone – consumers, employees, shareholders – wants companies to become more socially responsible by eliminating waste in the supply chain while reducing costs. Through collaborative efforts and working toward a zero-waste world, companies can thrive and grow while creating value to society as a whole.

Jonathan North is senior manager and program lead — Zero Waste World, CHEP.

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