In today's globalised world, supply chains have become increasingly complex, spanning multiple countries, and involving numerous stakeholders. This complexity has led to a growing need for sustainable supply chains to not only minimise environmental impact, but also promote social and economic development. Companies are therefore focusing on reducing their carbon footprint by implementing newer and more sustainable practices throughout their supply chains, which includes usage of renewable energy resources, minimising waste, ethical sourcing, optimisation of transportation routes and implementing ecofriendly packaging solutions.
Commitment to sustainable supply chains: leading the way
Indian companies are increasingly recognising the strategic imperative of sustainability in supply chain management. Leading companies are re-evaluating their value-streams and embracing various models to implement green supply chains, such as life cycle assessment (LCA), cleaner production, eco-design, green procurement, reverse logistics, and carbon footprint analysis among others. The gains from these initiatives not only lead to environment conservation, but also enhance brand reputation and boost consumer trust. For instance, prominent Indian conglomerates have significantly invested in sustainable supply chain, water conservation and renewable energy programs by steering collaborations.1 With changing ESG regulatory landscapes across the globe and most organisations operating in multiple countries, a greater number of Indian companies are looking to create environment-friendly supply chains and enhance traceability into their operations.
Business differentiation through sustainable supply chains
Green supply chains can serve as a powerful business differentiator by positioning companies as leaders in sustainability and environment stewardship. By implementing eco-friendly practices throughout their supply chains, businesses can showcase their commitment to reducing carbon emissions, minimising waste and conserving resources, leading to cost savings. This not only appeals to environmentally conscious consumers but also attracts investors and partners.
Navigating the challenges in implementing sustainable supply chains
As businesses in India increasingly embrace green supply chains to reduce their environmental impact, it is crucial to address the challenges and build resilience in this transition. The lack of standardisation and transparency in supply chains is a top concern to businesses, especially those who have already set their ESG goals wells in advance. Addressing this challenge requires the establishment of industry-wide standards, certifications and transparent reporting practices.2 It is also to be noted that every organisation will eventually fall into the scope of emissions of its own clients as well, addressing these linkages sooner than later is high on the ESG agenda for companies world over. Another challenge is the need for capacity building and training for suppliers and stakeholders. Awareness and training programs on sustainable practices, waste reduction and energy efficiency, will enable suppliers to align with ESG goals.
Additionally, the complexity of supply chains in India poses a challenge. With multiple tiers of suppliers and intricate networks, ensuring transparency and reliability of data becomes more challenging. Collaboration and engagement with suppliers, as well as the adoption of technology, can enhance traceability of products and processes. Infrastructure limitations, including inadequate waste management systems and renewable energy infrastructure are also essential to support the changing ecosystem across operations.
Driving sustainability through innovation and collaboration
Innovation is key to promoting sustainability within supply chains. Through technology and collaboration, businesses can devise innovative solutions that reduce environmental impact and boost efficiency. Collaborative initiatives, such as industry alliances and partnerships, promote knowledge sharing, resource pooling and technology adoption. For instance, use of internet of thing (IoT) devices can track and monitor the flow of goods and materials throughout the supply chain, providing real-time data on inventory levels and energy consumption allowing companies to identify areas where they can reduce waste, improve efficiency and minimise their footprint.
Some companies are leveraging value engineering techniques to look for sustainable materials which meet the functionality. They are fundamentally redesigning their manufacturing processes that are environment friendly which in turn also leads to a reduction in manufacturing costs. Companies can also leverage blockchain technology to create a transparent and secure record of transactions and data throughout the supply chain. AI-powered algorithms can optimise transportation routes, reducing fuel consumption and emissions.
With the global order moving towards net-zero goals, the need for green supply chain management is becoming more critical. Creating sustainable and resilient supply chains requires a long-term commitment and continuous improvement. Companies need to address the forward and backward linkages of their value chain by working in tandem with their suppliers. Optimising the power of technology to understand real-time ESG data will only boost the efforts of businesses looking to understand their supply chains better, make a positive impact on ecosystems, accelerate operations, reduce logistics costs, and build a sustainable brand for the years to come.
Additionally, the complexity of supply chains in India poses a challenge. With multiple tiers of suppliers and intricate networks, ensuring transparency and reliability of data becomes more challenging. Collaboration and engagement with suppliers, as well as the adoption of technology, can enhance traceability of products and processes. Infrastructure limitations, including inadequate waste management systems and renewable energy infrastructure are also essential to support the changing ecosystem across operations.
[1] How Indian consumer brands are making their supply chains sustainable, The Times of India
[2] Inclusion of circular economy practices in the food supply chain: Challenges and possibilities for reducing food wastage in emerging economies like India, Springer
