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4 Sustainable Supply Chain Trends in 2022 and Beyond

sustainable supply chain trends

What could be the sustainable supply chain trends in 2022 and beyond?

Supply chain management is not the same as ten years ago. And it can be challenging working in an industry that morphs faster than a Power Ranger.

Today, supply chain management has become more complex and difficult to manage. You need to meet increasing customer demands, stay profitable, and at the same time be sustainable.

In fact, sustainability can make or break your business. According to a study by Neilsen, 55% of consumers acknowledged that they are happy to spend more on products and services if the company is committed to a positive social and environmental impact.

So, you need to make your supply chain green. And, to ensure efficient green supply chain management, you should stay on top of the latest sustainability supply chain trends to make informed decisions.

But don’t worry. You don’t need to do all the research and spend sleepless nights. We’ve done the legwork for you.

Below we share the top four trends for a sustainable supply chain that will dominate the industry in 2022 (and probably change the way you do your job).

#1 Green Logistics Adoption Will Skyrocket

Green logistics makes your supply chain eco-efficient by reducing greenhouse gas emissions (GHG) and minimizing waste.

Plus, it can increase sales, reduce expenses, and improve profitability. In fact, according to a survey, 8 out of 10 consumers are willing to pay more for green delivery.

Therefore, we could see a hockey stick growth in adopting green logistics practices as one of the critical sustainable supply chain trends in 2022.

There are many ways companies can make their supply chain and logistics green, such as:

  • Eliminating distances via decentralized hubs and local sourcing wherever possible. It will decrease carbon emissions associated with transportation.
  • Switching from ICE vehicles to hybrid or electric vehicles.
  • Improving load planning. For example, redesigning product packaging to enhance conveyance utilization. This reduces the number of trips and carbon dioxide emissions.
  • Focusing on operational excellence in terms of environmental impact. This includes developing an environment-friendly logistics culture using incentives and KPIs.

Learn what green logistics is and the several green logistics strategies you can implement.

We could also see companies applying the circular economy concept to their supply chains. Such a model increases recyclable or renewable resource usage and reduces the consumption of energy and raw materials.

#2 Technology Utilization for Sustainable Supply Chain Trends Will See a Boost

Pandemic has impacted every industry, and so has the supply chain. Now, consumers expect eco-friendly products and transparency and traceability across the supply chain.

Some organizations have already started adopting new technologies such as the Industrial Internet of Things (IIoT), artificial intelligence, and blockchain to tackle this challenge.

Learn the six new-age sustainable supply chain technologies that can make your supply chain green.

We would see the adoption of such technologies grow further in 2022 and beyond for a good reason.

For example, AI-driven route optimization software can optimize routes to reduce the environmental impact of supply chains. While planning routes, it can factor in weather, traffic, roadblocks, delivery time windows, and more constraints.

So, drivers will have fuel-efficient routes with last-mile driving directions. And they can cover many stops without driving aggressively and burning fuel to show up on time and meet targets.

Also, not all deliveries have the same urgency. An AI-powered route optimizer can help companies adapt to changes in delivery priorities in real-time. The advanced algorithm can provide the most efficient and sustainable transportation method at any time.

Furthermore, artificial intelligence-enabled tools can predict customer demand more precisely. This helps companies ship only that many products customers will buy and replenish their inventory accordingly.

For instance, renowned fashion retailer H&M started using artificial intelligence in 2018 to forecast demand and adjust shipping orders accordingly. This is to ensure supply chains only use the minimum resources required, which results in fewer emissions from transportation and less wastage of clothes at the end of the season.

The IIoT also plays a crucial role in the supply chain. IoT can improve warehouse management, inventory control, vehicle maintenance, vehicle tracking, and sustainability.

For example, Route4Me’s multi-stop route planner can help you with pick-and-pack optimization to create optimal pick-and-pack routes inside your warehouse or yard.

Such software also comes with a GPS tracking app to help you track your vehicles in real-time. Plus, Route4Me’s trucking GPS app comes with geofencing technology to automate check-in and checkout. Learn what geofencing is.

Route4Me has prevented 10 billion miles from being driven and mitigated carbon emissions by over 10 Billion. Learn more about Route4Me’s Environment and Sustainability (ESG) initiatives.

Route4Me was even selected as a finalist in the 2021 UPS and Astrolabs Smart Logistics Challenge. Learn more about the Smart Logistics Challenge and why UPS and Astrolabs selected Route4Me as a finalist.

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#3 Companies Will Heavily Focus on Sustainable Supply Chain Development

The need for a more agile and resilient supply chain will grow in the coming years. This would help to manage external factors that can disrupt the whole ecosystem, and this challenge calls for more robust risk management.

First, climate change adaptation will play a critical role as most organizations participate in global value chains. Climate adaptation or climate resilience means you need to plan to mitigate the risks. It also means you need to identify opportunities from climate change and react quickly when unanticipated events occur.

Most companies focus on climate mitigation initiatives, such as reducing carbon emissions. But only leading organizations have prioritized the long-term benefits and initiated focusing on adaptation.

Most companies are well-familiar with supply chain disruptions caused by extreme weather events. However, more permanent changes in climate have devastating long-term impacts, including wildfires, drought, floods, hurricanes, and the list goes on.

All these can impact the availability of certain raw materials, and effects distribution systems, and cause mammoth financial losses.

Retail Warehouse full of Shelves with Goods in Cardboard Boxes, Workers Scan and Sort Packages, Move Inventory with Pallet Trucks and Forklifts. Product Distribution Delivery Center.
Image credit: gorodenkoff/iStockphoto.com

There are many ways companies can mitigate such risks. For example, Mars Inc., one of the largest animal food companies globally, has a team of in-house meteorologists who analyze weather patterns to identify potential disruptions in the supply chain.

Of course, this may not be a feasible solution for every company. But they can use the Route4Me route planner to stay aware of bad weather or any other constraints that could disrupt last-mile deliveries.

It comes with a weather map layer that shows real-time weather conditions to help prepare for bad weather. Companies can avoid delays, emit less, arrive on time, and keep their customers happy through this. Learn more about how to make your supply chain resilient.

#4 Supply Chain Companies Could Move Beyond Tier 1 Suppliers

As the market continues to demand commitments regarding the climate from companies across the globe, we would see companies go beyond Tier 1 suppliers (those with which organizations have a direct relationship). The suppliers working directly with the world’s largest companies have their suppliers, who have their own suppliers, and so on down the line.

Supply chain impacts focus on a maximum of three suppliers deep, or even further depending on the product or service. This makes it difficult for organizations committed to mitigating their supply chain impacts. This is because they don’t have any contractual connection to most of these suppliers.

There has already been an increased focus on Scope 3 GHG reporting and supplier engagement on environmental topics.  However, they alone are not enough to solve the climate crisis.

So, to drive significant reductions in supply chain impacts, companies need to go beyond Tier 1 suppliers and consider impacts beyond GHG emissions, such as biodiversity and water scarcity. And this could be one of the significant sustainable supply chain trends in 2022.

Companies that influence their suppliers can drive increased renewable energy penetration, increased availability of low-emission materials and products, and consequential reductions in supply chain impacts.

The pandemic has created a unique opportunity to speed up market transformation and integrate sustainability, environmental justice, and climate risk into global supply chains. If companies can think strategically about driving the transformation, there could be significant progress on transitioning into a low-carbon economy in 2022 and beyond.

The world is changing fast. Therefore, supply chains are constantly at risk of disruption from changing consumer demands or external threats such as trade wars, pandemics, and climate change.

Technology, resilience, and eco-efficiency are only some of the opportunities that supply networks should consider to tackle those challenges and ensure carbon-neutral enablement. Of course, some are still to be proven, but plenty of options are already available and more to come.

Route4Me

Want To See For Yourself How Route4Me Can Boost Your Profits?

Whether you want to slash the time it takes you to plan routes for your drivers, increase the number of stops they can make, or keep your customers satisfied knowing that your drivers show up on time… Route4Me helps you achieve that!

Start Free 7 Day Trial

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About Route4Me

Route4Me has over 34,000 customers globally. Route4Me's Android and iPhone mobile apps have been downloaded over 2 million times since 2009. Extremely easy-to-use, Route4Me's apps create optimized routes, synchronize routes to mobile devices, enable communication with drivers and customers, offer turn-by-turn directions, delivery confirmation, and more. Behind the scenes, Route4Me's operational optimization platform combines high-performance algorithms with data science, machine learning, and big data to plan, optimize, and analyze routes of almost any size in real-time.