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Benchmarking progress in creating greener supply chains

Körber set to find out how successful companies are incorporating supply chain sustainability to meet customer demands and conquer supply chain complexity with its Benchmarking Report.

Benchmarking today’s supply chain

Today’s supply chain is dictated by rising consumer expectations – the faster and cheaper, the better. The overall goal for today’s supply chain professionals is to process orders faster, increase productivity, and get orders in the hands of customers sooner – while simultaneously doing everything economically. As part of these efforts, supply chain professionals are investing in micro fulfillment centers (MFCs) – to store goods closer to customers – and in optimizing their facilities.


However, consumer behavior is not a simple endeavor – consumers wants are multifaceted and often conflicting. Customers want their purchases fast while they simultaneously care about the environmental impact of their delivery. Consumers are asking brands they buy from to invest in sustainability throughout their supply chain operations. A study by Bain and Company found that 73 percent of consumers are willing to change their shopping habits in order to protect the environment.


In 2022, Körber launched a research project aiming to understand the underlying factors that drive supply chain complexity. The research project resulted in the identification of six operational areas:


  1. Agility and Resilience
  2. Digitization and Process Automation
  3. End Customer Experience
  4. Facility Optimization
  5. Labor Engagement, Safety and Efficiency
  6. Sustainability


In response to these rising complexities, Körber then commissioned its first ever Supply Chain Benchmarking survey. The research was designed to help supply chain professionals understand how leaders in the field are approaching today’s key challenges. The results, based on a representative survey among more than 200 companies, shed unparalleled insight into the industry and best practices to improve supply chain operation and performance. The report is organized around the six key factors that drive supply chain complexity, including sustainability.


Supply chain sustainability has become a priority for businesses as recent years have demonstrated the high influence sustainability has on consumer and investor decisions and is increasingly impacted by national and global regulation. Transportation has become a key focus as companies look to reduce miles driven and adopt more electric vehicles. So too has the environmental sustainability of warehouse operations. 


These concerns are clearly reflected in the survey results.


Key strategies for supply chain sustainability

The implementation of sustainability in supply chain is still building, however many supply chain professionals have planning and prioritizing initiatives underway.

Our benchmarking survey set out to find what sets sustainability leaders apart from the rest. 57 percent of the respondents were classified as leaders in sustainability based on the steps they’ve taken in preparation for a greener future and supply chain. 89 percent of businesses state that increasing sustainability is a strategic or high priority, and the overwhelming majority are either leaders or advanced. 


But what distinguishes leaders from the rest? 


The differentiator for sustainability leaders is their approach towards operational changes. They’re rethinking every part of their operation, from a single package to their distribution process. We found three key strategies that could serve as a blueprint for other supply chains:


Rethink process


The first step in optimizing operations towards sustainability is rethinking the current processes within your supply chain. The “circular economy” might not be a mainstream approach yet, but sustainability leaders are pushing to make it a reality. Circular economy projects enable the re-sale, re-use or upcycling of previously sold products. This can include the product itself, or the materials uses to manufacture and deliver them, often by the manufacturers themselves. Circular economy projects can be hard to do because they run counter to the traditional one-way flow of goods from producer to consumer.


While this approach is at odds with the traditional supply chain, it can significantly cut costs for both consumers and manufacturers and reduce emissions and waste dramatically. Leaders are four times more likely to be implementing circular economy projects than advanced supply chain organizations. Unsurprisingly, 71 percent of sustainability leaders in our survey have either implemented or are in the process of implementing a circular economy project.


H&M and Zalando are among the latest fast fashion brands creating sustainability initiatives in hopes of making the fashion industry more circular than linear. The goal is for the fashion industry to make better use of the planet’s scarce resources through long-lasting design, repair, reuse, resale and recycling clothing.


Both retailers have opened second hand clothing retailers for consumers to shop more sustainably. Zalando launched their free digital application called “Zircle” in July 2018, acting as a marketplace for consumers to resell clothing items. In 2019 alone, Zircle extended the life of more than one million fashion items.


H&M is a majority-owner of Sellpy, a Swedish online second-hand shop. In 2021, Sellpy expanded availability in over 20 more European countries. The retailer believes second-hand is currently one of the fastest growing market segments in the fashion industry. With more than 20 million euros invested in Sellpy, H&M has collaborated with Sellpy to give the brand access to an H&M warehouse in Poland.


Rethink partnerships


A company’s sustainability efforts should not only fall on the shoulders of supply chain leaders. Strategic partnerships play a key role in helping businesses achieve their sustainability goals. By partnering with the right suppliers, supply chains can unlock new innovations and join in on partnerships to reduce emissions. These types of initiatives are universally leveraged by leaders: 98 percent ranked supplier sustainability as either “important” or “very important.”


When picking a supplier, companies can make sure they meet specific sustainability requirements and certifications. Major retailers have led the way by making supply sustainability a key part of their vetting process for new vendors.


Rethink packaging


Packaging has an incredibly big impact on supply chain sustainability. It is typically used and discarded, often several times, while goods move from the manufacturer to the store shelf to the end consumer. Additionally, co-packers, shelf re-stockers and even customers themselves might throw away plastic packaging rather than recycle it. That waste – not to mention the resources used to replace it – adds up fast.


Leaders are three times more likely to be shifting to more sustainable packaging materials than advanced supply chain organizations.


Leaders are three times more likely to be shifting to more sustainable packaging materials than advanced supply chain organizations: 77 percent said they’ve prioritized the use of sustainable packaging materials, conscious of packaging waste costs and its impact on the environment


IKEA, known as a multinational retailer of ready-to-assemble furniture, is a leader in the pursuit of sustainable packaging. IKEA has been looking for ways to upgrade to sustainable packaging since they began phasing out single use plastic in January 2020. The company has since set a new goal of phasing out plastic from consumer packaging in two steps: an all new range of products by 2025 and then their current running range by 2028.


In an effort to contribute to a world without waste, the company is searching for innovative solutions to replace cardboard as the source material of the classic IKEA flat packs. The goal is to create packaging surrounding IKEA products be as sustainable, affordable, and protective as possible.


ESG: the latest supply chain imperative

The latest concern in supply chain sustainability – and across all industries – is the concept of ESG, standing for Environmental, Social and Governance. All three words are paired with their own set of responsibilities, activities and business processes deep within every part of an organization. ESG will only continue to rise in importance in the coming years thanks to initiatives passed by local governments.


Environmental represents conservation of the natural world, Social represents consideration of people and relationships, and Governance represents the standards for running a company.


While there is no exhaustive list of ESG examples, a few related issues to each principle are:


  • Climate change
  • Carbon emissions
  • Air and water pollution
  • Deforestation
  • Energy efficiency
  • Waste management
  • Water scarcity


  • Customer satisfaction
  • Data protection and privacy
  • Gender and diversity
  • Employee engagement
  • Community relations
  • Human rights
  • Labor standards


  • Board composition
  • Audit committee structure
  • Bribery and corruption
  • Executive compensation
  • Lobbying
  • Political contributions
  • Whistleblower schemes


The Environmental pillar of ESG is the current focus for most companies’ sustainability initiatives – as well as the focus for the rest of the blog. However, Social and Governance will rise in importance in the coming years.


Keep sustainability at the core of your supply chain operations

In order to incorporate sustainability to your supply chain, you must remember to keep it as a core focus in everything your business does. Supply chains are fast-paced, constantly evolving to keep up with rising customer demands and expectations. Instead of considering sustainability a trade off to delivering goods quickly, increased productivity or saving costs, work on adapting sustainable processes to your supply chain one step at a time.


In short, everyone knows that sustainability is important. Most supply chain operators think it comes down to being leaner and more efficient, but leaders make sustainability central to their supply chain operations.


Want to learn more on what current supply chain sustainability leaders are doing? Visit our benchmarking practice or download the full Benchmarking report for more details on the survey results.


For further insight on supply chain sustainability based on the Supply Chain Benchmarking survey, download the infographic and supply chain performance guide on sustainability.

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