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28 November 2022

What is sustainability for your supply chain?

The 6R perspective in the supply chain and the triple bottom-line

Sustainability is a complex subject that affects everyone. In the supply chain, we often talk about “the consumer” in an abstract way despite that we are – in fact – all consumers. As consumers, we have the power to shape the future of the supply chain through our demands and needs.

 

The 2022 UN Intergovernmental Panel on Climate Change (IPCC) report concluded that humanity has not yet taken sufficient action to avoid an irreversible rise in global warming. If current emission rates are left unchanged – including countries seeing slow annual 4 percent declines – it could result in warming two times the target limit of 1.5° Celsius (2.7° Fahrenheit) set in the 2015 Paris Agreement.

 

The IPCC report offers evidence that climate action, when done right, can improve the health and welling being of people all over the world. Sustainability is necessary to survive and hence businesses and supply chains must focus on developing sustainable products and operations.

 

How do I develop sustainable products?

 

A product lifecycle has four stages: pre-manufacturing, manufacturing, use and post-use. For this reason, business should aim to place materials in this lifecycle more than once, avoiding “single use”.

 

This also means that there is much more to it than “reduce, reuse, recycle” – a coin termed by the United States Environmental Protection Agency in the ‘70s. Instead, supply chains should start applying the “6R perspective” to keep materials and products in use beyond a single life cycle.

 

6R stands for:

 

  • Reducing use of materials, energy, water and other resources
  • Reusing of products/components
  • Recovery and recycling of materials/components
  • Remanufacturing of products
  • Redesigning of products to utilize recovered materials/resources

 

However, no company can avoid waste completely. Instead, it’s important for us to focus on reducing material and waste to lower the carbon footprint, and take on a multi-lifecycle perspective. This allows us to preserve resources and serve customers’ needs with less, as the population continues to grow. An example of this can be seen in the consumer goods sector, where e.g. manufacturers sell used (“refurbished/renewed”) smartphones to new customers. Other businesses aim to reduce cardboard use by shipping products in their original packaging rather than putting them in an extra box and also offer used, open-box products at a reduced price. This effectively reduces waste – as around 5 billion pounds of waste are created through returns annually.

 

Sustainability is more than an economic challenge

 

While being profitable is a business’ goal, companies have to become greener to maintain their appeal to customers. In a study conducted by Körber in winter 2021, 65 percent of those surveyed agreed that having sustainable delivery options is one factor that influences their buying decision. While originally focused on economic profit, American author John Elkington introduced the notion of the “triple bottom line”. He encouraged companies to look beyond profit and loss but instead at two other aspects: environmental and societal. A development we are seeing now more than ever.

 

While sustainability in its original context is still often understood as the environmental aspect, we are now also focusing on building a happier workforce and community. Keeping staff morale high means better efficiency and more productivity. Businesses should use the triple bottom line to assess profit not only from an economical perspective, but a societal and environmental one too. Especially in a time when labor in the supply chain is hard to come by, it’s an employer’s responsibility to generate a welcoming environment. This will be a topic in our Perspectives series of blog articles, which focuses on the core challenges of the supply chain. Our first blog article with focus on Labor Engagement, Safety & Efficiency was recently published here.

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