Do EOFY Differently with QuickBooks
Need help choosing a plan?
Created with Sketch. 1800 917 771 Schedule a call
Need help?
We're here for you.
Schedule call
Created with Sketch.
Sustainable Supply Chain: Best Practices and Benefits
Running a business

Sustainable Supply Chain: Best Practices and Benefits

If you’re interested in reducing the carbon footprint of your business, you’ve probably already done the obvious work, like switching to LED bulbs, reducing waste, and investing in renewable energy sources.

These are all steps in the right direction, but building a sustainable supply chain can have the greatest impact. After all, freight and transportation are among the largest contributors to greenhouse gas emissions in many developed nations. And with e-commerce on the rise, that impact will only get bigger. But experts believe that reducing greenhouse gas emissions is possible by making shipping and storage processes more efficient.

Of course, revamping your supply chain is easier said than done. You have to consider the speed of delivery, the cost to you and your customers, and your carbon footprint: it’s a delicate balancing act.

But here’s the good news: Today’s consumers not only prefer to support brands that focus on sustainability, but the majority of them (57%) are willing to change their purchasing habits to reduce their carbon footprints, according to an IBM Research Insights report. That means choosing longer shipping times, picking up products in-store, or even paying extra for greener goods.

Beyond that, building a sustainable supply chain leaves you with more efficient and cost-effective processes that reduce energy consumption and save you money.

Curious about sustainable supply chain examples and wondering how to make your supply chain sustainable? ? Here’s how in 5 easy steps.

5 steps for a more sustainable supply chain

1. Look for partners with sustainability goals that align with your business

Cost and quality are two key factors to consider when partnering with a supplier, manufacturer, or fulfillment centre. It’s time to put “global impact” at the top of that list.

When choosing a national or global supply chain partner, consider their sustainability efforts and goals. Look for partners whose goals align with your business, and don’t be afraid to push for what you want. As the saying goes, be the change you want to see in the world. Combine efforts with other companies to influence the sustainable practices of your partners and promote more sustainability goals. You’ll build credibility within your industry and among your consumers.

When possible, use local suppliers to reduce the need for intercontinental or transoceanic transportation.

2. Maximise space in containers and packaging

No matter where your suppliers operate from, maximising the space in shipping containers is an important step in reducing your carbon footprint. A recent Forbes study found that at least a quarter of what is shipped across the oceans in containers from manufacturers is empty space. The number of shipping containers could be decreased by 61 million globally every year if the empty spaces were filled.

You can help by ensuring that your products are packaged correctly and without excess empty space. Supply chain experts believe that reducing empty space in packaging alone will lead to cost savings for your business and reduce your environmental impact by 72%, according to the same Forbes study.

Beyond that, make smart packaging decisions by choosing the right packing material for your products. Switching to corrugated packaging might seem like an easy way to go green, but if it’s not the right fit for your products, you could end up wasting even more material. Products could get damaged in transit, requiring more packaging, more shipping, and more manufacturing costs.

3. Use route optimisation to lower fuel consumption and reduce trips

The math here is simple: Fewer kilometres on the road results in a smaller carbon footprint.

If you’re in the business of delivering products or managing a fleet, invest in a route planner to help optimise multi-stop routes. Use order batching to decrease the number of routes and kilometres driven by increasing the number of deliveries in the same area by the same driver. And, of course, make sure your delivery vehicles are carrying their full capacity to reduce trips to and fro.

These changes are a small investment up front, but here’s what you’ll get:

  • Serve more customers, faster
  • Make more deliveries in the same amount of time
  • Reduce route overlap, lower fuel consumption, and save money
  • Reduce greenhouse gas emissions

Take it one step further by investing in electric vehicles for your fleet to reduce fossil fuel usage.

4. Offer greener delivery options at checkout

Remember, consumers are willing to change their habits around your sustainability programs or endure a bit of inconvenience to make greener choices. At checkout, give customers the option to save some money and receive their package a bit later rather than shipping products out right away. Rather than sending products individually, send them together in one batch—even if it takes a few extra days.

If your business has a storefront, give customers the option to “pick up in-store” rather than have their purchases delivered. Implementing “ship from store” processes can reduce distribution centre costs and help you avoid large delivery fees—all while shrinking your carbon footprint.

5. Ditch the paper trail, go digital

This one is simple: Digitise everything. Every form, every invoice, and every proof of delivery. While many countries are great at recycling paper, excessive paper use and high demand for paper products are contributing factors to deforestation and climate change. Reducing your need for paper is an easy step to take toward preserving the environment and demonstrating your long-term commitment to environmental sustainability.

Switching to cloud-based software to manage your documents and invoices is a great way to minimise your paper processes, but it has big benefits for your business too.

Using an e-signature software like DocuSign is more secure, faster, and more organised than pen and paper. Digital invoices and receipts allow for faster payments, automated bookkeeping, and instant deposits. And investing in digital storage systems like Dropbox, Box, or Google Drive keeps your important documents, photos, and screenshots organised and accessible—anytime, anywhere.

Benefits and challenges of a sustainable supply chain

Arguably the most obvious benefit that comes with a sustainable supply chain is the resultantly smaller impact on the environment. Lower amounts of waste and more efficient buildings and vehicles can help businesses see big cost savings, and fast. 

Having a sustainable supply chain not only results in large cost savings; green-friendly supply chains can go a long way toward shielding your business from reputational damage. You can accelerate your business growth by investing in a more sustainable supply chain, and you should ensure that your focus on supply chain sustainability positively affects your labour practices and the employees who are responsible for your sustainable supply chain management. 

Implementing a sustainable supply chain doesn't come without its challenges. Consumer skepticism regarding the "going green" sustainability initiatives that some companies take can make it hard for businesses to fully demonstrate their commitment to global sustainability and corporate social responsibility. And although many customers would agree that sustainability is indeed important to them, there remains little evidence that this importance positively contributes to consumer purchasing behaviour. 

Take action today for a greener tomorrow

Investing in more efficient equipment and greener processes can feel like a monetary load upfront, but the payoffs are well worth it. Taking the necessary steps to build a more sustainable supply chain, and investing in technology that can help you manage your supply chain processes and inventory, results in higher efficiency and lower costs for your business.

And if that’s not enough motivation, the United Nations predicts that our world will see irreversible damage within the next 10 years if we don’t make changes right now. Take action today to begin the important process of rebuilding our planet for future generations.

Looking for something else?

Get QuickBooks

Smart features made for your business. We've got you covered.

Help Me Choose

Use our product selector to find the best accounting software for you.

QuickBooks Support

Get help with QuickBooks. Find articles, video tutorials, and more.

Stay up-to-date with the latest small business insights and trends!

Sign up for our quarterly newsletter and receive educational and interesting content straight to your inbox.

Want more? Visit our tools and templates!

By signing up you are agreeing to our terms and privacy policy.

A happy small business owner signing up for the QuickBooks newsletter on laptop