Alex MacPherson, director of solutions consulting and account management at Manhattan Associates, examines how brands and governments need to launch a green and sustainable revolution in manufacturing, supply chain and retail.
Global pandemics – and more recently, military conflicts in Eastern Europe – continue to significantly disrupt global trade, supply chains and consumers. However, in an unexpected turn of fortune, these same events provide an opportunity to rethink many of the approaches that have facilitated rampant consumerism and exacerbated the climate crisis.
In due course, this “redesign” may well be the spur brands and governments need to launch a green and sustainable revolution in manufacturing, supply chain and retail approaches.
As brands and governments seek to assuage future supply chain disruptions and the very real ripple effects of inflation (on businesses and individuals), the subject of offshoring and all its benefits long-term potential for consumers and the environment is growing. .
A case beyond pure economics
Increased flexibility, access to a larger workforce and reduced operational expenses. These are just three of the most frequently cited reasons why tens of thousands of North American and European organizations have moved significant business operations overseas.
While the expansive global supply chains that had risen to prominence since the turn of the millennium have undoubtedly brought cost savings, they have also introduced a level of fragility that until recent events was not. not fully understood.
While offshoring and acquiring raw materials and products in single, dominant markets might have been a good idea from a financial standpoint, having factories that produce 90% of the world’s semiconductors and microchips, or countries responsible for sourcing more than 30% of global wheat yields have highlighted the vulnerability and cost of single points of failure in global market conditions.
As a result, many organizations – both public and private – are weighing the benefits of bringing their manufacturing and supply chain functions closer to consumers in order to hedge against the inevitability of future market volatility.
Still, there’s a lot more to love about the potential to bring the supply chain and manufacturing processes closer to the consumer than just economic and safety incentives. The movement to “offshore” entire manufacturing processes and supply chain networks presents a tantalizing opportunity for brands to reimagine and reimagine their entire approach to sustainability and eco-friendly products and services, from zero.
For example, it is well known that in the FMCG industry alone, restructuring and implementing a more sustainable approach to crisp or juice packaging can cost millions of dollars in time and technology.
As expensive as it may be, consider this: the ability to implement a whole new stack of technologies and processes from scratch (with benefits) is a once-in-a-lifetime opportunity that most brands will never have. . It is a chance to put in place perfect manufacturing methods, supply chains and delivery networks, which not only meet the demands and expectations of modern consumers, but also ensure that these practices are also aligned with the environmental and sustainability goals.
It’s surely a prospect that everyone from the CEO to the end consumer can see the long-term value of.
The importance of greening supply chains
While sourcing raw materials from fair and environmentally responsible suppliers is key to providing greener trading options to consumers, it is equally important to recognize the importance of operating supply chains. more durable supplies to also deliver these types of goods – not doing so adds up to a huge missed opportunity.
Whether it is three-dimensional cubing (packing goods for shipping and shipping less air); smart packing and use of dunnage; empowering consumers to make more environmentally friendly purchasing decisions through optimized order fulfillment; or by using less packaging and shipping less air through the supply chain, the volume per shipment can be reduced and transportation becomes more efficient, which means fewer trucks on the road and less waste. planes in the sky.
It’s a win-win, a win-win not only for profitability, supply chain efficiency and customer experience, but more importantly for the environment – another example of how the application of “more smart” can drive “greener” results across supply chain networks.
Building for the long term
Global events continue to have a deep and lasting impact on how we view global supply chains in terms of resilience and environmental credentials. As brands and governments seek to mitigate the “next” big event, the idea of moving manufacturing processes, goods and distribution networks closer to home/consumers is gaining traction.
The key to the success of this new strategy lies in the ability of brands to continue to innovate at the supply chain level and to offer types of networks and solutions that are not only resilient and reliable, but also agile and responsive enough to make in the face of changing consumers. and environmental needs in the future.
Having a chance to start from scratch, away from any requirement to modernize solutions and processes in existing business environments (often by slowing down workflows rather than speeding them up), is the dream of CEOs, COOs, CTOs and directors. of the supply chain around the world.
While the cost of relocation, building new factories and implementing new technologies may impact buyers’ pockets in the short term, the chance to rethink our entire approach to global trade and the possibility of building a green retail Eden is an opportunity we cannot afford. Give Way.
© 2022 European supermarket magazine – your source for the latest supply chain news. Article by Alex MacPherson, Manhattan Associates. Click on subscribe register for ESM: European Supermarket Magazine.