Eliminate trade-offs between sustainability and costs

This is an excerpt of the original article. It was written for the September-October 2021 edition of Supply Chain Management Review. The full article is available to current subscribers.

September-October 2021

This time every year, we publish Gartner’s Top 25 supply chains, the annual list of the supply chains that have made it to the top, a list that now also includes 5 Masters, or companies that have consistently outperformed year after year. You can read the article in this issue, along with the web exclusive material we publish on scmr.com, to find out what it takes to become a supply chain leader.

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Regulatory mandates, investor demands and consumer sentiment are compelling organizations to deliver on their sustainability promises. To that end, nothing is more vital than dispelling the misconception that sustainable operations always cost more. In truth, no such trade-off is required. Organizations can operate cost-effectively and sustainably.

For example, we helped a major consumer packaged goods company redesign its supply chain to reduce overall miles traveled by 11%. The change trimmed 10% from $250 million in supply chain costs, while also reducing the company’s carbon footprint by 6,700 metric tons of carbon dioxide emissions. Over a decade, that’s equivalent to planting 110,000 trees, or creating more than five Central Parks.

The formula for concurrently lowering your costs and carbon footprint is strikingly simple.

1. Measure the waste in what you do.
2. Calculate the environmental impact associated with that waste.
3. Pinpoint and pursue actions to minimize waste, cut costs and reduce your carbon footprint.

Applying this formula, however, requires a willingness to rethink your fundamental assumptions, coupled with coordinated expertise and sustained collective effort.

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