In an interconnected world linked and driven by world trade, maintaining efficient and sustainable supply chains can make a significant difference in operational effectiveness and achieving greener outcomes. The focus on supply chains is not misplaced – it’s been found that around 50% to 70% of operating costs and over 90% of an organisation’s greenhouse gas (GHG) emissions can be attributed to supply chains.
Having the right supply chain management strategy is therefore essential for a company’s environmental, social, and governance (ESG) goals. A sound supply chain management plan involves integrating environmentally and socially responsible practices into the procurement, production, and distribution processes to minimise the environmental impact of the supply chain while maximising the value delivered to customers and stakeholders.
In addition, proper supply chain management not only helps in meeting regulatory requirements and consumer expectations but also presents opportunities for cost savings and operational efficiencies. By implementing sustainable practices, manufacturers can enhance their brand reputation, attract a new market segment of environmentally conscious customers, and create a competitive advantage in the market.
Key strategies for sustainable textiles supply chain management
There are several strategies for effective and sustainable supply chain management. Firstly, textile manufacturers can implement green procurement practices that involve sourcing materials and components from suppliers who adhere to environmental standards and sustainable practices. Research has found that sustainable procurement increases brand value by around 15% to 30%. Textile manufacturers should also prioritise suppliers who offer eco-friendly products, use renewable energy sources, and commit to reducing waste and emissions.
By integrating green procurement practices, these manufacturers can influence the entire supply chain to become more sustainable alongside improving brand perception.
Secondly, efficient transportation and logistics play a significant role in sustainable supply chain management. Manufacturers should therefore optimise transportation and logistics like improving shipping routes, consolidating shipments, and utilising eco-friendly transportation modes so they can reduce emissions and fuel consumption. Even simple measures like setting maximum speed limits on transport vehicles have been found to save costs, with US retailer Staples saving up to US$3 million in fuel annually due to the increased efficiency gained. Additionally, implementing warehouse management systems and inventory optimisation techniques can minimise waste and energy usage within the logistics operations.
Thirdly, leveraging technology such as advanced analytics, IoT (Internet of Things), and blockchain, can enable textile manufacturers to track and trace products throughout the supply chain, identify areas for improvement, and make data-driven decisions to enhance sustainability. Plus, around eight in 10 supply chain managers say that data analytics are vital for reducing costs.
The challenges of implementing new supply chain strategies
Despite some of these clear benefits, implementing sustainable supply chain management practices may not be easy due to a variety of factors. These include facing resistance to change, the perceived costs involved in this transformation, and difficulties when integrating new methods to fit existing processes.
Manufacturers need to identify the sources of resistance and address them through effective communication, training, and incentives. Building a strong case for sustainability and showcasing the long-term benefits can help in overcoming resistance to change.
Unfortunately, one of the most common challenges in sustainable supply chain management is the perceived implementation costs. Textile producers need to carefully evaluate the upfront costs of implementing sustainable practices and weigh them against the long-term benefits, such as cost savings, risk mitigation, and brand enhancement. By conducting a thorough cost-benefit analysis, manufacturers can make informed decisions and secure buy-in from decision-makers.
Integrating sustainable practices into existing logistical and operational processes can also be challenging for textile manufacturers as they may need to redesign workflows, reconfigure facilities, and adapt to new technologies. They need to proactively address these hurdles by investing in training, infrastructure upgrades, and process optimisation. To start, manufacturers must employ the right assessment frameworks and transformation roadmaps, like the Smart Industry Readiness Index (SIRI) and Consumer Sustainability Industry Readiness Index (COSIRI) to chart their progress and plan their manufacturing evolution.
Driving sustainability in supply chain planning and management
Driving sustainability in the supply chain requires clear and measurable sustainability goals and key performance indicators (KPIs). These goals include reducing carbon emissions, minimising waste, increasing the use of renewable energy, and promoting ethical sourcing. By setting specific targets, manufacturers can track progress and hold themselves accountable for sustainable performance.
Continuous monitoring and measurement of environmental impact are also essential for understanding the effectiveness of sustainable supply chain management practices. Textile manufacturers can use environmental management systems and sustainability reporting tools to track energy consumption, emissions, water usage, and waste generation. For example, data analysis and continuous monitoring have helped some US manufacturers operate more efficiently, reducing energy consumption by 12% to 15% and saving them around US$3.3 billion in downtime waste.
Additionally, employees play a crucial role in driving sustainability within the organisation. Manufacturers can foster a culture of sustainability by providing training, promoting awareness, and involving employees in sustainability initiatives. A study from the Business Strategy and the Environment journal supports this, finding that employee involvement plays an important role in green supply chain management practices. By empowering employees to contribute to sustainable supply chain management, manufacturers can harness the collective effort towards achieving greener outcomes.
Creating a sustainable supply chain with the right management strategies
Sustainability has become a topic of intense focus in the recent years across different sectors worldwide, with an increasing number of countries and industries making a firm commitment to reducing GHG emissions and moving towards a greener future.
In textile manufacturing, more must be done to drive green practices, especially in supply chain management, to enable manufacturers to get closer to their ESG goals. To achieve this, manufacturing leaders must know the right supply chain management strategies to implement, and how to overcome implementation challenges to achieve success.
But without the right maturity assessment framework or transformation roadmap to ascertain the organisation’s sustainability progress, it will be difficult to take the first step. That’s why frameworks like COSIRI are critical to help companies identify their weaknesses and areas to improve so they can bring the industry towards a greener future.
Learn more about how COSIRI can help your company enhance its supply chain management and bring you closer towards a net zero future.
