In today’s business world, there’s a significant departure from the supply chain methodologies of the past. What once revolved around pricing, delivery times, and exchange rates has now evolved to prioritize environmental sustainability and ethical sourcing.
The old-world business model, where price and speed were paramount, often overlooked critical environmental factors. However, modern companies with foresight recognize that long-term success involves much more than just profit. The emphasis on “net-zero emissions” is no longer a buzzword but a serious consideration for businesses that want to make a lasting impact and remain relevant.
Richard Reid, CEO and executive director for Supply Chain Canada, highlights this change. With a legacy of representing supply chain entities for over a century, his association has witnessed firsthand the evolution in priorities. Reid points out the growing consumer power in this transformation: “If you’re a company that’s polluting, consumers will vote with their dollars and go somewhere else.”
Governments globally may have been slow initially to regulate corporations’ environmental impact, but the tide is turning. Imposing carbon and pollution taxes serves as a testament to their commitment to pushing businesses toward environmentally friendly practices.
The business world needs to anticipate and prepare for these regulations. As Reid astutely observes, “It will cost you money and you need to get ahead of it now.” Achieving net-zero emissions requires scrutinizing every aspect, from vendors to product design, signaling a radical shift in business operations.
Taking the food industry as an exemplar, it’s evident that equipment and energy sourcing are pivotal. Using outdated machinery, like 30-year-old diesel tractors, is no longer viable. Furthermore, how suppliers transport goods—whether by road, rail, or water—directly affects their carbon footprint. This, in turn, affects their ability to achieve net-zero emissions.
Another crucial aspect is the end-of-life phase of a product. The emphasis is on ensuring products can be reintroduced into the supply chain rather than adding to landfills. From farmers utilizing manure for crops to brewers recycling mash for processing, there’s an undeniable push for circularity in supply chains.
A crucial message Reid imparts is the importance of business relationships in this new era. Loyalty to a supplier based on years of association is now secondary to their sustainability practices. “Anybody who’s not making an effort to change… you can’t do business with them anymore.”
Thorough vetting is paramount. Before entering a contractual relationship, businesses need to commit to hands-on evaluations. An on-site visit is often the only way to ensure transparency and verify claims. Finding partners aligned with sustainability goals is imperative for any industry aiming for net-zero emissions.
In conclusion, the modern supply chain is a far cry from those of our grandparents. Embracing change, promoting sustainability, and ensuring accountability are not just ethical choices but crucial for business survival in the 21st century.