By Phill Davies, Commercial Director at Magway
Supply chains are under stress. Walk into a supermarket today and you stand a good chance of witnessing the strain on global supply chains first-hand. Despite having some of the largest and most sophisticated supply chain systems in operation, even the biggest supermarket chains are being met with delays and empty shelves. Along with these strains, businesses are under increasing pressure to have supply chains that operate with ever-increasing levels of sustainability and resilience. With COP26 commencing in a matter of weeks, and the publication of the latest IPCC report, there is a renewed push to rethink and update global supply chains.
Developing the types of supply chains the new world needs, however, cannot be achieved with small incremental changes. As many businesses already have well-established supply chains, the low hanging fruit and quick wins have already been won. This leaves the many much-needed and larger-scale changes still on the table. To create supply chains that can meet emerging challenges, logistics teams need to undertake a holistic review of their supply chains, rethink existing methods, and adopt new technologies.
The holistic review
Thinking holistically about supply chains is key to achieving both sustainability and resilience. Starting by ensuring all suppliers meet or exceed sustainability targets and certifications is a good first step. However, the reductions in CO2 emissions and costs by switching suppliers can quickly be wiped out if areas like transportation are not included. Instead, supply chains need to be viewed as interconnected systems. Just as a physio can diagnose pain in your foot being caused by tightness in your hips, logistics teams need to view supply chains in a similar manner. Consequently, before any change is made, it needs to be checked against the impact it will have on the wider system.
Changes to supply chains also need to be considered against the impact on other business-critical areas including profit margins, staffing levels, and scalability. Enhances to sustainability and resilience cannot come at the cost of these other areas. The good news is that new technologies are available that allow businesses to make the changes they need without negatively impacting profitability and business operations.
Rethink, recycle, and reuse
In particular, a focus on reusing and recycling has the potential to have the biggest impact. We are already seeing progress in these areas with businesses like Nespresso embedding recycling as a core function of their operations. Now when customers receive a new order of coffee, they can also hand back used pods which can go on to be recycled. Recycling though is not a perfect solution. Breaking apart products or packaging and then creating a new item requires extra energy to be put into the system along with additional emissions. While better than throwing items away, it is still not a perfect solution and is far from the circular economy ideal. Due to these reasons, there is an increasing move towards reusing items instead.
To fully embrace the idea of reuse, businesses will need to make changes to their delivery processes, systems, and packaging. Changing how products and packaging are designed to increase their reuse, will take time to achieve but offers the chance for businesses to operate with increased sustainability and with reduced overheads too. By starting the process of adapting to these changes now, businesses can get ahead of the trend and ensure they are future proofing themselves.
Trust in tech
Working in combination with reviewing processes and moving towards the reuse of products and materials is the implementation of new technologies for transportation. Currently, the transportation of goods is going through a revolution. In the UK, internal combustion engine (ICE) vehicles will be banned by 2030, forcing businesses to rethink their transportation setups. While there are quick fixes like switching to electric vehicles, they are not a long-term solution. Thanks to the batteries that power them, they have their own challenges such as range limitations. This is not to mention that they don’t help solve existing issues like road congestion.
Luckily, new technologies have been developed that not only allow businesses to operate supply chains with increased sustainability and resilience but eliminate issues like congestion. At Magway, for instance, we are combining linear motor and control technology to create magnetic waves on which carriages containing deliveries can effectively surf through a network of pipes only one meter in diameter. Systems such as Magway can remove the need for most online delivery vehicles currently using our roads, alleviating the associated issues of congestion and pollution.
Time to step up
The need for supply chains with increased sustainability and resilience is now a business-critical issue. However, by taking a holistic review of supply chains, rethinking existing systems and processes, and adopting new technologies, businesses can meet these challenges head-on. With the eyes of the world focusing on COP26, and searching for ways to address climate change, now is the time for businesses to act big and look beyond small incremental changes. Those that act now and embrace new technologies and solutions will be laying a solid foundation for their future success and that of our planet.