Here are some game changing ESG metrics for supply chain managers
Our planet needs us more than ever now, and supply chain managers can take impactful steps – such as replacing single-use transport items with returnable transport items (RTIs) – that will quickly add up to major gains. While RTI can rapidly enhance the efficiency and costs of operating your overall supply chain, there’s potentially much more to gain.
Consider your sustainability initiatives in a bigger light: ESG, or Environmental, Social, and Governance, and the impact of increasing supply chain efficiency on your company’s shareholder value.
There was a time when supply chains were measured in cold, hard efficiency metrics: cycle times, cash-to-cash times, turnover, fill rates, on-time deliveries, lead times, forecasting deviations, backlog – we could go on. And none of us need convincing that these and many other similar metrics are a vital part of maintaining the health of a supply chain as well managing its continuous optimization.
ESG is a potential win for supply chain managers because it, too, introduces a new set of metrics – but, instead of supply chain operational efficiency, ESG measurements signal to an investor just how desirable your company’s supply chain is to the socially and environmentally conscious. And that can directly impact your company’s valuation.
A 2022 study for Harvard Law School found that “nearly two-thirds (63%) of global investors prefer active [investment] funds to integrate ESG.” (More here.)
Today, you can begin implementing simple tactics that both support ESG initiatives and make good sense to supply chain efficiency. Here is a brief sampling of some of the environmental ESG metrics that supply managers can impact:
- Greenhouse gas emissions – by reducing, eliminating, or otherwise streamlining transport related costs for shipment of raw materials as well as finished products.
- Air and water pollution – spawned by unnecessary transportation and production power, made necessary by inefficient supply chains.
- Business circularity – a more generic term for “circular supply chains,” this valuable metric can be met through the introduction or expansion of returnable transport items in place of single-use items.
- Deforestation – reduced reliance on paper goods, such as through packaging, can have an impact, year after year.
- Recycling and waste management – your returnable transport items play a valuable role here as well, eliminating the inherent waste of single-use transports.
There’s much more to be said and read about ESG. The Harvard Law study linked above is a good start. But you don’t need to wait to make some simple, common sense moves today. Talk to ACSIS about an RTI initiative. Chances are good we can help you eliminate waste from your supply chain and save costs sooner than you think.