Trend Vision Chainalytics: ‘Sustainability increasingly tops the supply chain agenda’

For many years, cost-cutting was the main driver behind supply chain design and optimization. But the tide has clearly turned. Today, within many organizations, sustainability ranks alongside cost and service as an important reason to reassess the supply chain.

“When it comes to supply chain design, there are two aspects to our customer demand,” says Illian Hoekstra, Senior Manager Supply Chain Design at Chainalytics. “On the one hand, we’re seeing a continuation of the traditional demand for effective supply chain design, for example due to the need for optimization following a merger. And on the other, the desire to design the supply chain in a sustainable way has moved up the agenda in recent years.”

Needless to say, the interest in improved sustainability has been around for a number of years. “But in the past, if an intended supply-chain cost saving had a positive effect on sustainability too, such as lower CO2, that was a nice bonus. That’s different nowadays. We’re seeing a sharp rise in the demand for sustainability. In fact, we sometimes do supply chain optimization projects in which reducing carbon emissions takes precedence over cost savings.”

Objectives

Sustainability-related reductions increasingly form part of the strategic corporate objectives. “Customers often ask us how far they can go within their current network to achieve the desired sustainability targets, and which steps they must take to do so. There will always be a focus on costs, of course, but concern about the climate has now added another important parameter.”

He mentions a real-life example: “We recently optimized the supply chain sustainability for a home appliance manufacturer by switching a significant share of the primary transport from trucks to intermodal and rail transport. Since the company’s factory was also located close to a good rail network, our customer was able to reduce carbon emissions by 30 to 40% simply by redesigning the supply chain.”

Trend Vision Chainalytics: ‘Sustainability increasingly tops the supply chain agenda’

Do you want to read the full interview with Illian Hoekstra (Chainalytics)? Fill in the form below and receive the full interview for free!

Find all Trend Visions of Supply Chain Movement here >>