Supply chain waste costs businesses $163 billion annually, according to recent research.
Most commonly, goods either exceed their sell-by date while in transit or the waste arises from overproduction. In fact, according to the report The missing billions by Avery Dennison, about 8 per cent of all products end up as waste.
Companies are aware of the problem, but they do not invest enough in the technologies to fix it. While 29 per cent of respondents to the survey said that supply chains have a large negative impact on their sustainability ratings, three quarters are investing 5 per cent or less of their technology budget to fix the problem.
In fact, pressure for sustainable products is low among consumers. Only 16 per cent of them put sustainability in their top three considerations when buying a product. On the other hand, almost half (48 per cent) ranked durability of products as a top concern.
“There is an opportunity for businesses to shape the future of sustainability by putting a greater focus on product durability,” the report said.
Over 80 per cent of organisation are investing in technology solutions to address sustainability. But supply chain initiatives are not often driven by sustainability goals – creating something of a blind spot.
For example, most businesses track supply chain waste through the lenses of logistics, management and inventory handling. Seeing them through an ESG lens can help enhance the environmental benefits of sound supply chain management.
“Efficient inventory handling, for example, directly cuts down on overproduction and eliminates unnecessary transportation, thereby cutting down on CO2 emissions and packaging waste,” it said.
IRM’s Supply Chain Risk Management Certificate can help risk professionals get up to speed on the subject. The qualification provides members with the strategic and tactical resources to handle supply chain risk better and has a specific module addressing the global challenges of sustainability, urbanisation and industry 4.0.
Organisations need to embrace and embark on a strategic risk journey before it’s too late and a risk event takes place,” Greg Schlegel, Founder of the Supply Chain Risk Management Consortium. “The first step in your journey is to get educated so that you and your team have the agility and right skill-set to handle complex interconnected supply chain risks.”
Find out more about IRM’s Supply Chain Risk Management Certificate here.