Whether you're trying to keep up with customer expectations or align with new industry standards, implementing a sustainability program is an absolute must. However, it can be difficult when the concept of "going green" is constantly evolving, and is often interpreted differently from one company to the next. Even more challenging is establishing goals and metrics for this ever-moving target. The go-to solution often becomes determining the success of sustainability programs based qualitative measurements, rather than quantitative.
Stumped on exactly what to track? You're not alone. We've suggested four of the most valuable key performance indicators (KPIs) to determine whether or not your sustainable supply chain management strategy is meeting your intended outcomes.
1. Supply Chain Waste
Supply chain waste is an issue in all sectors. Waste can arise in many different ways – from expired products, damaged goods, to customer consumption. The first step in measuring your supply chain waste is to get a first-hand look at what each phase of production looks like for your facility. Start at the sourcing phase, move into the assembly line, observe the transaction period between the customer and your company, and end at the customer’s final experience with your brand.
- Where was there unnecessary waste?
- Was there too much packaging?
- Could alternative sustainable products be implemented?
- Are their jobs that could be optimized so less is used?
- What about my training programs could be altered to maximize resources?
Pro Tip: If reducing the amount of packaging required for your product is not an option, try swapping out the packaging with an eco-friendly alternative like biodegradable mushroom packaging.
2. Energy Use
Source Energy Use is one of the most holistic measurements available. An SEU measurement requires a far-reaching assessment that marks energy consumption at each of your physical sites, energy transmission, delivery, and production losses. Once you know your energy usage rates, you can start making comparisons, and find ways that you’re losing money or energy.
3. Load Density
Less-than-truckload (LTL) freight classification is a shipment based on the density of the products shipped. The green objective here is to ship at the highest density possible, taking into consideration products, routes, stops, and contracts. You can measure Load Density using a variety of measurement tools, like visualization data management and network optimization, to find alternative routes or systems that increase the density of your shipments. By creating optimal load density routes, you can reduce costs, fuel, and energy, which ends up helping your bottom line too!
4. Greenhouse Gas Emissions
Reducing greenhouse gasses is an important way to commit to sustainability. The most current way of measuring Greenhouse Gas emissions is called Scope 3 Greenhouse Gas Protocols. Scope 3 protocols measure all the ways a supply chain emits greenhouse gasses, including direct emissions from vehicles and manufacturing, electricity, utilities, and indirect activities like worker commutes and waste disposal. The key takeaway here is to evaluate more than just your facility emissions. Instead, step back and consider the entire network that is required to produce your service or product.
Pro Tip: An easy way to tackle your emission production is worker commutes. We’ve seen success in this area by implementing a reward system for employee carpooling!
Creating a sustainable supply chain management plan is important in today’s business world. However, getting started without a clear path to success won’t get you very far. It’s equally as important to create goals based on measurable statistics. The best way to maximize the efficiency and organization of your sustainable supply chain management strategy is to choose a few key KPIs that help keep everyone on the same page and create a greener future.
About Michael Wilson
Michael Wilson is AFFLINK'S Vice President of Marketing and Communications. He has been with the organization since 2005 and provides strategic leadership for the entire supply chain team. In his free time, Michael enjoys working with the Wounded Warrior Project, fishing, and improving his cooking skills.