Worldwide pandemics and more recently, military conflicts in Eastern Europe are continuing to cause significant disruption to global commerce, supply chains and consumers. In an unexpected twist of fate, these very same events offer us the opportunity to rethink the approaches that have facilitated rampant consumerism and exacerbated climate change.
In due course, this ‘revamp’ could well be the spur that brands and governments need to amplify a sustainable, green revolution in manufacturing, supply chain and retailing approaches.
On-shoring and its potential long-term consumer and environmental benefits are gaining traction as brands and governments attempt to mitigate future supply chain disruptions and the impact of inflation (on businesses and individuals). Alex MacPherson, Director of Solution Consultancy and Account Management at Manhattan Associates explores this further…
Increased flexibility, access to larger workforces and reduced operational expenses. These are just three of the most commonly cited reasons that have seen tens of thousands of North American and European organisations move significant business operations overseas.
Global supply chains have undoubtedly brought cost efficiencies since the turn of the millennium, but they have also introduced a level of fragility that was not fully understood until recent events.
From a financial standpoint, offshoring and the acquisition of raw materials and products from dominant markets might seem attractive, but factories producing 90 percent of global semiconductors and microchips, or countries supplying 30+ percent of global wheat yields, have shone a spotlight on the vulnerability and costliness of single points of failure.
As a result, many organisations (state and private sector) are weighing the benefits of moving their manufacturing and supply chain functions closer to consumers in an attempt to guard against the inevitability of future market volatility.
Nevertheless, there is far more to like about the potential for bringing supply chain and manufacturing processes closer to the consumer than simply economic and security incentives. Brands can reimagine and reinvent their entire approach to sustainability and environmental responsibility from the ground up with the onshoring movement of entire manufacturing processes and supply chains.
For example, it is a well-known fact that in the FMCG sector alone, to restructure and implement a more sustainable approach to packaging chips or juices can cost millions of dollars in both time and technology.
Expensive though it may be, consider this: the chance to implement an entirely new stack of technology and processes from scratch (buoyed with benefits) is a once in a lifetime opportunity that most brands will never have. As a result, we will have the opportunity to develop manufacturing methods, supply chains, and delivery networks that satisfy the demands and expectations of modern consumers, as well as align with environmental and sustainability goals.
That is surely a prospect everyone from the CEO, down to the end consumer can see the long-term value of.
The importance of green supply chains
A key element of offering greener commerce options to consumers is to source raw materials from fair trade and eco-friendly suppliers. However, it’s also important to recognise the importance of operating more sustainable supply chains in order to deliver these types of goods – failing to do so is a big mistake.
Manhattan’s innovative three-dimensional cubing system, or smart packaging and dunnage utilisation, or using less packaging and shipping less air throughout the supply chain, can help reduce volume per shipment and improve transportation efficiency, meaning fewer trucks on the roads and fewer planes in the skies.
It’s a win, win for not just bottom-line profitability, supply chain efficiency and customer experience, but crucially the environment to – another example of how the application of ‘smarter’ technology can drive ‘greener’ outcomes across entire supply chain networks.
PLANNING THE LONG-TERM
World events are continuing to have a profound and lasting impact on the way we think about global supply chains in terms of resiliency and environmental credentials. As brands and governments look to mitigate against ‘the next’ significant event, the idea of moving manufacturing processes, goods and distribution networks closer to home/consumers is gaining traction.
In order to succeed, brands need to continue to innovate at a supply chain level, delivering networks and solutions that are resilient, reliable, as well as agile and responsive enough to adapt to future consumer and environmental needs.
Having a chance to start from the ground up, away from any requirements to retrofit solutions and processes into existing business environments (often actually slowing down work-flows rather than speeding them up), is the thing of dreams for CEOs, COOs, CTOs and supply chain directors all over the globe.
Even though relocation, building new factories and implementing new technologies may put a strain on shoppers’ pockets in the near term, surely the opportunity to build a green retail Eden cannot be passed up.