According to a McKinsey Apparel CPO survey, companies need to walk carefully between meeting sustainability and affordability demands. With this complexity, how can brands, manufacturers and shippers avoid making logistics more complicated?
Scott Fletcher, President and CEO LocatorX discusses with Digital Journal how brands can utilize low-cost solutions as a great first step to “go green” at a competitive rate. Whether it is reduced packaging and labeling, streamlined shipping, or origin authentication.
Digital Journal: What are the current challenges facing the supply chain?
Scott Fletcher: The supply chain has lengthened – before it was simply the journey from manufacturer to retailer and the consumer took over from there. Now, with the growth of e-commerce, retail goods need to travel all the way to a front porch or parcel box, extending their journey significantly. More insight is needed into the supply chain to keep these goods safe and intact throughout transit.
Additionally, consumers are expecting more sustainable approaches to business models and to the supply chain. Companies are trying to determine how to keep costs low while continuing to meet consumer expectations, especially in our current retail landscape where customers are accustomed to being able to buy online and have goods shipped rapidly to our front door.
DJ: How important is it to create a sustainable supply chain model?
Fletcher: Consumers expect sustainability from companies. When choosing between two similar retailers, customers pay attention to how eco-friendly each company’s approach is. A lack of effort from a company to engage in sustainable, environmentally friendly practices can be a deciding factor in consumers moving on to the next provider.
DJ: What are the main obstacles for creating a sustainable supply chain?
Fletcher: Balancing cost is the main obstacle for creating a sustainable supply chain. Nowadays, there are more players in the supply chain when working with e-commerce. It can be difficult to manage each component and how that affects the bottom line of sustainability in your supply chain. By closely managing multiple partners or third parties that are within the supply chain, companies will ultimately be able to address and alter practices to create a more environmentally conscious approach.
DJ: What do businesses need to do to create a sustainable supply chain?
Fletcher: It’s important as companies build out a new supply chain model to not just think of today’s solutions and today’s technologies; companies should have a vision of the near-term emerging technologies that will be able to assist them in sustainability.
A recent study found that in the typical CPG supply chain, 80% of negative environmental impact came from the supply chain, not operations. Because most of the environmental impact associated with the consumer sector is embedded in the supply chain, it is the first place companies should look when attempting to go green. By focusing on this part about optimizing the supply chain – adding efficiency, reducing waste, tracking products – a company can have a substantial positive impact on their sustainability.
DJ: How important is new technology for this process?
Fletcher: New technology is critical because existing technology is already being used to its fullest. In the past when you wanted to implement new technology, you had to build out your own infrastructure to do so. Now, systems are able to run off of existing architecture, such as Wi-Fi, Bluetooth, smart phones, et cetera. In order to digitize the supply chain and provide data each step of the way, companies need to utilize a platform that is not proprietary. LocatorX’s suite of supply chain solutions allow any stakeholder to contribute securely to the event log.
DJ: What contribution is LocatorX making to this process?
Fletcher: We are offering a secure way to update event data with track and trace technology to allow insight into the supply chain in greater detail. Our products work with existing infrastructure and technologies that allow a greater ease of entry into the supply chain, enabling sustainability to be implemented at a much more affordable and accessible entry point.