Finding smart solutions to sustainability challenge
By Craig Parker, Chief Executive of Supply Chain Management at Barloworld Logistics
Over the past several years, discussions around environmental sustainability have moved from academic arenas to governmental and policymaking forums, and have now finally arrived in the corporate boardroom. Business leaders across sectors can no longer ignore the calls for sustainable and eco-friendly business practices, which are growing louder with every passing year.
Indeed, with the imminent introduction of carbon taxes and climate change bonds in South Africa, local business leaders are finally recognising that sustainability is in fact a strategic priority.
Those who fail to change the way they do business will undoubtedly fall behind quickly - not only from a financial point of view, but also with regards to brand/reputational equity, says Craig Parker, Chief Executive of Supply Chain Management at Barloworld Logistics.
Positioned to make a difference
As many decision-makers within the sector are beginning to realise, those in the business of supply chain and logistics solutions are ideally positioned to make an immediate and powerful impact on not only their own environmental footprints, but also those of their clients. In the medium and long term, smart supply chain solutions providers can ultimately provide valuable cost savings to clients by pursuing innovative and integrated sustainability measures. As mentioned above, having a strong stance on sustainability - and partnering with like-minded suppliers - is also fast becoming invaluable in the all-important reputational and branding stakes.
One of the major themes underscoring corporate responsibility with regards to the environment is the notion of the circular economy. The World Economic Forum defines the 'circular economy' as follows:
"A circular economy is an industrial system that is restorative or regenerative by intention and design. It replaces the end-of-life concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impair re-use and return to the biosphere, and aims for the elimination of waste through the superior design of materials, products, systems and business models."
Regenerative 'by design'
Arguably, few other sectors can embrace the 'by design' approach as effectively and immediately as supply chain solutions.
While the old or 'traditional' model was to 'take, make and waste', the new model is to 'refurbish, re-use or recycle'. This inevitably requires changing the way things are done: the way raw materials are extracted; product design; refurbishing products; and re-using as many components as possible to reduce the volumes going to landfill.
It is possible, for example, to recycle the majority of materials that move through the supply chain - from cardboard and paper, to steel, plastic, polystyrene, glass and timber, electronic waste and organic waste (that can be turned into compost or biofuel).
The cost - or part of the cost - of recycling can be offset by turning waste back into raw materials, or from the rebate garnered from the recycled waste. Manufacturers can also use previous waste materials to produce products, and this is already starting to happen in some instances.
There is also an opportunity to break down rubble from demolished buildings, take the reinforcing out of it, and use it for road building, for example. In each of the above scenarios, smart and future-focused supply chain solutions providers will play a critical role.
Ultimately, by partnering with companies such as Barloworld Logistics, which has a stake in re, an environmental solutions business, there is huge potential to remove waste from supply chains and begin refurbishing, reducing or recycling as much as possible.
As Tadek Tomaszewski, CEO of re, has also pointed out, waste that cannot be recycled in a viable way in South Africa can be sold to companies in other parts of the world (such as India) that can do it viably. Indeed, re is already pursuing this strategy. Tomaszewski explains that like modern-day supply chains where goods and services are sourced globally, waste management is also a global issue where certain countries and regions are more effective at processing certain waste than others.
All of the above requires a new mindset, and a new approach to business, manufacturing, and the way goods are moved around the world. Yet, for those who are prepared to get ahead of the sustainability curve (and therefore ahead of competitors), there is a plethora of smart, innovative and forward-thinking strategies and solutions on offer - as well as savvy partners embarking on their own journeys toward greater sustainability.