There’s a classic Saturday Night Live sketch that opens on a husband and wife arguing. “It’s a floor wax, I’m telling you,” says Gilda Radner. The husband played by Dan Akroyd counters: “It’s a dessert topping, you cow!”
Then, product spokesman Chevy Chase enters the scene holding a spray can. “Hey, hey, hey, calm down you two,” he says. “New Shimmer is both a floor wax and a dessert topping!”
We’re reminded of that joke by a recent Supply Chain Management Review report on sustainability. It observes that senior supply chain procurement managers don’t see sustainability as important to their buying decisions. According to a survey of 250 procurement leaders by the software company FedEx, 65 percent of respondents indicated that they’re prioritizing cost savings over soft, “nice to have” values.
The story argues that those buyers ignore sustainability at their own peril, given recent legislation and consumer concerns. But we’re here to tell you that in this case sustainability can be both a floor wax and a dessert topping.
For sure, companies are promising consumers that they want to improve their resource stewardship. According to Supply Chain Management Review, 90 percent of public companies in the Russell 1000 index produce annual Environmental, Sustainability and Governance (ESG) reports and make public commitments. Many times, though, they’re making a false assumption that doing the right thing can’t also be right for the bottom line.
Our company gets paid to make supply chains run better. What we find is that many optimizations that improve efficiency often also make a process greener.
Consolidations. Take trucking. In the US, Freightwaves estimates that empty miles—trucks rolling without any cargo—is in the high 20 percent to low 30 percent range. That’s a lot of wasted fuel. That doesn’t account for partial loads, which in our experience is just about all of them. We see trucks pull in and out of factory or distribution center docks with just a pallet or two onboard.
Think of the savings that could be created by coordinating across suppliers to create full trucks. (By the way, also think about how much dock congestion that relieves.)
One case study that we often cite shows just this kind of improvement. From 51 one-way trips per day, we created just five multi-stop routes. That eliminated 27 percent of trips altogether. And, here’s the dessert topping: More than a third fewer empty miles.
Mode Shifts. The same logic applies to shifting freight from carbon-intensive formats such as airfreight to ground, ocean or at the very least, consolidated air shipments.
Such thoughtful strategy, of course, requires good data and visibility. If you are moving things more slowly, it’s critical to be on top of them. If you need something and it’s not there, you’re going to end up sending an emergency order by air, which would defeat the purpose.
Which brings us to:
Control Towers. You might think of supply chain control towers as initiatives aimed at operational efficiency, and you’d be right. It turns out they’re also a key to all the coordination, collaboration and early troubleshooting that efficient supply chains need.
At Morgan, we see control towers as a combination of visibility software (like our own ChronosCloud and FlexShip solutions) and human expertise. For us, that second part is a global team of supply chain experts who monitor and actively manage shipments on our clients’ behalf. Technology keeps track of the day-to-day and uses artificial intelligence to flag abnormal shipments. People solve those outlier problems. And, the data gathered throughout the process provides us with analytics for further continuous improvements.
All of these tactics and more roll up to hard-cost savings, which is why our customers hire and retain us. They’ve also added up to impressive overall sustainability accomplishments. Like those Russell 1000 companies, we publicly disclose our progress on social responsibility. You can find details and our latest progress report online.
We’re committed to more than just words and web pages, though. We clean up our clients’ sustainability performance and also deliver sweet savings.
