Accelerating a green commerce revolution

Global pandemics and more recently, military conflicts in Eastern Europe continue to significantly disrupt global trade, supply chains and consumers. However, in an unexpected twist of fortune, these same events provide an opportunity to rethink many of the approaches that have enabled rampant consumerism and exacerbated the climate crisis.

In time, this ‘rethink’ could be the impetus for brands and governments to drive a sustainable, green revolution in manufacturing, supply chain and retail.

As both brands and governments strive to reduce future supply chain disruptions and the very real knock-on effects that inflation has (for businesses and individuals), the topic of on-shoring and all of its potential long-term benefits for consumers and the environment comes up. at a rapid pace. Alex MacPherson, Director of Solution Consultancy and Account Management at Manhattan Associates, explores this further…

A CASE THAN PURE ECONOMY

More flexibility, access to a larger workforce and lower operational costs. These are just three of the most frequently cited reasons why tens of thousands of North American and European organizations have relocated key business activities abroad. And while the expanded global supply chains that have gained importance since the turn of the millennium have undoubtedly led to cost savings, they have also introduced a level of vulnerability that, until recent events, has not been fully understood.

While offshoring and acquiring raw materials and products from separate, dominant markets might be a good idea from a financial standpoint, with factories producing 90 percent of the world’s semiconductors and microchips or countries responsible for supplying 30+ percent of the global wheat yields has highlighted the vulnerability and cost of single points of failure in global market conditions.

As a result, many organizations (government and private sector) are weighing the benefits of bringing their manufacturing and supply chain functions closer to consumers in an effort to guard against the inevitable future market volatility.

Nevertheless, there is much more to appreciate about the potential to bring the supply chain and manufacturing processes closer to the consumer than just economic and safety incentives. The onshoring movement of entire manufacturing processes and supply chain networks presents an enticing opportunity for brands to reinvent and reinvent their entire approach to sustainability and eco-friendly products and services from the ground up.

For example, it’s a well-known fact that in the FMCG sector alone, restructuring and implementing a more sustainable approach to packaging chips or juices can cost millions of dollars in both time and technology.

As expensive as it may be, think about it: the chance to implement a whole new stack of technology and processes from scratch (with benefits) is a unique opportunity that most brands will never get. It is an opportunity to build the perfect production methods, supply chains and supply networks that not only meet the demands and expectations of modern consumers, but also ensure that these practices are in line with environmental and sustainability goals.

That’s certainly a prospect that everyone from the CEO to the end consumer can see the long-term value of.

GREENING SUPPLY CHAIN ​​AS IMPORTANT AS SOURCING AND MANUFACTURING

While sourcing raw materials from fair and environmentally responsible suppliers is a key element in providing greener trading options to consumers, it is equally important to recognize the importance of more sustainable supply chains in delivering these types of goods as well – failing to do so amounts to a huge missed opportunity.

Whether it’s Manhattan’s unique approach to three-dimensional cubes (packing goods for shipping and shipping less air); smart use of packaging and dunnage material; empower consumers to make more environmentally conscious purchasing decisions with order fulfillment optimization; or by reducing packaging and shipping less air throughout the supply chain, volume per shipment can be reduced and transportation becomes more efficient, meaning fewer trucks on the road and fewer planes in the air.

It’s a win, win for not only profitability, supply chain efficiency and customer experience, but critically for the environment – another example of how applying ‘smarter’ technology can deliver ‘greener’ results across supply chain networks .

BUILD FOR THE LONG TERM

Global events continue to have a profound and lasting impact on the way we think about global supply chains in terms of resilience and environmental qualities. As brands and governments try to cope with ‘the next’ major event, the idea of ​​bringing production processes, goods and distribution networks closer to home/consumers is gaining momentum.

The key to success for this new strategy lies in the ability of brands to continue to innovate at the supply chain level and deliver the kind of networks and solutions that are not only resilient, smart and reliable, but also agile and responsive enough to deal with changing consumer and environmental needs in the future.

Having the opportunity to start from scratch, away from all the requirements to retrofit solutions and processes into existing business environments (often slowing workflows rather than speeding them up) is something CEOs, COOs, CTOs and supply chain directors around the world.

While the cost of relocating, building new factories and implementing new technologies can impact shoppers’ wallets in the short term, the opportunity to change our whole approach to global trade and the ability to create a green building a store is certainly an opportunity we cannot afford to pass up.

Alex MacPherson

Director of Solution Consulting and Account Management, of Manhattan Associates

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