Responsible logistics is smart logistics

A plethora of current trends reports, together with industry experts and academics all point to digitisation as the single key trend that will transform business models and supply chains over the next 5 to 10 years. Our last supplychainforesight publication served to highlight this by examining some key trends emerging within this arena. There is, however another transformation taking roots amongst consumers, companies and industries at large – a trend that challenges the very nucleus of organisations.

In the past, business’s sole purpose has been the creation of value, most often in the form of profit, for its stakeholders. This drive for value created a relentless focus on efficiencies designed to extract maximum profit, often with little understanding of the long-term impact of such decisions.  This way of operating is shifting in line with the megatrend of responsible and fair consumerism supported by responsible and fair business. Consumers are beginning to expect a broader definition of value before purchasing a product. A secondary value consideration is augmenting individual value (e.g. Does this couch look good in my lounge?), is being tested against societal value (e.g. Is this furniture made from sustainable material and was it manufactured under fair working conditions?). This broader definition of value is demanding that organisations supplement their products’ intrinsic consumer value with the larger understanding of value as required concerning responsibility, sustainability and fair practice.  This type of business model certainly provides environmentalists cause for celebration, as more and more organisations turn to sustainable sourcing, manufacturing and transportation of their product.

In this changing world, the supply chain is at the very centre of creating sustainable business practice. The conundrum lies in the resource heavy nature of the logistics industry versus the importance of its services in enabling the global market place. Responsible supply chain organisations have long recognised their significance, and impact, and as such have already adopted sustainable business practices. Barloworld Logistics transport division travels thousands of kilometres per year to move freight across Southern Africa and as such have implemented a variety of measures to reduce their carbon footprint and improve the working conditions of their drivers, in the pursuit of not only sustainable business but fair labour practices.

According to the report ‘Fair and Responsible Logistics” report, the supply chain industry has a role to play in the following three areas;

1. Circular economy – key to the sustainable use of resources is the concept of renewing, reusing and recycling. Within the local economy, SmartMatta’s philosophy of zero-waste-to-landfill champions the notion that a product's end-of-life does not necessarily mean its end of use. The reimagining of resources, transforming them back into viable raw material is at the very heart of creating a circular economy that supports sustainable business.
2. Creating fair access – in its very basic form, logistics is all about putting product in the hands of people. By creating innovative solutions that support both small business, and rural trade, smart supply chain organisations facilitate fair access to resources throughout a region. A tangible example of this is the service offered by our Temperature Control Solutions division, whereby single item orders can be delivered to small or informal traders to support their cash flow and maintain their inventory levels on a daily basis.
3. Transparency - smart reporting on every aspect of a supply chain allows for the communication of, amongst other things, product handling, working conditions and environmental impact at every leg of a product's journey from source to consumption. Open and honest measurement of factors such as carbon footprint and employee working conditions within warehouses or vehicles allow clients to provide reliable information to end consumers regarding the origins and handling of each product throughout its lifespan.

Responsible, sustainable business is about far more than contributing cash injections to the society in which one operates. It is a holistic view of the impact left behind from every business practice – from the sourcing of raw material to the workforce deployed and the manner in which goods are ultimately transported. The key to end-to-end transparency and fair business practice is to align with a supply chain organisation which not only holds these values as paramount but collaborates at each step to build businesses that create shared value for all stakeholders.

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