The idea of automotive manufacturers being environmentally sustainable is often met with skepticism, as if the industry is inherently damaging to the planet.
This is reflected in the difficulty automakers have in getting listed in environmental, social, and governance (ESG) stock lists — even Tesla, the premier manufacturer of electronic vehicles, was recently removed for not meeting the standards.
An ESG rating can be the difference between being included in major investment funds and being left out, which has an impact on a company’s stock price and demand.
As a professional who works with automakers, you can help improve the carbon footprint in the industry. Improving the sustainability of the supply chain not only helps your automotive partners, but it can make a big difference in your company’s ecological impact and help catch the eye of eco-conscious investors.
How can you be part of a green supply chain? Here’s what you need to know.
Understand the Full Supply Chain
Every step in the supply chain can make or break a company’s production goals, yet very few truly understand the importance of supply chain management and visibility and their effects on a company’s bottom line.
The first step to making a supply chain more sustainable is to know what role you play in it and where you’re starting in terms of environmental impact. There are several areas to consider: supply and demand, inventory of materials, transportation of both materials and finished goods, and the careful choosing of your business partners.
Fully understanding and improving the portions of the supply chain you impact will help improve the reputation of your business. These corporate social responsibility initiatives help improve the company’s relationships by making you a more desirable partner. As a result, you’ll be both helping the planet and making it easier for your company to grow.
Start With Simple Changes
It’s a good idea to go after the “low-hanging fruit” first. It creates positive momentum in your ESG program, and it helps the company record quick wins that can create positive publicity as well as support from company leadership.
Here are some simple approaches to make your automotive supply chain more green.
Go paperless
Keeping records on paper is inefficient and costs your organization time, money, and environmental impact. It’s also unhelpful because paperwork can easily be misplaced, stolen, or falsified.
Instead, use electronic records that can quickly and easily be shared with relevant stakeholders, including shippers, drivers, suppliers, and more. Everything will move more quickly with less human error, and you won’t be using reams of paper.
What should you do with the paper you already have? Once it’s been digitized, you can securely recycle it. Recycled paper is used in a variety of ways, from building insulation to paper bags to creating kitty litter. That’s far more useful than sitting in your company’s filing cabinets!
Be proactive with maintenance
Machines and vehicles in excellent condition will need less fuel, run more efficiently, and create less waste. When your company is proactive with maintenance, you’ll also catch problems before they become significant and costly.
For example, a logistics company that takes good care of its trucks will avoid downtime, have a more efficient fuel economy, and save money on repairs. All of this adds a lot to the bottom line — and reduces your team’s impact on the environment.
Taking small steps can make a big difference in your immediate environmental impact, which creates support for larger initiatives.
Improving Other Aspects of the Supply Chain
Simple changes are a great place to start, but it’s important to continue to build on those successes. Depending on where you are in the automotive supply chain, you may be able to make the following improvements as well.
Routing improvements
Within logistics, there are many ways to take advantage of smart routing and intelligent process management to reduce the distance goods have to travel between you and an automaker or between your warehouses and customers.
Consider using optimized routing, consolidating shipments when possible, and using intermodal transportation. This helps reduce costs and emissions — a win-win for your company.
Using lower-Impact vehicles
Electric and hybrid vehicles have become both more mainstream and more affordable in recent years. Take advantage of these trends to lower the environmental impact of the vehicles your company uses.
Electric semi trucks haven’t been successfully developed, but your organization uses a lot more than just semis. For example, company cars and last-mile vehicles can be EVs or hybrid to reduce your environmental impact. You can also support the development of large trucks that run on alternative fuel.
These steps will save your company money and help you position yourself as an attractive partner to ESG-minded automakers.
Improve packaging
Packaging can become a behemoth if not carefully monitored. Is each part you ship individually wrapped, and then placed in a small box, and then placed in larger boxes? If so, your company can save money and improve your ecological footprint by reducing packaging.
Lighter packaging is a win for both you and the customer. They have less to dispose of or recycle, and you save money on both materials and shipping costs, since shipments will weigh less. There’s no need to ship empty space — optimizing your packaging helps everyone.
Be Part of a Sustainable Supply Chain
As a partner who works with automakers, you can not only make a difference in the environment but also in your company’s ability to stand out from competitors by adopting sustainable supply chain strategies.
The automotive industry has a lot of potential when it comes to reducing CO2 emissions and other environmental impacts. If your company leads the way, your organization and everyone who shares the beautiful planet will benefit.
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