Sustainability and the supply chain

by Maria Ferrante; PMMI
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Sustainable supply chain
Suppliers work with manufacturers for a more sustainable supply chain.
 

KANSAS CITY — Many manufacturers cite supply chain as the most difficult part of their business to make sustainable, but it is also one of the most important. Sustainability not only has the attention of consumers looking to be environmentally responsible but can bring significant business benefits as well.

A sustainable supply chain is no longer just an optional nice-to-have, it’s a business imperative, critical to the success of baking and snack food manufacturers, according to a study done by global consultant, Accenture. By working with suppliers to develop a more sustainable supply chain, manufacturers can cut costs, manage risk better, generate new sources of revenue and boost the value of their brand.

The report cites examples of food and beverage companies achieving significant savings when implementing sustainable supply chain practices. One leading beverage company saved in both fuel consumption and CO2 emissions — more than 1.4 million liters and 3,900 tons, respectively, in one year alone — when it boosted the efficiency of its truck fleet by engaging in a shared logistics exercise with other companies.

In order to achieve these types of gains, sustainability needs to be more than just a box-ticking activity. Bakeries need to identify opportunities for business improvement and bring their suppliers onboard. Collaborating with suppliers to drive mutual benefits is the way to achieve supply chain success.

But how can you be truly sustainable if your suppliers — the raw material producers, component providers, transport and logistics services and other interconnected businesses that make up the supply chain — aren’t?

The 2016 Food Packaging Trends & Advances report produced by PMMI, The Association for Packaging and Processing Technologies, identifies five common trends in the area of sustainability. In each of these areas, baking and snack manufacturers can work with suppliers to take steps forward on the journey to a more sustainable supply chain:

• Make packaging easier to recycle — While respondents estimate this to be 95% to 99% achievable, the challenge lies in consumer acceptance. Retailers are pushing manufacturers to label products with “how to recycle” instructions on the packaging. The industry needs to also use recycled aluminum and steel.

• Waste reduction — New equipment evaluation should consider waste generation.

• Weight reduction — Work with suppliers to simplify multi-layer structures and eliminate excessive packaging.

• Improving carbon footprint — Reduce water, fuel usage, electricity through waste recovery and usage, use of alternative fuels in the supply chain.

• Use of biodegradable packaging — Attainable, although not likely while the price of oil remains low.

Food companies already feel pressure to take their sustainability efforts further, according to the PMMI report. Four common considerations include:

• Shifting a higher percentage of products from rigid to flexible packaging.

• Moving to thinner gauge plastics, without compromising the integrity of the package. This is especially problematic for food manufacturers that use bags as their primary packaging format, such as bread companies, which tear at thinner gauges.

• Reducing total cost of ownership (TCO) by reducing packaging weight and buying more local.

• Moving to more automated machines to reduce labor and produce more packages at a time.

Moving to a more sustainable supply chain requires collaboration with suppliers. Here are a few steps to consider:

• Map your supply chain — Inventory your suppliers, learn what sustainability practices they have in place and ensure they align with your goals.

• Communicate expectations — Establishing and communicating expectations through a supplier code of conduct is a critical step in involving suppliers in your sustainability efforts.

• Baseline supplier performance — Once you have established supply line partners and communicated expectations, collect data from them through a simple benchmarking questionnaire. This will provide a way to identify areas for improvement.

• Develop training and capacity building programs to keep all suppliers aligned with your efforts.

• Drive performance improvement by rewarding suppliers who help you achieve goals.

• Join industry collaboration — Look to groups such as the OpX Leadership Network, an industry group convened by PMMI, established to solve common operational challenges. The group published a Sustainability Journey Resource Guide available for download.

For baking and snack food manufacturers seeking to develop a more sustainable supply chain, plan to visit PACK EXPO Las Vegas 2017 (Sept. 25-27; Las Vegas Convention Center). The show serves as the largest event in North America for packaging, featuring The Reusable Packaging Pavilion, sponsored by the Reusable Packaging Association. This pavilion is the hotspot to learn how to reduce waste, cut costs and gain supply chain efficiency.

Co-located with Healthcare Packaging EXPO, the show will feature solutions from more than 2,000 exhibitors and will be attended by 30,000 packaging industry professionals. Learn more, and register, at www.packexpolasvegas.com.  
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