The best place to reduce your organization’s environmental impact is at the beginning of the process during supply chain planning. Planning with circularity and sustainability in mind significantly advances on targets related to energy use, raw materials use and carbon dioxide (CO2) emissions —and has a ripple effect through production and transportation, where many of Earth’s scarce resources are consumed and harmful emissions are released. According to the United Nations’ Intergovernmental Panel on Climate Change, about one-third of the global CO2 emissions are linked to industry, and 15% are linked to transportation. Together this is almost half of the total CO2 emissions.

Many supply chain planning activities map to sustainability activities and can be a great place to start green initiatives:

• Sales and operations planning aims to align demand and supply for the complete supply chain. This means that decisions are made about when and where to produce what products in the most efficient way. Optimizing this plan can have a positive impact on CO2 emissions.
• Master production scheduling allows for choosing the resources that can produce in an energy-efficient manner when a choice is available. It also can ensure that perishable products are processed on time to avoid waste.
• Production scheduling can help avoid setup or cleaning between different products, which saves energy and cleaning supplies.
• Logistics planning enables companies to optimize routes and the loading of means of transportation to save on energy and emissions.

Put plans into action

Once you have implemented these sustainability initiatives, the next step is to measure your efforts, and this must involve quantifying and measuring the amount of CO2 emitted. Exact measurements of emissions across an entire supply chain can be difficult, so begin by choosing even one or two key points to assess. Some measurement is better than no measurement at all. Note that it is also critical for organizations to put these evaluations into context for executives and map the impacts to organizational goals. This helps leaders understand why both change and dedication to the cause are imperative.

Some circularity and sustainability improvements are a fortunate side effect of other supply chain efficiency improvements; others need to be an intentional choice. This is where supply chain planning comes in. Planners can use software solutions to evaluate the trade-offs between prioritizing a sustainability KPI versus more traditional supply chain KPIs, such as delivery reliability or stock targets. In some cases, a slightly higher purchase price is acceptable in order to save on CO2 emissions. But this begs the question: Where should you draw the line on trade-offs? Should you sacrifice 10% of delivery reliability to avoid energy waste in the production process? Or should you accept any deterioration for this objective?

When making these decisions, you must keep in mind your objective and weigh the pros and cons. And always keep in mind the triple bottom line of people, planet and profit. An effective sustainability strategy measures all three. If a sustainability effort is going to make too much of a dent in profits, for example, to the point that the company will have difficulty continuing operations, then that initiative is not a good fit for the organization.

Florence Verzelen, 3DS’ executive vice president of industry, marketing and sustainability, recommends starting with mapping your carbon footprint and then mapping it to standards like the Greenhouse Gas Protocol. Ideally, companies should set a target not only for their own emissions but those of their suppliers as well. The Science Based Target Initiative can help companies set scope 1, 2 and 3 emissions targets in line with the Paris Agreement. This will give supply chain organizations perspective about how much they need to reduce their emissions to be an environmentally responsible organization. Then, plan from there to support both supply chain efficiency and sustainability.

As you work through your sustainability plan, remember that achieving sustainability is a journey, so celebrate any meaningful progress. And because that progress is propelled by effective supply chain planning, start there.

Carlijn Goedhart is sustainability lead for the DELMIA brand at Dassault Systèmes, responsible for defining the DELMIA sustainability mission in order to enrich the DELMIA solution portfolio.