Sustainable supply chain transformation is ongoing, and the question is not ‘íf’ but ‘how’ companies plan to reduce their environmental footprint. Business leaders across the globe must recognize that improving the logistical flows will not only benefit the planet but also improve the bottom line and bring in more revenues. Sustainable solutions are a path toward sustainable growth. Many companies have already considered sustainable initiatives, but without data backing up the plans, it might not be possible to justify the investment or quantify the impact of the changes. How do you then deliver a realistic change in your logistical flows supported by quantified data to validate the success of your initiatives? Charles de Muizon, Sustainability Director at Nefab, has some insights to share. Read on to find out how Nefab’s proven initiatives helped its global customers reduce cost and environmental impact.
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Nefab’s Sustainability Director Charles De Muizon about GreenCalc™ and its role in the Sustainable Supply Chain Transformation
Q1: What would you recommend to customers who are still unsure where to start their sustainable transformation? What would you recommend as a first step?
Think big but start small. Validating pilot cases is often a good starting point. Understanding where you are and the impact of your packaging and logistics on the environment. Only then will you be able to identify areas for improvement, choose the right partner, decide the goals and targets, and consequently run successful initiatives. Logistics departments should have a voice when it comes to saving resources. Business leaders must understand that packaging directly impacts their company’s finances.
The safest and easiest way is to work with a trusted tool to track and quantify all financial and environmental data related to packaging and logistics in customer’s supply chains. Whatever the considered flows - Internal, Inbound, or Outbound - analyzing through a total approach to redesign the packaging solution can help businesses reduce indirect costs such as handling and packing time, product protection, waste management, and transport costs. In a nutshell, this is what Nefab’s GreenCalc tool can do.
Q2: What do you see as the biggest challenge in implementing sustainable practices in supply chains?
After analyzing hundreds of customers’ business practices, I can safely say that the biggest challenge lies in the internal struggles related to prioritizing initiatives involving packaging. The management board often does not see packaging as a potential factor in improving their supply chain. The common myth that packaging is a transportation commodity and not much can be done about it is still quite strong. As a result, the companies are losing time and resources without knowing the impact the packaging has on their business, its total weight during shipment, or even its location in real time.
Q3: How GreenCalc™ can help with overcoming these challenges and how did the idea came to be?
To understand this story, we must go back over a decade. In 2011, a group of five people called ‘the Green Team’ at Nefab was hard at work to help customers understand the environmental impact of their packaging and how to decrease it. We realized then that we have a lot of valuable data that we cannot present to customers in an easy and actionable way. The Team experimented with different solutions, but nothing felt quite right. Hence, they eventually developed a simple tool with a user-friendly interface underpinned by a solid methodology to consolidate the data from different sources. This is how GreenCalc™ was born.
Since then, we have been supporting thousands of clients for over a decade in their transformation to more sustainable supply chains. Most fear that the change might come with a hefty price tag. The truth is this is not the case, and we can prove it. Our angle is to provide the “good” data to make informative, environmental, and financial decisions. By analyzing customers’ supply chains using Life Cycle Analysis tools (also called LCA), like GreenCalc™, we can tell them exactly how much CO2-eq emissions and money they spend using their existing solutions. GreenCalc™ then leverages the data and optimizes different aspects of the packaging, such as the size, weight, mode of transportation, etc., to find the most resource-friendly solution. It all boils down to quality data, robust methodology, and quantitative impact. The latter is significant when it comes to non-financial reporting regulations that force companies to provide tangible proof that they are really committed to change. Brand perception is another thing to keep in mind. The LCA is only a first step. Nefab supports customers in their transformation process, overviews the implementation and finally, compares the actual real-life savings of their incumbent and new solutions.
Q4: Looking back at 2011 and now, how the supply chain industry changed its approach to sustainability?
From my perspective, I see three noticeable changes. The first one is in the customers’ mindset. The climate crisis has become a non-negotiable fact, we see the world changing with our eyes. Temperatures are rising worldwide, draughts are spreading in more geographical places and are intensifying and more extreme, and weather events such as tropical storms or floods are increasing in severity and frequency. This increased awareness created a lot of emotional distress, which, in turn, pushed the global sustainability trends. The regulators are coming up with new laws to nudge a change in behaviors at scale. And this is the second noticeable change: more actionable regulations to limit waste and CO2-eq emissions. Last but not least, the growing consumer awareness pushes the leading companies to make critical decisions that affect the entire supply chain. Amazon, for example, decided to phase out certain types of plastic in their packaging, and this change will then trickle down their whole supply chain.1 Companies are leading the change and making decisions that affect the entire business ecosystem.
On a positive note, more and more companies are analyzing their footprint. In fact, till 2021 Nefab performed over 4000 LCAs which resulted in 30% savings on average for customers’ from various sectors. This major shift happened in just over a decade and looking at the demand, the trend will keep growing.
Q5: What do you hope the future holds for global supply chains?
I envision a fully connected supply chain – a one network with traceable packaging solutions that tell you exactly where your product is and whether it’s transported in the most optimal condition to ensure its safety. Connectivity will allow us to have fully circular and optimized packaging solutions to avoid unnecessary waste and lower the overall transportation cost. Cross-industry collaboration is imperative to make this vision a reality. We have worked with companies from different sectors to foster circularity. One powerful example of how resources can be saved is Nefab’s wooden crate. It can be used multiple times in logistics loops until it breaks, and once it does, the wood waste is sold to IKEA to be used as a furniture material. The future will be waste-optimized, where businesses share returnable and reusable solutions to save resources.
Q6: If you could send a direct message to the global business leaders, what would it be?
You need to align business goals with sustainability vision today to quantify savings in terms of circularity tomorrow. As the world moves towards carbon neutrality, sustainable packaging and logistics solutions are an engine for growth. Not just any solutions, though. Those that are smart and guarantee environmental protection and economic growth.
Look at different ways to achieve a sustainable future – for example, by creating a fully connected supply chain to make it more circular, using the optimal material for the proper flows (avoid single-use materials), and measuring and analyzing your data to prevent empty claims. The time to act is now, we can’t afford to lose this game for the sake of future generations.
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