A Guide to

Sustainable Supply Chain Management

Sustainable supply chains are more than just a trend—they’re a necessity for safeguarding our planet while maintaining economic and social well-being. With over 90% of the environmental impact from consumer goods stemming from supply chains, businesses must prioritize ethical and eco-conscious practices at every stage, from sourcing raw materials to final delivery and disposal. By integrating strategies like reducing carbon emissions, promoting fair labor practices, and embracing closed-loop systems, organizations can minimize their environmental footprint, support communities, and drive long-term financial success. Explore how sustainable supply chain management works, the challenges and benefits, and real-world solutions like iGPS’s closed-loop pallet pooling model to transform your operations into a force for good.

What is a Sustainable Supply Chain?

The constant flow of goods and services along the supply chain is what keeps modern civilization going. Yet, more than 90 percent of the impacts on the air, soil, and land caused by consumer products is the result of the supply chain, and more than 80 percent of a consumer company’s greenhouse gas emissions also come from its supply chain. The endless harvesting of natural resources and the waste products entering the environment at the end of the supply chain are a threat to the planet and its inhabitants.

This is why it is important for organizations to aim for creating a sustainable supply chain, which makes transparency as well as ethical and environmentally responsible practices a priority — from sourcing raw materials, to manufacturing, to delivery and disposal. These green supply chain best practices include reducing waste, lowering carbon emissions, promoting fair labor practices, and prioritizing social responsibility.

Three Components of a Sustainable Supply Chain

A green supply chain is comprised of three primary components:

Economic Sustainability:

This component focuses on the long-term financial viability of the supply chain. Its tenets include cost-efficiency, risk management, efficient procurement, and ensuring fair compensation for all stakeholders. But profits and economic success are meaningless unless the other two pillars, which prioritize the environment and society at large, play a large role.

Environmental Sustainability:

This component is focused on mitigating the negative environmental impacts of the supply chain, which if unchecked and unmonitored can be incredibly detrimental to our natural resources and habitat. An environmentally sustainable, green supply chain is aimed at reducing waste, conserving natural resources, and promoting eco-friendly practices throughout all supply chain operations.

This vital component focuses on ethical considerations, including the overall well-being of the people involved in the supply chain. Key priorities include fair and equitable labor practices, safe working conditions, and a positive social impact on local communities.

How Sustainable Supply Chains Work

Sustainable supply chain management integrates ethically and environmentally responsible practices throughout all supply chain operations, from sourcing raw materials all the way to the delivery of the final product. Success depends on several best practices:

Establishing Clear Sustainability Goals and Standards

Effective Sustainable Supplier Selection and Engagement

Sustainability-focused Product Design and Lifecycle Management

Efficient Logistics and Transportation Planning

Continual Monitoring and Reporting

Adherence to these principles is not without its challenges. Implementing sustainable supply chain practices can involve additional costs and increased overhead. Sustainable supply chains are typically more complex, requiring coordination and close collaboration among a variety of stakeholders. The need for increased transparency means that sustainability practices must be carefully tracked and monitored, which requires resources and effort, and measuring success can pose difficulties.

But the benefits of following these best practices are undeniable. The minimization of greenhouse gas emissions and waste reduces an organization’s environmental footprint, and promoting fair labor practices creates a more positive social impact. While sustainability efforts can have more up-front costs, efficient resource management and optimized logistics over time actually leads to an overall lower Total Cost of Business. And creating a sustainable supply chain can also minimize supply chain disruptions and regulatory challenges while improving an organization’s overall brand image and reputation.

The Importance of Reusability and Recycling

The most obvious challenge of creating a sustainable supply chain is the size and complexity of the modern supply chain. Billions of waste streams must be aggregated at a centralized location to produce usable recycled materials in profitable amounts. But the challenge does not end there. Waste streams, especially consumer waste streams, often mix materials and these must be grouped by type to be recycled. Commonly recycled materials include:

Paper

Cardboard and paper products are easily recycled, but paper products need to be sorted by their coarseness. For instance, printer paper, packaging paper, and cardboard streams need to be separated for recycling. Paper product fibers also shorten with each recycling and can only be recycled five to seven times before the fibers become too short.

Glass

Glass can be recycled over and over again without degradation simply by melting the glass down; however, there are many different varieties of glass. Window glass is different from that used for beverage bottles and glass items must enter the correct recycling stream to be reused.

Steel

Steel, like glass, can be recycled over and over without losing any strength. Recycling steel requires less energy than mining and refining ore, meaning that recycling steel can significantly reduce carbon output.

Aluminum

Aluminum can also be recycled a limitless number of times. Like steel recycling, aluminum recycling offers significant energy savings over extracting and refining raw ore. It is also a much less expensive process than refining aluminum from raw ore.

The Problem of Plastics in Sustainable Supply Chain Management

The term plastics encompasses a wide range of materials, all of which have different chemical formulations, different molecular structures, and different properties. These different types of plastic also have varying levels of recyclability.

Despite the difficulties of recycling plastics, it’s important for any business interested in implementing sustainable supply chain management practices to implement sustainable sourcing and to reclaim and recycle plastics, or to develop packaging that is more easily recyclable. That’s because plastics do not break down into their constituent chemical elements. Instead, they break down into smaller and smaller bits of plastic called microplastics, which can enter into the food chain and are damaging to the ecosystem as a whole. Degrading plastic also releases methane, a greenhouse gas with substantially more warming potential than carbon dioxide.

For these reasons, recent interest in closed-loop, sustainable supply chains is largely concerned with finding ways to keep plastics out of the environment. Fortunately, iGPS has the answer.

Improving Supply Chain Sustainability With iGPS

Among the easiest ways to begin developing a sustainable supply chain is to take advantage of closed-loop models that already exist, using more environmentally friendly materials. Pallet pooling services, such as those provided by iGPS, are a good example. iGPS manages a robust nationwide network of shipping platforms that support the supply chain. When one company is done with an iGPS pallet, iGPS or a member of its retailer partner network inspects the pallet and provides it to another customer nearby. It is one of the most efficient circular business models currently in place and allows shipping pallets to be reused dozens of times while minimizing empty transportation legs. Pooled plastic pallets make this model even more environmentally friendly, since plastic pallets have several sustainability advantages over pooled wood pallets.

Plastic pallets made of HDPE plastic can be created directly out of recycled plastic packaging, providing one way to keep plastic out of the environment. Because of the strength, durability, and longevity of high-quality plastic pallets, plastic pallet pooling is perhaps the best example of a closed-loop supply chain system currently in practice. This model proves that plastic can be sustainable if properly used.

Durability

iGPS plastic pallets are more durable than wood pallets and can make 100+ trips through the supply chain in their lifetime (actual, not lab-tested). Reusable wood block pallets, on the other hand, have a usable lifespan of about 20 to 25 trips before they are recycled or most often discarded.

Reduced Product Damage

The greater durability of plastic means no splinters, broken boards, or loose fasteners. This translates into fewer opportunities for product damage and load rejection. Fewer wasted products mean less waste overall and fewer products needed to fulfill orders.

Lighter Weight

iGPS plastic pallets are up to 35 percent lighter than wood block pallets and therefore reduce the fuel needed to transport products. Since iGPS operates a closed-loop plastic pallet pooling model, there is no need to worry about plastic escaping into the environment.

Recyclability

When a plastic pallet is at the end of its natural life, it can be ground up, melted down, and turned into a new plastic pallet. Plastic pallets provide a rare example of true cradle-to-cradle recyclability.

The iGPS pallet pooling program rents out durable and recyclable plastic pallets that help companies build a more sustainable supply chain.

Frequently Asked Questions

What are examples of sustainable supply chains?

One example of a sustainable supply chain is Patagonia, an outdoor clothing company.

They prioritize sustainable materials like recycled polyester and organic cotton, and they work with suppliers who adhere to fair labor practices. Patagonia also focuses on transparency, regularly disclosing information about their supply chain to the public.

Another example is the closed-loop, plastic pallet pooling model provided by iGPS. iGPS plastic pallets are lightweight, recyclable, and more durable than wood, and the company’s closed-loop model of pallet fulfillment minimizes empty transportation legs from the supply chain.

How can we make supply chains more sustainable?

To make supply chains more sustainable, businesses can prioritize sustainable materials, ethical sourcing, and local sourcing. They can optimize transportation routes, use sustainable transportation modes, and reduce packaging waste. Additionally, designing products for durability and recyclability, extending product lifespans, and implementing closed-loop systems can contribute to a more circular economy. Finally, leveraging technology, collaborating with suppliers, and promoting transparency can further enhance supply chain sustainability.

What are the key elements of a sustainable supply chain?

A green supply chain is comprised of three primary components. Economic sustainability focuses on the long-term financial viability of the supply chain. Environmental sustainability is focused on mitigating the negative environmental impacts of the supply chain, which can be incredibly detrimental to our natural resources and habitat. Social sustainability focuses on ethical considerations, including fair labor practices and the overall well-being of the people involved in the supply chain.