There is a blue ocean opportunity in sustainable freight right now, and yet no one seems to know about it, writes Paul Soong.
In a tumultuous world, technology is the essential enabler for businesses in New Zealand to not just survive and compete, but to innovate and disrupt. It’s the key to navigating ever-increasing market challenges. It enables sustainability and green strategies. And it is gifting freight, distribution, and logistics companies throughout New Zealand, the opportunity to become sustainable freight integrators, taking on the global giants.
But do these businesses know the opportunity exists? And do they realise the huge business opportunities by offering a one-stop, simple and seamless solution where sustainability is maximised at every stage along the line?
With the right supply chain management technology, a business can orchestrate – and pivot – the entire process, seamlessly, in real time. Horizontal supply chain integration facilitated by supply chain management software is effectively paving the way for end-to-end sustainable freight – something very difficult to achieve when trying to align multiple providers, frequent challenges and ever-changing requirements.
What does it mean to be green?
The private sector is a key stakeholder in finding a balance to live within planetary boundaries. This is especially true for the world’s manufacturers because they build the stuff that keeps the global economy going. The catch is consumers no longer want to buy just any stuff. Consumer demand for sustainable goods has grown exponentially in recent years, putting enormous pressure on manufacturers.
Sustainability is rated as an important purchase criterion for New Zealanders. The Global Sustainability Study 2021 (Simon Kucher & Partners) of more than 10,000 people across 17 countries, identified 85 percent of people have shifted their purchasing behaviour to being more sustainable over the past five years. Thirty-two pervent of millennials significantly changed their behaviour towards being more sustainable and one third are choosing a sustainable alternative when available.
“Proactive businesses that successfully navigate the various external pressures and lean into the sustainability demands of their consumers will get ahead of the game and capture significant market share.”
With this in mind, it’s clear that those who don’t incorporate sustainability as part of their core value proposition will feel the impacts in terms of both reputation and revenue in the future. Proactive businesses that successfully navigate the various external pressures and lean into the sustainability demands of their consumers will get ahead of the game and capture significant market share.
Getting to the core
In the same way those nations are making net zero pledges and setting ambitious emissions reduction targets, so too are companies in the private sector. And just like their public sector counterparts, the devil is in the detail when it comes to visibility, reporting and compliance regarding carbon emissions and water use for manufacturers. While achieving net zero on a manufacturing facility sounds impressive, and is an important step, it doesn’t leave much of a mark for manufacturers in terms of their actual environmental footprint.
Sustainability-leading companies have long published life cycle analysis (LCA) reports that assess the full end-to-end footprint of their products. The visibility that comes from the LCA reports is an essential part of making meaningful change. However, few outside sustainability circles understand the implications of these assessments. Most people fail to grasp that direct manufacturing operations only account for a few percentage points of the total footprint for large manufacturers. Most of the footprint is hidden within indirect supply chain activities and consumer use. In fact, 95 percent of the footprint of many manufacturers comes from global supply chains or waste from their products. As such, any sustainability program that fails to consider the full footprint of the end-to-end supply chain is missing the mark.
Think and act green
In the end-to-end supply chain, there are many opportunities to remove structural waste and improve productivity and service, while at the same time reducing carbon footprint. However, implementing technologies does not mean businesses necessarily receive the green tick of approval. Transforming a business into a sustainable one must first and foremost begin with setting green KPIs to ensure a business is prepared with measured and defined plans in place. Businesses can then use technology where it best fits and know that their expenditure towards sustainability is not being wasted.
Planning, measuring and reporting carbon emissions related to supply chains is just the first step. ESG capabilities also lay the baseline to assess your footprint and an ongoing measure to track against net-zero commitments or regulatory compliance. Integrating these standards across all operations will give New Zealand businesses the leg up to act now, helping to make more effective business decisions over their financial, service and environmental barriers. Looking to the future, this is about more organisations utilising the innovation available to them, to create greener supply chains and seize this blue ocean opportunity.
Sustainability-focused technology like this complements existing global emissions tracking capabilities in its transportation management solution, empowering users to actively lower their greenhouse gas footprint when planning or moving goods. This capability will compel more organisations to act now, helping to make more effective business decisions to achieve their financial, service and environmental goals. Looking to the future, this is about more organisations utilising the innovation available to them, to create greener supply chains and allow New Zealand to take that extra step towards a sustainable society.
Paul Soong (pictured below) is regional director ANZ of connected supply chain platform e2open, and has more than 20 years’ experience providing sophisticated solutions in supply chain, mobility, business intelligence and cloud. Paul is passionate about driving efficiency and innovation in supply chain through technology and helping industry transform into a customer-centric focused one.
E2open helps the world’s largest companies transform the way they make, move, and sell goods and services. E2open’s SaaS platform anticipates disruptions and opportunities to help companies improve efficiency, reduce waste, and operate sustainably.