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Manufacturing Industry Updates

Why Sustainability Will Matter Post-COVID-19

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Sustainability has become an increasingly important issue for manufacturers, especially over the last few years. These changes have been driven not only by the recognition that it can result in a better balance sheet, but also help a company comply with advancing regulations and respond to changing consumer preferences.

Due largely to younger consumers’ eagerness for enhanced education around how eco-friendly their products are, companies have had to improve supply chain techniques and visibility across the board. The impact of COVID-19 — and the risks and additional safety requirements inherent in dealing with a global pandemic — has placed an even greater importance on supply chain visibility. It has also accelerated many manufacturers’ plans to optimize their supply chain processes.

However, while these plans may have been moved forward, manufacturers still need to ensure they are examining and optimizing their supply chain completely to best meet the changing demands and needs of their customers — and an important part of this is sustainability.

According to a market report conducted by Sage and IDC, to achieve excellence over the next 1 to 3 years, manufacturers are placing a heightened priority on supply chain optimization. This includes modernizing and updating IT-related operations infrastructure, improving traceability and predictability and reducing cost through waste elimination.

While we continue to operate with great uncertainty, many companies are realizing they need to act now. The actions and investments they make now will provide them with a competitive advantage in the future via improved supply chain efficiency and customer satisfaction.

When it comes to enhancing sustainability within their supply chains, the report shows that manufacturers already plan to target a number of major issues: product recycling (73%), enacting low/no-emission internal logistics (65%) and implementing a low/no-emission internal supply chain (61%).

With sustainability becoming an increasingly important buying decision for customers, being viewed as an industry leader in this field will be important. In order to enhance a supply chain so that it’s not only ecologically sustainable, but also meets the current expectations of customers, manufacturers should look to two key guiding principles.

Go Above and Beyond Existing Regulations …

… and continuously measure improvement to mitigate risks and build on previous enhancements. Consider how to move past a pass/fail criterion and become an ever-evolving organization wherein sustainability isn’t an endpoint, but rather a journey.

Although current regulations stand as a useful guide and need to be complied with, customers also expect companies to go above and beyond when it comes to sustainability. This means that embracing a more adventurous commitment to sustainability may not only provide a competitive advantage, but it also means you won’t be caught off guard by potential future expansions in environmental regulations. By ensuring sustainability isn’t viewed as a one-time pass-fail test, manufacturers can ensure they are better positioned to enhance the consumer experience and improve processes and production internally.

Be Transparent Both Internally and Externally …

… and take on corporate accountability readily. Traceability increases internal visibility into a supply chain and where there might be disruptions or potential issues. But it also increases external visibility into where corporations may have cut corners and are at fault for such consequences.

As such, corporations will need to be accountable for their actions and practices and be nimble enough to tweak processes continuously. Luckily, modern systems are effective in showing where goods originate and how they move through the supply chain so that sustainability risks can be continuously identified and investments made to address them.

A large part of recovery from COVID-19 lies within the ability of corporations to act responsibly and meet the changed needs and circumstances of their customers. Improving sustainability is an important element in both of these, making it a crucial avenue for continued success among manufacturers.

Additionally, not only does optimizing visibility and sustainability processes help lessen your company’s environmental footprint, but it also helps better prepare for future potential crises. This makes it an advancement the whole industry can get behind.

Mike Edgett is U.S. product marketing director, medium segment, for Sage. He has 20+ years of experience in leading business strategy for brands such as Infor, Quaker Oats and Bunge Foods.

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