Heightened environmental focus sees greater supply chain accountability
Written by Richard Tipper, CEO at Ecometrica
Amid accusations of ‘greenwashing’, a growing number of companies are turning their focus to the supply chain in order to ‘clean up’ their operations. Recognising the potential impact of such operations, and the opportunity to engage positively with stakeholders, their objective is to collect and communicate evidence-based environmental data for further interaction and interrogation.
However, as supply chains become ever more complex, a key hurdle remains the measurement of environmental impact and how this can be managed more effectively. New technologies and best practice are now emerging, which is increasingly empowering companies to implement processes and strategies that address such concerns.
Advances in web software technologies are set to revolutionise the ways companies acquire, view and interrogate data, providing access to remotely sensed data. This information allows users to monitor and map key environmental impacts; for example, carbon emissions, deforestation, water scarcity and biodiversity. With data collection, curation, interpretation and display handled by web technologies, users can focus on interrogating and presenting the data, in a similar visual way to Google Maps.
By recognising the environmental impact of its own supply chain and operations, one company making significant progress in this area is Greenergy, a major supplier of road fuel. In a move to track its bio ethanol sources, the company’s Biocarbon Tracker website now provides greater transparency and insight for a wide range of stakeholders.
Beyond carbon, remotely sensed data can open up possibilities for other layers of environmental data, including monitoring water stress, biodiversity impacts and land use change, which could provide near real time impact monitoring.
Planning, as with all supply chain operations, is key to successfully implementing an environmental impact assessment programme. While the individual elements may vary from sector to sector, best practice suggests that a four-stage process, which allows an organisation to define, monitor, act and communicate, will deliver against such objectives.
Company should define the environmental impacts they are looking to monitor, as well as the geographical area of interest. More often than not, this is defined by the supply chain. This is also the appropriate time to review the depth of data required. The detail of such insight, often referred to as the spatial and temporal resolution, will be driven by the need to zoom into details and how frequently the data needs to be updated.
As a rule of thumb, as spatial and temporal resolutions increase, so does cost. Once these parameters have been defined, data layers can be obtained and uploaded to the system, ready for monitoring. For most organisations, the final step in this initial phase is to add the supply chain as a separate layer, so that each part of the supply chain can be viewed and interrogated for associated environmental impacts.
Once live, impact monitoring comes into its own. Such information can be used to review historical environmental performance of the supply chain, in addition to monitoring performance and developments as they happen. As supply chain strategies change or new suppliers come onboard, it may be possible to assess such organisations for their historical environmental performance, as part of the due diligence process, saving time and money.
A deeper understanding of the supply chain means companies can take action to improve their environmental performance, for example, by finding better performing suppliers or working with existing suppliers on new schemes. Such data should also be shared directly with supply chain partners, so that they can review their own performance and how they are being judged by their customer.
With detailed environmental data layers assembled and a wider engagement and understanding of the supply chain, a growing number of organisations are moving towards making such information available to customers and the stakeholdercommunity, thereby allowing them to ‘see the sustainability’. From embedding environmental data in a website, to placing QR codes on products that take customers directly to supply chain environmental maps or even have ‘likes’ on Facebook, they recognise the importance of reaching a wide range of customers, while aiming for a potential ‘viral effect’ to communicating sustainable messages.
The supply chain has a key role to play in building sustainable businesses and significant progress has already been made by many organisations. However with a global marketplace and the spotlight on procurement comes a greater need for insight. Supply chain professionals will increasingly be expected to make better-informed procurement decisions and transform such insight into a valuable communication tool that builds trust with customers. Active monitoring and dissemination of such impacts will play a key role in building successful, sustainable businesses.
Richard Tipper is chief executive of Ecometrica, a global provider of web-based environmental and greenhouse gas accounting software.
Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector