In today’s world, environmental consciousness is not just a trend but a moral imperative. Businesses across the globe are held accountable for their impact on the environment. To reduce the negative impact of a business.
India, a nation with one of the world’s largest supply and logistics sectors, presents both challenges and opportunities to foreign companies. Most foreign businesses rely on India for its expanding economy, increasing consumer demand, and multi-folded supply network.
However, as the global sustainability concern continues to intensify, foreign companies are seeking effective ways to transform the conventional supply network into a resilient supply chain in India.
This comprehensive overview unfolds several ways to create an eco-friendly supply chain for foreign companies in India.
How to Build Supply Chain Resilience and Sustainability in India?
A sustainable supply chain refers to the entire business process, from extraction of raw materials to product disposal or recycling, with zero negative environmental and social impacts. Take a look at 7 top global companies’ green logistics solutions:
● Reduce Transport and Logistics Emissions
Transportation of the supply chain in India heavily relies on fossil fuels. Being a non-renewable energy, fossil fuel stands as the primary source of greenhouse gas emissions. Therefore, reducing transportation emissions is vital for a green supply chain in India.
Foreign companies can streamline their material orders more effectively. For example, by making one large order instead of multiple smaller ones, they can decrease the number of transportation methods needed, which helps cut down on emissions. Additionally, they can enhance their supply chain networks to facilitate a more efficient flow of goods, minimizing unnecessary trips.
Companies handling their shipping can cut emissions by shifting to clean energy sources. Employing transportation modes that use Hydrogen, electro fuels, and fuels can be great alternatives to create a sustainable supply chain.
While outsourcing distribution, foreign companies should opt for eco-friendly partners and consider less-than-truckload shipping as it combines shipments from different clients. This approach maximizes space and decreases each client's emissions, unlike full-truckload shipping, which reserves entire trucks regardless of load.
● Make Sustainable Choices in Sourcing Materials
A sustainable procurement policy helps companies make eco-friendly choices when buying materials and products. This includes using recycled materials instead of plastic, supporting local products, and ensuring the fair treatment of workers.
For instance, companies should only work with suppliers that avoid child labor and sweatshops. To implement these policies, many companies often ask about the sustainable practices of suppliers when selecting them.
They can track this information using tools like vendor management systems to understand the sustainability score of a supplier.
● Collaborate with Companies Dedicated to Sustainability
Companies can work together to improve sustainability in their supply chains. A group of manufacturers might set human rights standards for their suppliers, helping to prevent harm and reduce regulatory risks while building consumer trust. This can also encourage suppliers to adopt sustainable practices.
Collaboration at the same supply chain level is called horizontal collaboration. For instance, two nearby furniture manufacturers may combine orders with the same wood supplier to cut CO2 emissions.
When companies at different levels collaborate, it is known as vertical collaboration. For example, a manufacturer might partner with a supplier to create eco-friendly packaging in exchange for more business.
● Improve Supplier Relationship Management
Foreign companies aiming to reshape their logistics should strengthen supplier relationships and focus on compliance, considering potential hidden issues. Like a manufacturer, sourcing textiles might unknowingly support fossil fuel use in synthetic fibers.
To enhance supply chain transparency, companies should ask important questions during audits and conduct on-site inspections. They can also use software to trace product origins and monitor production and shipping processes.
Supply chain management software can identify a product's source, its material supplier, and the supplier’s sustainability efforts. Furthermore, outsourcing a consultancy can also help to improve transparency in the supply chain.
● Increase the Use of Renewable and Recyclable Materials
Recycling is essential for a circular economy, which focuses on sharing, repairing, reusing, and recycling products. This approach saves natural resources and reduces landfill waste that emits greenhouse gases. Recent studies have shown that 7.2% of the global economy was circular in 2023. Though it is gaining popularity, it is still falling short of action.
Foreign businesses can support this economy by using recycled materials like textiles and plastics. Manufacturers can melt metal scraps to make new products, while retailers can sell clothing made from recycled fabric.
Moreover, companies can rely on renewable materials, such as bamboo and cork, instead of nonrenewable ones like metals and fossil fuels to run sustainable logistics in India.
● Invest in Green Technology
Green technology comprises tools to reduce a company’s negative environmental and social impact on the environment and society. Businesses can install solar panels to generate renewable energy and incorporate wind turbines, LED lights, and plant-based packaging in their regular operations. Investing in electric trucks and buses also contributes largely to the zero-emission goal of foreign nations.
● Measure Sustainability Performance
Companies who are willing to enhance their supply chains’ sustainability in India might consider improving their metrics to succeed. They can use tools to assess the current performance, set a benchmark, and tailor a plan pinpointing areas that require improvement.
They can run a weekly or monthly report to understand the progress of their Indian supply chains to meet sustainability goals. Regular reporting not only improves efficiency but also helps in identifying the bottlenecks.
As India becomes a key player in the global economy, foreign companies must reshape their logistics and supply chain strategies to be competitive. Creating an eco-friendly and resilient supply chain in India is essential.
Tecnova provides comprehensive supply chain solutions that enable foreign companies to implement sustainable and resilient logistics in India. They focus on optimizing transportation networks, sourcing eco-friendly materials, and incorporating renewable energy and green technology to minimize environmental impact.
With extensive industry knowledge, Tecnova supports businesses in ensuring supplier compliance, adhering to regulations, and utilizing digital tools for enhanced transparency and efficiency. By taking advantage of Tecnova’s strategic insights, companies can improve their operations, lower emissions, and create a sustainable, future-ready supply chain in India.
References
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Managing Supply Chain Risks for Foreign Companies
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