We hope you’re not getting sick of hearing about sustainability because as you probably already know, it’s something we’re all going to be hearing about for decades to come. We know that a worldwide and coordinated effort is needed to address the damaging effects of climate change, which means sustainability measures are a huge consideration for every industry, especially when it comes to transportation. MIT has been conducting an annual report on Supply Chain Sustainability (SCS) since 2019, and they have recently released their 2022 issue. You can access the full report here, or read below for our main takeaways.
BACKGROUND
This year’s report collected data from a larger group and more diverse audience, with surveys offered in Spanish, English, and Mandarin Chinese. There were over 3,300 respondents and 15 executive interviews performed. The responses are broken up by percent from each region:
In order to ensure the data MIT collected was as clean as possible, they have a general definition for SCS which they share with all survey respondents. “We define supply chain sustainability as the management of environmental and social impacts within and across networks consisting of suppliers, manufacturers, distributors, and customers in line with the UN Sustainable Development Goals. This spans every phase of the supply chain, from raw material sourcing and extraction to product use and end of product life.”
The last three years of reporting from MIT show that supply chains today need strength and flexibility to navigate extreme changes, and the same can be said for SCS. “As one of the executives interviewed for this year’s report commented, customers want to buy from companies that are investing in, and are committed to, SCS.” With that in mind, let’s dig into some of the findings and uncover what that means for the world of transportation as we know it.
GENERAL TAKEAWAY
The good news is, the importance attributed to SCS continues on an upward trend- it has not lost momentum. 2022 showed that the most positively impacted sustainability marker is that of climate change mitigation, with a 12% increase in focus in the last year alone. Supply chain circularity and biodiversity conservation were close seconds. The adoption of technology and practices to support SCS goals also appears to be on the rise.
While it is encouraging to see that SCS is receiving more support, this doesn’t mean the necessary investments are being made. In fact, as has been the case in previous years, 2022’s reporting showed that goals ranked more highly than actual investment, not surprisingly as actual investments are far more costly than announcing goals. On a more positive note, the report shows that the gap between goals and investments for social issues, like human rights protections, is shrinking. Whether it be climate change mitigation or local community impact, SCS goals ranked more highly than investment in 2021. Still, the investment picture is not all doom and gloom. There are tentative signs that the gap is closing in some areas.
COMMITMENT TO SCS EFFORTS
Source: State of Supply Chain Sustainability 2022, MIT
The COVID-19 pandemic had a severe impact on supply chains worldwide, but one thing MITs SCS report has found year after year is evidence that many firms have been accelerating their SCS efforts as a means to manage risk and strengthen their supply chains overall. That trend held true in 2021, and this year’s report confirms the vital role supply chains play in championing corporate sustainability.
Why?
As one of the respondents from a global electronics manufacturer explained, “I think we’re seeing more and more that our customers—both our direct customers and our indirect customers—are expecting it, or in some cases demanding it. They are looking to only purchase from companies that are investing in sustainability and are committed to being leaders in that space. I think there is a much stronger pull from the customers for it.”
Another massive contributing factor to this trend is the fact that far more people in leadership roles are taking a direct interest in SCS efforts. The report has found a steady increase in all levels of engagement from decision-makers, indicating that sustainability awareness is spreading throughout organizations, rather than the responsibility of a single “sustainability czar.”
SCS PRACTICES
There are a variety of supply chain practices that companies can take on to address SCS, some include:
Supplier audits and supply chain mapping were the most prevalent practices taken on by companies, and the ones that saw the greatest increase since 2020. Supplier
Collaboration and information technologies, for example, have been adopted by a smaller number of firms, likely because of their relative cost and unfamiliarity. These less popular practices represent a tier of initiatives that many firms consider aspirational, but also as the next step on their sustainability journey, which is encouraging.
Source: State of Supply Chain Sustainability 2022, MIT
As the table above shows, forming partnerships (collaboration) is the “next frontier in supply chain sustainability.” We couldn’t agree more, in fact, that has been the SemiCab message since day 1; only with collaboration can we address the inefficiencies and volatility we all face in managing supply chains, especially when it comes to transportation.
And yet, through its executive interviews, the MIT report found that collaboration with outside entities is a tough barrier to entry for many. One respondent from the warehousing and logistics sector shared: “The collaboration has to be both inside your company and outside, across industry, and that’s really hard to do, particularly because you have to have a really good culture to do that.” And while all of us at SemiCab agree it’s important to collaborate, we don’t believe it’s as big of a challenge as many think. Especially now that we have the technology needed to foster the kind of collaboration critical for all industries to succeed.
SemiCab enables improved sustainability measures. Shippers with both private and dedicated fleets on the SemiCab platform can market their available capacity to other shippers via our tech-enabled services. Carriers benefit by dedicating capacity on chosen sets of lanes which SemiCab manages on behalf of our shippers. As one of the MIT Survey respondents said:
We couldn’t agree more. To learn more about how SemiCab’s Collaborative Transportation Platform works to achieve sustainability goals, get in touch with us and join the ecosystem.
SemiCab is a Collaborative Transportation Platform that uses Predictive Optimization™ technology to create Orchestrated Collaboration™.
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