Sustainable Service Supply Chains: How ready are you?

 Sustainability and our environmental impact are high on corporate agendas. A thorough understanding of the critical drivers of environmental impact throughout the value chain is required to achieve sustainability goals. Reverse Logistics divisions play a vital role and have the potential to significantly impact sustainability initiatives by reducing waste volumes and pollution risks, as well as reducing unnecessary transportation-related emissions.

What is Service Supply Chain Sustainability?

The term "service supply chain sustainability" refers to managing environmental impact categories associated with all aspects of a service event, such as planning, delivering, and recovering. In this regard, service supply chain sustainability should be regarded as a necessary means of achieving overall corporate sustainability objectives.

Methodology & Objectives

The study consists of two parts: qualitative and quantitative. In-depth interviews and discussions with academics and global Service Supply Chain practitioners were part of the qualitative research. At the same time, a large-scale survey of 112 Service Supply Chain Industry professionals comprised the quantitative component. Overall, the study aimed to assess organizational sustainability strategy and readiness, comprehend what it means for organizations, and how professionals can contribute to the goals.

The following are the study's key findings:

• A larger percentage of companies are still in the early stages of implementation and more mature processes and systems are needed.
• There is still confusion about what sustainability means and how to achieve it.
• The significance of sustainable supply chains has grown in recent years.
• Real-time data and metrics are required.
•  More investments in sustainable supply chains and collaborations are needed.
• Assist organizations in transitioning to more sustainable practices.

Qualitative Research Results

According to our qualitative research of industry leaders, there are numerous challenges to achieving supply chain sustainability. These difficulties include a lack of data, visibility, collaboration, and simple tools and processes. Yet, despite these challenges, executives are generally optimistic.

Quantitative Research Results

The quantitative study revealed a lack of confidence, clarity, consensus, and level of autonomy. These difficulties may arise due to many organizations' lack of a clear strategy or plan, which may lead to conflict in various departments.

The results of the large-scale survey are as follows:

• Various business functions inside organizations are developing initiatives, with the majority coming from Supply Chain (63%), Operations (58%), and Engineering (52%).
• The supply chain function is in charge (43%) of driving the majority of sustainability activities, followed by operations (23%) and sustainability (53%).
• The majority of respondents believed that the service supply chain played a role in setting priorities (60%), providing feedback (58%), making recommendations (53%), and implementing sustainability plans (51%).
• According to responses, Covid-19 has had a minor influence on supply chain sustainability pressure, with 75% believing their organization's commitment to supply chain sustainability has improved or remained the same since the start of Covid-19.

Service Supply Chain Sustainability Readiness

The findings indicate a general lack of readiness to meet environmental goals. More than two-thirds of respondents thought their organization was moderately, primarily, or fully prepared. In addition, respondents in the service supply chain were mainly confident that their organizations could support effective sustainability codes of conduct across all supplier tiers.

KPIs and Metrics

Many respondents state that they do not have clearly defined sustainability performance metrics. For example, more than half of respondents said their organization tracks refurbished and recycled units, which is the most significant shortcoming.

Reporting & Disclosure

Most respondents report supply chain practices to the public via various reporting cadences and methods, such as customer sustainability reports, annual reports, third-party compliance reporting, and press releases. However, the lack of clarity and consistency in reporting formats makes it difficult for many organizations to improve and compare their sustainability progress.

System & Processes

The majority of respondents believed their company's enterprise systems and business processes were at least somewhat effective, with tracking and visibility being the most significant areas for improvement.

Future of Sustainability

The vast majority (84%) say they use a third-party vendor to carry out or implement Service Supply Chain sustainability initiatives. Therefore, leveraging third-party expertise is the most effective way to overcome a lack of internal knowledge.

Strategic Implications

This study suggests that:

• Utilizing supply chain sustainability experts will assist organizations in moving past their lack of confidence and readiness.
• Understanding sustainability readiness should enable quick wins in terms of sustainability.
• It can define goals and objectives after determining where a company stands regarding sustainability readiness.
• Visibility and tracking may necessitate the engagement of outside experts and the establishment of systems and processes for sustainability initiatives.

The Aftermarket Service Industry offers a once-in-a-lifetime opportunity to improve sustainability. Although there is a desire to reduce environmental impact, a lack of systems and processes slows supply chain sustainability and readiness. Senior leaders should continue to set sustainability goals and strategies from the top-down approach and choose sustainability efforts that are both good for business and the planet.

To learn about the entire findings from our study, download the report today!

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