Aug 17, 2023

Unlike past supply chain trends, the push for sustainability highlights a much deeper impact as it affects today’s businesses and the generations of tomorrow. Manufacturing plants and warehouses work around the clock to meet consumer demands. However, many crucial tasks, such as production and transport, are large emitters of greenhouse gases. The Environmental Protection Agency estimates US manufacturing plants are responsible for 23% of direct carbon emissions. As a result, companies seeking to lower emissions have often employed solutions such as:

• Technology consolidation
• Rechargeable devices
• Real-time temperature monitoring
• Digitized reporting
• Circular economics and reverse logistics

While some steps may seem too small to drive an impact, businesses can’t afford to remain passive. Today’s consumers have become ever more aware of the supply chain’s impact on the environment. As a result, 66% of shoppers will heavily consider a product’s pledge to sustainability before finalizing a purchase. They are also much more attentive to green-washing, with many conducting their own personal research on a company’s ethical background.

Not only is the general public more conscious of manufacturing’s role in greenhouse gas emissions, but legislative bodies have also focused more on establishing traceable records of a product’s sustainability commitment. About this time last year, the US government passed the Inflation Reduction Act (IRA), redirecting $400 billion in federal funds toward manufacturers prioritizing green initiatives. Of course, funding recipients must be able to prove sustainability efforts through consistent tracking of energy consumption, waste reduction, and most importantly, material sourcing.

What is Sustainable Material Sourcing

Apart from the sustainability world, material sourcing simply refers to the act of gathering the building blocks –parts, ingredients, chemicals, etc.– to create a product from suppliers. Manufacturers are tasked to track individual sources before a product’s creation to comply with quality regulations and facilitate future audits. Going one step further, sustainable material sourcing is the practice of obtaining materials in a way that minimizes negative environmental impacts and promotes long-term social and economic benefits. It involves identifying materials that are renewable, non-toxic, and have a low carbon footprint. This essentially requires manufacturers to track the material’s production and origin. Companies are often encouraged to track:

• Energy use
• Greenhouse gas emission
• Water use
• Waste generation
• The presence of renewable materials (like bamboo and cork)
• The absence of non-renewable materials (like plastic and aluminum)
• Source of labor
• Fair trade practices

In order to promote sustainable material sourcing, it is important to have clear standards and guidelines for materials and supply chains. This ensures that materials are sourced in a way that meets environmental, social, and economic goals. Popular sustainability programs such as the ones outlined below can help provide a framework for certifying that materials are sourced in a sustainable way:

• The EPA’s Environmentally Preferable Purchasing Program – The EPP program aims to reduce climate impacts by collecting potential ecolabels in one place, so manufacturers know what to look for in a potential source.  
• The National Institute of Standards and Technology (NIST) and ASTM Sustainability Guide – NIST’s visual guide serves as an overview of potential waste and energy consumption instances within the production journey. When manufacturers know what KPIs to focus on, they can make better-informed decisions on where and how to minimize waste.

There are also several tools and technologies available to help promote sustainable material sourcing. For example, a life cycle assessment (LCA) can be used to evaluate the environmental impact of different materials and to identify opportunities for improvement. Similarly, supply chain mapping can help to identify potential risks and opportunities for improvement in sourcing.

What are the Challenges of Sustainable Material Sourcing

One of the key challenges in sustainable material sourcing is the complexity of global supply chains. Many materials are sourced from multiple suppliers, often in different countries, and it can be difficult to track the environmental and social impacts of each stage of the supply chain. When establishing sustainable material sourcing, manufacturers can encounter the following problems:

• Questionable Suppliers – Studies found that 8 in 10 executives rate their companies “above average” in maintaining sustainable practices. RFID technology has been one of the many ways manufacturers have combated counterfeiting and engaged suppliers to digitally provide multiple data points about a product.
• Elevated Costs – Upfront modernization costs can seem daunting as businesses must also spend time and labor to deploy systems. However, consolidating digital tasks into one terminal also reduces maintenance and repair costs in addition to minimizing e-waste.
• Poor Communication Infrastructures – As noted before, a truly sustainable supply chain requires the involvement of every participating business, from suppliers to manufacturers to distributors to retailers. Real-time communication systems such as cellular push-to-talk or blockchain data recording can help establish a systematic reporting system where participants can verify standards are being met from the moment materials arrive at the plant.

Fortunately, new technologies and tools are making it easier to track and monitor materials as they progress in the supply chain. A few of these technologies include:

• Android handheld computers – By consolidating data management and team communication, Android devices can help teams to communicate with suppliers with data readily available on hand.
• Machine vision and fixed industrial scanners – Enhanced to capture fast-moving barcodes and DPM labels, machine vision
• Eco-friendly labels – Not only can labels be customized to include environmentally-friendly materials, but they can also aggregate unique identifiers pertaining to individual suppliers, further simplifying future audits and traceability.

In addition to the environmental and social benefits of sustainable material sourcing, there are also economic benefits. For example, using renewable materials can reduce dependence on non-renewable resources and reduce the risk of price volatility. Similarly, sustainable material sourcing can help to create new markets and opportunities for innovation.

To protect our communities, customers, and bottom line, sustainable businesses must learn to encompass every step of the supply chain. Eco-friendly sourcing requires a holistic approach that considers the environmental, social, and economic impacts of materials and supply chains. By promoting sustainable material sourcing, we can create a more resilient and sustainable economy that benefits everyone. Meet with our automation team to learn how you can optimize traceability solutions to empower sustainable sourcing in your plant.