Supply Chain Sustainability: How to Navigate Benchmarking and Goal Setting

In the first part of our series, we highlighted how, in the face of mounting challenges, supply chain sustainability has emerged not just as an obligation but as a differentiator. Importantly, however, organizations must first invest in digitizing their operations to ensure they have the right data and capabilities to fully realize their goals.

In our second installment, we look at how to leverage your digital supply chain to benchmark emissions and set aggressive yet achievable goals.

Benchmarking: Setting Standards and Harnessing Supply Chain Visibility

Benchmarking starts with identifying industry standards and best practices measured against the current state of your supply chain emissions. A deep understanding of these benchmarks provides a clear frame of reference, facilitating the identification of gaps in your current practices and unveiling areas for improvement.

Gaining a holistic view is crucial and you, therefore, must incorporate all three scopes of emissions: Scope 1 (direct emissions from owned or controlled sources), Scope 2 (indirect emissions from the generation of purchased energy), and Scope 3 (all other indirect emissions in the value chain). Ignoring any of these scopes could leave potential areas of improvement untapped.

One of the most significant challenges in benchmarking supply chain emissions is the handling of disparate, incomplete data and manually calculating your carbon footprint. This is where real-time supply chain visibility comes into play. Digital tools like FourKites can provide real-time tracking of your supply chain activities, enabling accurate data collection and computation, and making the benchmarking process quicker and more efficient.

"We used to have to do a lot of parts grabbing, pulling data on invoices, calculating routes… but FourKites turns those conversations from, ‘Wow. This is a week of work that we'll never get back,’ to, ‘Not a problem! We'll run the query and get right back to you.’" – Cardinal Health

Goal Setting: Balancing Ambition with Feasibility

Once you've benchmarked your supply chain emissions, the next step is setting your reduction goals. This is where the SMART framework proves invaluable. Ensure your goals are Specific, Measurable, Achievable, Relevant and Time-bound. This approach helps balance ambitious targets with realism, keeping your strategy both aggressive and feasible.

In your quest to reduce emissions, always aim for the 'low-hanging fruit' first. These are areas where you can achieve quick wins, often with minimal investment. Initiating the process with these easier tasks can generate early momentum and buy-in, setting the stage for tackling more complex challenges.

"By leveraging the Sustainability Dashboard, we are able to assess and validate our sustainability efforts on an ongoing basis. Combined with other FourKites visibility tools, we are gaining fantastic insight into our supply chain." – Land O'Lakes

Making Progress: Measure, Adjust, Repeat

Remember, sustainability is a journey, not a destination. Avoid getting stuck in the 'pilot mode,' where initiatives are continually trialed but never fully implemented. Establish a process for regular monitoring, evaluation and resetting of goals. As you learn from the implementation and results of each initiative, revise your goals to keep them challenging yet attainable.

Here are a few questions to ask yourself when evaluating your sustainability initiative:

• Were my initial goals too challenging? Too easy?
• What is the financial impact of these goals? Did we also cut costs by gaining efficiency? Were there any unexpected costs or expenditures incurred in this initiative?
• What additional data would be useful in achieving our goals? How can I obtain this data?
• How can I socialize my sustainability wins with colleagues, customers and investors?

With sustainability increasingly seen as a differentiator, the need for effective benchmarking and goal setting is more critical than ever. Harnessing the power of digitization can help navigate this path with greater ease and precision. In the next part of our series, we detail how you can optimize your operations and eliminate waste.