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The importance of sustainability in the wholesale and distribution industry’s supply chain

Jun 30, 2023 2 min

Sustainability has become an increasingly important topic in today’s business world, and for good reason. It’s not only beneficial for the environment, but it also leads to cost savings and improved efficiency. In the wholesale and distribution industry, sustainability plays a critical role in the supply chain.

Supply chain planning accuracy leads to efficiency. By reducing inventory volumes and spoilage and improving transportation and operational efficiency, companies can not only improve their bottom line but also make gains in environmental sustainability.

Consequently, wholesale and distribution companies must be capable of delivering products that fulfill these sustainability criteria and optimize their operations accordingly. This entails efficiently managing their resources, streamlining transportation, and implementing eco-friendly packaging practices, among other measures. By aligning with the sustainability expectations of consumers and retailers, wholesale and distribution companies can forge stronger partnerships and maintain a competitive edge in the market.

Wholesale and distribution companies can bolster their sustainability endeavors by incorporating measures aimed at curbing CO2 emissions and minimizing waste throughout their supply chain. Through the utilization of advanced technologies that optimize stocking and picking, as well as the implementation of waste reduction strategies, these companies can mitigate their environmental footprint while enhancing their operational efficiency.

By optimizing the ordering processes, wholesalers can ensure that trucks are efficiently filled, thus effectively mitigating CO2 emissions resulting from half-empty trucks. Integrating robust inventory management systems and adopting supply chain optimization strategies enable wholesalers to minimize the trips required for delivering goods, further amplifying their eco-friendly practices.

 One crucial factor to consider is the optimization of warehouse space, particularly in relation to cooling requirements. By optimizing the floor plan, establishing efficient picking routes, and implementing proper storage locations, companies can minimize cooling needs and significantly reduce energy consumption.

Supply chain optimization tools play a vital role in this process, assisting businesses in optimizing their warehouse floor space and streamlining operations for enhanced sustainability. Maintaining chilled and frozen warehouse space can be expensive due to the substantial energy requirements for cooling. However, effectively managing inventory flows within a smaller cooled warehouse footprint presents a remarkable opportunity to benefit both the environment and the bottom line simultaneously.

Collaborative demand planning with customers and suppliers can further help align size plans and optimize space utilization. This integration can provide synergies in operations, making supply chains more adaptive and efficient.

There are also regulatory pressures on wholesale and distribution companies to become more sustainable. In some regions, companies are required to report on their sustainability practices and reduce their carbon footprint. Failure to do so can result in fines and damage to the company’s reputation. By implementing sustainable practices, companies can not only avoid penalties but also improve their brand reputation and attract customers who are looking for environmentally responsible products.

Companies that prioritize sustainability in their operations can enjoy a substantial competitive advantage, including increased profits, balanced inventory, optimized floor space, and enhanced efficiencies throughout their operations.

As consumers and retailers demand more eco-friendly products and ethical business practices, wholesale and distribution companies must prioritize sustainability and incorporate it into their supply chain operations to stay relevant and meet customer expectations. This commitment to sustainability is not just an ethical choice but a strategic business decision that can drive success in today’s competitive marketplace.

Written by

Mikko Kärkkäinen

Mikko Kärkkäinen

Co-founder & Group Chief Executive Officer