Three key sustainability areas to drive supply chain

Although several industries in Vietnam have initiated the integration of sustainability into their operations, companies managing extensive supply chain functions may encounter unique challenges. Therefore, we identify three key areas that we believe companies engaged in supply chain management should prioritize to enhance their sustainability commitments in emerging markets like Vietnam.

Sustainable transportation

In the context of Vietnam, where transportation contributes significantly to environmental pollution, with 70 percent of total dust and gas emissions attributed to this sector, supply chain management (SCM) companies play a crucial role in mitigating environmental impact. At DKSH, we acknowledge the pressing need for sustainable practices in transportation and are taking pragmatic steps to address this challenge.

Establishing standardized delivery procedures through strategic partnerships with local transport providers is crucial, as is focusing on promoting sustainable transportation practices, with an emphasis on eco-friendly vehicles and renewable fuels. Delivery operations are also optimized by examining factors such as vehicle types, schedules, and delivery routes tailored to the specific volume and frequency of delivery points. This approach not only enhances operational efficiency but also maximizes cost-effectiveness in delivery endeavors.

Reducing carbon emissions

Efforts to curb carbon emissions require a thoughtful transition from planning to action, particularly given the intricacies of the supply chain management (SCM) sector and the preparedness of the market. Despite these challenges, it is crucial not to impede the pursuit of sustainability goals by SCM leaders. Maintaining resilience, exploring various initiatives, implementing gradual steps in phases, and rigorously analyzing the resulting impacts are essential components in ensuring progress towards a greener and more sustainable future.

At DKSH, we operate eight warehouses, distribution centers, and cross-docks throughout Vietnam. Given that our warehouses are consistently operational, Vietnam contributes to about 13 percent of DKSH’s total global electricity consumption.

Recognizing the significance of our environmental footprint, we have proactively adopted multiple strategies. These include minimizing dependence on fossil fuels, making investments in renewable energy sources and environmentally friendly infrastructure, for instance, replacing halogen light bulbs with LEDs, and purchasing International Renewable Energy Certificates as a credible claim for renewable energy use in compliance with the GHG Protocol Scope 2 Guidance.

As a leading market expansion services provider in the market, supply chain activities, particularly transportation activities, are critical links in our efforts to provide a wide range of products to millions of Vietnamese consumers.

Improving waste management

Within the realm of sustainability strategies, waste management is a crucial consideration for SCM leaders. In the course of preparing goods for delivery, companies commonly use materials such as cardboard boxes and plastic film for pallet wrapping, contributing to packaging waste. Additionally, products requiring constant temperature control necessitate extensive packaging for temperature preservation during delivery.

It is important for sustainable strategies to go back to the basics of the “3R” principles (Reuse, Reduce, and Recycle) to optimize ecological impact. These can be done by taking an innovative approach by repurposing used cardboard cartons and replacing traditional materials like bubble wrap and Styrofoam in delivery packaging. Furthermore, actively phasing out environmentally harmful packaging and opting for self-decomposing bags and reusable cold chain boxes (B-Box) not only minimize non-biodegradable waste but also improve operational cost efficiency.

Embracing digitalization and implementing paperless distribution centers in operations, delivery processes, and invoicing systems significantly reduce paper consumption through digital solutions.

As Vietnam aligns with global efforts to achieve net-zero emissions by 2050, DKSH recognizes the pivotal role of supply chain management in mitigating environmental impact and has undertaken pragmatic steps. Through strategic partnerships for sustainable transportation, carbon offset initiatives, and innovative waste reduction strategies, such as embracing digitalization, we are committed to fostering a greener and more sustainable future in Vietnam’s emerging markets.