All along our supply chain, anything we can do to reduce travel miles, frequency of shipments and consumption of energy and materials also leads to cost savings and environmental benefits.
The changes we’ve made so far have been relatively easy to identify and implement – which means we’ve harvested much of the low-hanging fruit, such as shipping from ports that are close to our suppliers and establishing distribution centers closer to our end customers. Going forward, we’re aiming for the next level of logistics – what we call the “middle-hanging fruit.”
It’s a real challenge to go beyond the first wave of efficiencies and savings. It requires greater effort, richer insights and more creativity. And it takes a real commitment to help your team break out of established patterns and do things differently.
At Hasbro, our approach to meeting that challenge begins with one simple question: “What else can we do better?”
As we’ve tried to answer that question for ourselves, we’ve settled on three areas of focus that we believe can translate well to any business, regardless of scale. These are all practical ways to identify the next crop of improvements, develop the business cases to support them and implement the measures that make the most sense for your business.
1. Pursue continuous improvement: Every day, we work on improving our operations and logistics to increase efficiency and reduce costs. So, by the time we’ve implemented a change to our supply chain that reduces emissions and helps the bottom line, we’re already on our way to the next generation of improvements.
Perhaps you’ve already worked with your logistics provider to improve the efficiency of your shipments. You may have increased load size or begun using lower-cost and lower-intensity intermodal transportation. But if you’ve made changes like these, don’t stop there. Continue your efforts and focus on the middle-hanging fruit, such as redesigned packaging that maximizes the use of freight space.
Next page: Letting employees drive change
2. Empower our employees to drive innovation: Environmental sustainability has long been a priority for Hasbro. One of the ways we’ve pursued that priority is by changing the culture of our logistics team – encouraging and empowering our people to identify and take ownership of the ways their work positively impacts the environment and our business. The team feels vested in driving sustainable change and cost savings, and in the process these employees have become sustainability champions. This approach is a key part of our company culture, and it’s an example of how the creativity of our people continues to drive the future of our company.
In fact, when Hasbro received a 2012 Environmental Protection Agency “Excellence in Greenhouse Gas Management” Climate Leadership Award, the EPA noted that we have created a cultural change by training and empowering our employees to identify opportunities for saving energy, which drives sustainable change.
3. Align with sustainable partners and logistics providers: Look outside of your organization to engage with like-minded, innovative partners who also recognize the value of sustainable change. For example, one of our third-party logistics providers – NFI Industries – started a solar company, and its working to extend the benefits of solar to its clients, including Hasbro. NFI’s solar investment helps reduce the carbon footprint of our supply chain, and we also worked with the company to determine if a solar project made sense for one of our own facilities. This is a prime example of a supply chain partner implementing practices that help make our own operations more sustainable.
These focus areas have played a major role in the efficiencies we’ve achieved so far. As reported in our inaugural CSR Report in 2011, 80 percent of Hasbro products were moved to the seaport closest to our manufacturing facilities in China, and we reached a 90 percent container utilization rate by maximizing space inside each container.
Now we’re using these same approaches to tackle more complex logistics challenges. We’re continuously working to reduce the size of our packaging, which enables us to fit more product into the same size container and eliminate wasted space. We’re also continuing to implement analytical and modeling tools throughout the organization to help people understand how supply chain enhancements impact their business and enable them to improve and align their own practices with our logistics processes. And, of course, we’ll continue to look for opportunities to collaborate with logistics partners who can help us drive further improvements.
Continuous improvement...employee empowerment...sustainable partnerships. Think of them as three rungs of a ladder that can put that middle-hanging fruit within your grasp – and position you to reach even higher.
Image of Globe with transport mix by Login via Shutterstock.