Is Onshoring The Road to Sustainable Supply Chains?
Companies can now relocalize their production more sustainably and efficiently with smarter supply chain planning on an integrated platform.
How Onshoring and Friend-Shoring Strengthen Sustainable Supply Chains
Onshoring can be a sustainable step in times of much-needed supply chain decarbonization, frequent disruptions and increasing social pushback from offshored employees. However, some companies are also considering friend-shoring so they are not limited to only domestic production. Whichever relocalization route they choose, one thing is clear: All roads to more sustainable supply chains start with smarter planning.
Delivering the right relocalization strategy requires preparation, yet not all companies are equipped to do so. More than 60% of them do not have the right tools1 to optimize their workflow assignment and supplier relationship management (SRM).
To address this gap and begin their onshoring journey, companies can turn to smart supply chain solutions on the 3DEXPERIENCE® platform.
Discover how below.
Onshoring: The Smart Road Home
Relocalize with an optimized supply chain.
Download our ebook to find out more.
Benefits of Sustainable Supply Chains for a Better Future
Reducing Environmental Impact
Sustainable supply chains help companies lower their carbon footprint and reduce environmental impact. Practices like onshoring improve sustainability, supply chain resilience, and operational efficiency.
Sustainable Sourcing and Circular Economy
Sustainable supply chains promote sustainable sourcing and responsible production. Integrating circular economy practices ensures efficient energy use, reduces waste, and encourages recycling across the value chain.
Contributing to Global Climate Goals
By adopting sustainable practices, companies support global climate goals, meet regulatory requirements, and satisfy the demand for eco-friendly products. Sustainable supply chains are essential for reducing emissions.
Utilizing Digital Software
Technologies like virtual twins and digital platforms give companies end-to-end visibility in their supply chains. This helps optimize resources and drive sustainable business transformation by aligning decisions with sustainability goals.
Three Strategies for Sustainable Supply Chain Optimization through Onshoring
With DELMIA’s smart supply chain planning solutions, companies can optimize their entire network in the three steps shown below.
1. Effective planning
Smarter, integrated planning on the 3DEXPERIENCE platform centralizes the data repository to speed up supply chain planning and optimization via two parts:
- Data-backed actions
- Integrated planning processes
Data-backed actions
With all critical data points in one place, companies have full supply chain visibility. This way, they can accurately model and simulate the outcomes of any planning scenario – and quickly respond to changes, risks and disruptions.
Integrated planning processes
A virtual twin of the supply chain comes with advanced scenario planning capability, which enables accurate predictive analysis. With it, companies can test different contingency plans and implement data-backed enterprise-wide changes.
2. Integrated collaboration
Collaborating in the platform’s secure collaborative environment results in better teamwork, improved workforce performance and greater enterprise-wide productivity. Check out our customer story for a real-life example of how it worked for them.
Customer Story: Amy's Kitchen
Discover how the organic foods manufacturer optimized their production via sustainable supply chain planning on the platform.
3. End-to-end cost reduction
Explore how the 3DEXPERIENCE platform’s virtual twin capability can help companies reduce supply chain cost.
Cost Projection
Simulate and test plans to review all revenue and profit options. Calculate demand variability against price changes. View cost-related data from any relevant point in the network.
Supply sourcing
Quickly compare alternative sourcing options to respond to changes on time.
Maintain healthy inventory levels with total stock visibility.
Profitability
Simulate what-if financial scenarios to change plans in real time.
Visualize the impact of any plan and decision on profitability.
Upscaling
Leverage advanced solutions that can scale up in parallel with business growth.
Easily incorporate new technologies and virtual capabilities.
Leveraging Technology for Sustainable Supply Chains Management
Technology plays a crucial role in achieving supply chain sustainability. Tools such as digital twins and AI-driven analytics allow companies to monitor, simulate, and optimize supply chain operations in real time. By utilizing platforms like 3DEXPERIENCE, businesses can gain full visibility of their entire supply chain, assess their environmental impact, and make informed decisions to minimize waste and energy consumption.
Moreover, advanced planning solutions help streamline supplier collaboration, improve inventory management, and support eco-friendly sourcing. These technologies are essential for driving sustainable supply chains and ensuring compliance with global sustainability goals.
FAQ About Sustainable Supply Chain
Supply chain sustainability involves integrating environmental, social, and corporate governance factors throughout the supply chain, from sourcing raw materials to delivering products to the market. Companies collaborate for sustainable practices, driving progress in supply chain management and benefiting both business and organizations.
The promotion of sustainable supply chains emerges as a pivotal catalyst for effecting transformative change within companies. These sustainable supply chains represent a strategic choice that exerts a profound influence over the entirety of the operational framework, encompassing aspects such as sourcing, production, packaging, and the ultimate delivery of products.
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Supply Chain Transformation:
- Embracing sustainable supply chains is a strategic choice for companies.
- Incorporating ethical and eco-friendly practices is essential in supply chain management.
- Onshoring is increasingly becoming a pivotal strategy for businesses.
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Environmental Responsibility:
- Sustainable supply chain management supports environmental sustainability.
- It champions eco-conscious practices and reduces the carbon footprint.
- This approach aligns with global efforts to address climate change.
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Social Responsibility:
- Sustainable supply chains uphold human rights and promote fair labor practices.
- Collaboration between organizations is vital to ensure these ethical standards.
- Companies are committing to broader sustainability goals through these efforts.
ESG (Environment, Social, Governance) supply chain refers to the application of environmental, social, and governance principles in managing supply chain operations. This involves ensuring that businesses minimize their environmental impact (such as reducing carbon emissions), uphold ethical labor practices (like fair wages and safe working conditions), and maintain transparent and accountable governance practices. Implementing ESG in the supply chain helps companies align with sustainability goals, meet regulatory requirements, and respond to growing consumer demand for socially responsible and environmentally friendly products.
- In our sustainability-driven world, onshoring represents a strategic choice within supply chain management.
- This approach involves the seamless integration of ethical and environmentally responsible practices across the entire supply chain, encompassing key stages such as sourcing, production, and delivery.
- The onshoring strategy not only upholds human rights and environmental ethics but also serves as a catalyst for profound business transformation.
- Through the establishment of sustainable supply chains, companies can actively contribute to positive global environmental outcomes and promote sustainability.
- By implementing onshoring, organizations can actively demonstrate their commitment to sustainable practices and collaboration within the supply chain ecosystem.
- This strategic shift can lead to the development of more sustainable products and practices, marking progress in the journey towards responsible business operations.
- It underscores the need for continuous research and adaptation, ensuring that supply chains remain aligned with sustainability goals and the changing demands of the market.
Companies can reduce the carbon footprint of their supply chains by optimizing logistics to minimize transportation emissions, adopting renewable energy for production, and using sustainable materials. Implementing digital tools like virtual twins also allows for better resource management and helps lower waste across the supply chain.
| Aspect | Traditional Supply Chain | Sustainable Supply Chain |
| Focus | Primarily focused on cost efficiency and speed. | Focused on environmental impact, social responsibility, and long-term viability. |
| Environmental Impact | Often has a high carbon footprint due to energy use and waste. | Prioritizes low carbon emissions, energy efficiency, and resource optimization. |
| Sourcing | May rely on low-cost suppliers, regardless of sustainability. | Emphasizes ethical sourcing, fair labor practices, and sustainable raw materials. |
| Waste Management | Generates significant waste with limited recycling or reuse. | Implements circular economy principles to reduce, recycle, and reuse materials. |
| Energy Use | Primarily uses fossil fuels for transportation and production. | Seeks to use renewable energy sources throughout the supply chain. |
| Governance | May lack transparency in governance and practices. | Ensures transparent, accountable governance aligned with ESG principles. |
| Compliance | Focuses on meeting minimum legal requirements. | Strives to meet regulatory and sustainability standards beyond compliance. |
| Long-Term Viability | May prioritize short-term gains over future impact. | Focuses on long-term sustainability for both business and the environment. |
A circular economy promotes recycling, reusing, and remanufacturing materials, reducing waste and extraction of raw materials. This approach extends product lifecycles, minimizes environmental impact, and aligns supply chains with sustainability goals, making them more resource-efficient.
Sustainable supply chains contribute to global climate goals by reducing greenhouse gas emissions, promoting energy efficiency, and adopting eco-friendly practices. These efforts help limit global warming and align businesses with international commitments, such as the Paris Agreement.
Onshoring is important for a responsible supply chain for several reasons. As the suppliers are closer, transportation is shortened which in turn reduces carbon emissions, jobs are created locally with positive impacts on local economies and ethical labor practices are ensured through better oversight.
Artificial Intelligence (AI) enhances sustainable supply chains by enabling more efficient resource management, optimizing logistics, and improving demand forecasting to reduce waste. AI-driven insights allow companies to monitor energy use, predict disruptions, and make data-driven decisions that minimize their carbon footprint and promote sustainability.
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