In logistics, supply chain accountability is essential to achieving ESG objectives. Fortunately, more effective solutions are available to non-vessel operating common carriers, port terminal operators, logistics service providers, and intermodal marketing firms to help them remain ahead of the competition.
Internally revamping a corporation may be challenging. Since talk is cheap, astute logistics interests have used these four strategies to hold dishonest partners accountable.
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Management of Relationships
When every link in the supply chain understands and fully embraces its role, supply chain accountability is ensured. Consider eco-friendly aims: according to ESG criteria, only 75% of industry participants have invested heavily in achieving sustainability-related goals. It appears that the remaining 25% of logistics businesses have other priorities because they haven’t taken any action yet. Conflicts over organizational culture may result from the distance.
All businesses have the potential to unintentionally undermine outside partners in order to further their own agendas. Building strong bonds with supply chain partners enables all stakeholders to become acquainted with one another’s distinct business objectives and identify cooperative opportunities. The secret to regularly hitting ESG goals is to find common ground on important issues.
When everyone is in agreement, logistics partners are less likely to act negatively against one another. When one party is unaware of their responsibilities and what the other aspects of them are, betrayal of trust may occur unintentionally.
The dangers that each side faces and wants to reduce must be discussed. Discussing the benefits that each party hopes to obtain from the business partnership should also be a top priority. By putting all the cards on the table, everyone may cooperate rather than compete.
Verbal agreements are not very strong. Written contracts give carrot-and-stick strategies more teeth by outlining obligations and defining what happens if one partner doesn’t live up to expectations. When all discussions are in black and white, supply chain partners are more likely to keep their end of the agreement.
Additionally, open communication promotes the development of more robust, long-term alliances. Reactivity is aided by timely alerts. In order to interact with one another and make the required modifications quickly without sacrificing ESG goals, relevant stakeholders must be informed of possible and existing setbacks.
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The Orchestration
Effectively planned operations assist in removing blind spots between partners, enabling everyone to carry out their obligations. Supply chain orchestration is fueled by real-time data exchange. It dismantles silos and makes it possible for stakeholders to communicate with one other across time zones and locations.
Smooth information flows are supported by technological integration and transformation. IoT devices, AI-based advanced analytics software, transportation orchestration platforms, and enterprise resource planning systems are essential technologies.
In order to coordinate their operations, logistics businesses and partners do not need to employ the same hardware and software providers. When their technologies are interoperable and they stop using outdated solutions that impede system-level integration, all parties may survive. In order to obtain insights, have a single version of the truth, and automatically create audit trails, interoperability is crucial. It guarantees that pertinent stakeholders from both sides may access comparable data.
Scalability and simplicity of adaptation are supported by contemporary supply chain systems. In order to maintain seamless supply chain operations between partners, agile decision-makers from both camps need technology that can expand as their businesses expand and their business needs change. Examples of such technologies include implementing vehicle-to-vehicle communication and other carbon emission reduction techniques.
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Openness
When everyone involved in the supply chain works in an atmosphere of distrust, supply chain accountability becomes less of an issue. Because there is abundant, indisputable proof available and no one can conceal or alter important information when it is needed, no party in this environment must rely on the word of another when looking into issues or conducting audits.
Fostering supply chain openness requires embracing the appropriate technology to close visibility gaps, gather detailed data, create high-quality video records, and enhance traceability.
Examples include GNSS-powered systems that use signals from different satellite constellations, such as GPS, to follow the movement of shipments. Telematics devices measure driver behavior on the road and continuously monitor vehicle performance.
Additionally, fleet semi-truck dashcams continually record high-resolution footage of the environment while the engine is running, from parking to the destination. This trustworthy material can support or refute anecdotal allegations. Because blockchain is an irreversible distributed record that can be decentralized, it makes partner activity traceable and audits easy.
Logistics firms have several choices to achieve transparency at every stage thanks to the increasing number of advanced technology available on the market. Organizations may encourage partners to police themselves to avoid mistakes and come clean when anything goes wrong by acquiring extra eyes and note-takers with the correct hardware and software solutions.
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Assessment of New Partners
Many supply chain issues may be resolved with careful partner selection. Due diligence is worth the effort, even if it might be laborious.
Without a way to identify trustworthy and questionable vendors early on, fostering higher ethical standards and establishing a collaborative culture built on trust and responsibility are empty ideals. Making the costly error of signing contracts with dishonest people may lead to PR disasters, increase long-term expenses, and decrease responsiveness.
The vendor management team of a logistics firm may thoroughly screen potential customers by examining each one’s operational performance using pertinent KPIs. Candidates must, for instance, exhibit exceptional delivery time, truck turning, average days late, freight bill accuracy, and transportation cost data when looking for new trucking partners.
Additionally, establishing commercial relationships with new partners offers a chance to advance an organization’s sustainability. Technology proficiency and an openness to new ideas are essential qualities for the perfect supply chain partner. ESG laggards are detrimental to any logistics company attempting to make sincere attempts to contribute to the solution, even if no industry participant can assert that they have everything worked out.
However, the most successful collaborations don’t always result from instant alignment. Lesser candidates with more promising learning dimensions and a willingness to innovate to support their partners’ sustainability aspirations, like upgrading to zero-emission vehicles and switching to biomass-based fuels like renewable diesel, may outperform their more established counterparts who are set in their ways.
Maintain Supply Chain Accountability Without Trying
Even partners who are typically moral could feel pressured to avoid taking responsibility for their mistakes when they can get away with it. Despite the fact that this propensity is inherent to human nature, it is undesirable in the business world, particularly when logistics companies are paying enormous sums of money to meet industry requirements. Use these strategies to make sure everyone acts honorably.