The journey and benchmarks to building a sustainable supply chain

As leaders enter 2025, sustainability is no longer a buzzword – it’s a necessity. In the area of supply chain, this is no different. Sean Mitchell, Associate Partner at Argon & Co, shares how leaders can start re-shaping their supply chains in order to become more sustainable – and competitive.
A sustainable supply chain involves creating products through processes that minimize environmental impact, conserve energy, and use resources efficiently. Beyond environmental benefits, sustainable practices can significantly enhance operational efficiency, reduce costs, and improve brand reputation. For operations leaders, this means embracing a holistic approach that aligns economic goals with environmental stewardship.
A successful transition to sustainable supply chain starts with cultivating a culture of sustainability within the team, which begins with a clear mission and vision that prioritises sustainability (in the broader definition above), coupled with a commitment to training and empowering employees. Richard Branson’s words resonate here: “Train people well enough so they can leave, treat them well enough so they don’t want to.”
By fostering a workplace where sustainability is a core value, employees become active participants in the journey.
The journey
Transforming the supply chain into a sustainable powerhouse typically requires efforts across four stages:
1) Stabilise
Address immediate safety, quality, delivery and reliability concerns. Implement basic systems to manage these areas and start fostering a culture that values continuous improvement.
2) Control
Establish systems-driven improvements in planning and execution and develop a proactive safety, quality and service culture. Begin to integrate sustainability methodology into your daily operations using TIMWOOD framework to address all types of waste – Transport, Motion, Waiting, Overproduction, Overprocessing and Defects. Ensure this thinking is consistently applied across the team – design, planning, procurement, manufacturing and logistics.
3) Improve
Invest in targeted improvements, such as energy management and process streamlining. Focus on building a knowledge base within the organisation, ensuring that best practices are documented and shared.
4) Differentiate & Disrupt
This is where the real action happens. Leverage digitisation and automation to drive predictive maintenance, real-time analytics, dynamic planning and continuous process optimisation. By now, sustainable practices are deeply embedded in every aspect of operations, from product design to final delivery.
Making progress
Benchmarking is essential to track progress and ensure that initiatives are delivering tangible results. Here are some key benchmarks to consider:
Safety Performance
Safety is a non-negotiable benchmark. Leading operations focus on lead indicators such as risk identification & reduction, shopfloor interactions, near-hit root cause investigation and others. This will raise the culture and a 50% reduction in lost-time injuries within the first year would be a good start, progressing towards zero harm.
End-to-end Customer Service
Integrate all elements into your customer service metric such as OTIFNE – On Time (delivered, not despatched), In Full, No Errors (quality defects, invoicing errors).
Once the measure is in place, aim for a 10% YOY improvement aiming for a target of 97% be in the top tier of performance (think of the process overhaul opportunities this will offer).
Energy Efficiency
Measure the reduction in energy consumption per unit of output. An efficient operation should aim for at least a 10-20% reduction in energy use within the first year of implementing sustainable practices.
Labour utilisation
Productivity is on the national agenda and should be at the heart of the drive to building a sustainable operation. Track the amount of labour per unit of output (rather than simply focussing on variances to standard), targeting a 10-12% improvement each year through process improvement and increased volume from an improved OTIFNE.
Waste Reduction
Track the amount of waste generated per unit of output. A world-class operation could target a waste reduction of 30-50% over a 2-3-year period, with a long-term goal of zero waste to landfill.
Water Usage
Monitor water consumption and aim for significant reductions. Benchmarks might include a 20-30% reduction in water use within the first two years, particularly in water-intensive industries.
Productivity
OEE (Overall Equipment Effectiveness) is a key measure of operational efficiency (of the composite of individual operations and an OEE of 85% or higher), which is considered world-class. This involves reducing downtime, improving speed, while ensuring quality.
OOE (Overall Operational Effectiveness measures the broader operational efficiency and will take into account your bottlenecks, under-utilised lines etc. Once in place, aim for an 7-10% year-on-year improvement.
Making the shift happen
Continuous improvement should be the mantra, with a focus on refining processes, adopting new technologies, and pushing the boundaries of what’s possible. Regularly revisit your benchmarks to ensure they align with your evolving sustainability goals and market demands.
The shift to sustainable manufacturing is not just about compliance or corporate responsibility – it’s about ensuring long-term success and resilience. By embracing sustainability and setting clear benchmarks, you’re not only protecting the environment but also future-proofing your operations.