This is why Environmental KPIs are Important
KPIs or Key Performance Indicators help monitor the performance and progress of the supply chain. Environmental KPIs monitor the impact upon the environment from the supply chain by reporting on the emissions to air, water, and land, as well as resource use.
By monitoring CO2 emission levels, following the GLEC framework, and reporting on in-house procedures, supply chains can gain a better understanding of the impact they may be having and further tailor it to reduce its effects on the environment. By setting, monitoring, and measuring environmental KPIs, you gain a detailed view of how you are performing, how to improve said performance, and can decide upon new processes in an effort to become a more eco-friendly business.
The Green Transportation Act and logistics
In May of 2021, legislation was introduced to lawmakers, which could dramatically affect supply chains.
The bill, known as the Green Transportation Act, would focus on creating blueprints of carbon dioxide emitters within their cities. The EPA and several MOPs backed the act. While they aimed the bill at all methods of transportation, it is predicted that the act will cause logistic companies to have better reporting of their environmental imprint, especially in larger cities where the DOT will have to maintain higher standards.
Supply chains must be ahead of the legislature in knowing how their fleets affect the environment. If standards increase, businesses that did not prepare accordingly may feel some blowback.
Lower costs for fleet operations
Legislation and a general understanding of the environmental impact aside, businesses should be happy to know that environmental KPIs are also helpful in lowering the overall cost of running their fleets, or at the very least, getting better quality for the expense.
This is done through your Lag KPIs. Lagging KPIs measure what is happening in your supply chain currently. This could monitor and document spills, fuel consumption (from carriers), clean-up methods, waste disposal, and volume of waste. When the Lag KPIs are in place, the leading KPIs can be used more accurately while those that are falling below standard can be worked on. All of these issues are a headache for the company that has to clean it up and shell out even more money in the process.
By being able to monitor what exactly happened and how it can be avoided in the future, not only do you increase your environmental awareness, but you may end up saving money with the insights you gain.
Overall brand enhancement
The world is changing and so are consumer demands. Currently, there is a massive push toward all things eco-friendly and a sizeable drive to reach zero emissions sooner rather than later. Now, more than ever before, logistic companies must alter the stereotype that all fleets are comprised of large, carbon-emitting, gas-guzzling vehicles.
With KPIs set in place to monitor, document, and then relate information to the public, the overall perception of your business will change. This shift to identifying you as an eco-friendly company will substantially change the branding of your company and put it in front of a crowd of consumers and competitors alike that grows larger every year.
This is why environmental KPIs are important
Environmental KPIs are important as they establish the basis for which your supply chain operates in regard to its impact on the world around us.
It is the essential factor that drives how you perform your operations. Setting and monitoring these sorts of performance indicators helps to meet standards, avoid having to change your operations, lower the overall cost of operations, and increase your branding while potentially drawing in a new customer base.
Environmental KPIs are essential for lowering air, water, and land emissions as well as reducing waste, such as that caused by overstocking inventory, spills, and routes not optimized for quick delivery.
Monitor those environmental KPIs, compare your stats, make changes, and cater to your consumers in the most sustainable and green way possible. A more eco-friendly supply chain equals a more consumer-friendly supply chain.