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How Can Small and Medium-Sized Businesses Adopt Responsible Logistics Strategies?

Sharing DHL’s global insight on responsible logistics strategies, as well as the experience of entrepreneur and designer Emily Bode, BoF identifies how smaller businesses can reimagine logistics to do good and mitigate harm.
sector president of e-retail and fashion at DHL Mirella Muller-Wuellenweber joined American designer, entrepreneur and Woolmark Prize winner Emily Bode | Source: Courtesy
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LONDON, United Kingdom — In a special episode of BoF LIVE, the sector president of e-retail and fashion at DHL Mirella Muller-Wuellenweber joined American designer, entrepreneur and Woolmark Prize winner Emily Bode, to discuss how fashion businesses can adopt more responsible logistics strategies.

Indeed, as consumer expectations that brands act in a more responsible manner grow, understanding the impact of their operations has never been more important.

“The on-going boom in e-commerce is good for business’s growth. But we also recognise that this will definitely have an impact on the environment and the climate, and we take that very seriously. We have been working in this area for decades to get there — the DHL group is seeking to reach zero emissions by 2050. We have already improved energy efficiency by 35 percent,” explained Muller-Wuellenweber.

But how can businesses with limited resources, facing an extremely challenging economic outlook, operate in a manner which reduces its negative impact on both people and planet?

From common roadblocks to accessible solutions, combining DHL’s leading global insight and Bode’s personal experience of building a mission-driven brand, the talk identified how SMEs can begin to reimagine their logistics strategies to mitigate harm, with actionable insight for business leaders to adopt into their decision-making processes. Below, we share excerpts from the thought leadership event.

Using Data to Optimise Supply and Delivery

Data-collecting tools can be used to forecast demand, plan production and help companies determine the best supply chain routes and modes of transport, before informing route planning by identifying patterns in delivery times, more efficient routes and type of delivery vehicles.

MMW: From an environmental perspective, data-planning is absolutely crucial, and we can still all do better. We look at the best algorithms to plan and optimise routes to reduce crucial emissions, and it starts upstream. How you plan your transportation and the best mode [of transport] when production is read from an environmental perspective — ocean freight rather than air travel, for example — and the best routes to optimise customs, to reach the warehouses and shops, is critical.

EB: We were originally collecting data just on the product itself. But I recently won the Woolmark Prize award, measuring data from the start of wool production through to the finished product. We are now also measuring what our output is within our studio. We rely so much on our handwork and craft, which is easily costed when we work with factories and tailors, but when we work to grow our own manufacturing, it’s a little bit more difficult. Implementing those processes and procedures has been really valuable and allowed us not to bottle neck as we grow.

Reconciling Demands for Convenience and Responsibility

The speed and convenience of the delivery windows now expected by some consumers have become inherently unsustainable. Routes are increasingly residential, atomised through more stops and the multiple delivery attempts required for some orders. The intricacy and density of distribution channels has grown exponentially, as more and more delivery options and free returns schemes have been launched.

EB: I think people are more lenient when the narrative is there. We always had on our website that it would take 2 weeks to ship a product. I think that if you are honest when you explain that to the consumer, they don’t care as much and they are more forgiving. This is especially true when they hear that you’re doing your own in-house fulfilment and investing in staff to create a community of young people instead of warehousing.

People are more lenient when the narrative is there. If you are honest with the consumer, they are more forgiving.

MMW: We need to look at different ways in how to deliver and optimise on that. Offer alternative ways on how we hold shipments, like the neighbourhood concept we trialled, where people who have garages, often those who are at home more often, like retired people, can opt to become a select drop point for their neighbourhood. Then, if you order something, you have it delivered to these select drop points, where it is scanned and in the system. You then reduce the delivery destination to one point rather than 20 or 30. In Sweden a couple of years ago, we also piloted using people driving out to the countryside to take shipments with them. We need to look at different models on how this could work.

Rationalising Packaging to Seek Efficiencies

Single-use plastics to send shipments to consumers or warehouses account for significant waste within the industry. One fast fashion brand alone sources over 72 million plastic mailing bags a year. The Ellen MacArthur Foundation report on the New Plastics Economy found that new, innovative delivery models and evolving use patterns offer a reuse opportunity for at least 20 percent of plastic packaging, worth at least $9 billion. DHL guidance is for SMEs to develop a strategy on single-use plastics and defining minimum standards and recommendations for sustainable packaging.

MMW: Look at the [packaging] material. Apart from being recyclable material, is it stable? Can you use it again? If it is packaged wrong, it damages during transportation and you can’t reuse again. Look at the filling material. Limit how much packaging you use. These are easy things to influence and brings a bit effort. We continue to workshop with our customers to identify new packaging materials, new ways of reducing single-use plastic in the transportation across the world. Ask how your suppliers are looking at packaging and wrapping, what type of pallets in that part of the supply chain. How do they load containers? [What is] the amount of plastics [used] on pallets?

EB: First and foremost, whatever we request of our stockists has to be already implemented within our own business, so when we ask them to use less plastics or not use wardrobe boxes to avoid shipping hangers, we have to implement these practices within our own business. We just recently requested our businesses to sign onto the 15 percent pledge. It has to be a part of your mission statement as well as, when we’re working with our factories in India, requesting we’re not shipping plastic back and forth, only to them repackage in plastic to ship to our stockists. I think it’s important to have it as a part of your brand narrative before you try to encourage others to participate.

Adopt Multi-Modal Transportation and Set Science-Based Targets

Businesses should focus on multi-modal transportation solutions and plan ahead to avoid air freight where possible. Instead, use combinations of transport types, such as rail, road, ocean, barge, and set targets. Targets adopted by companies to reduce greenhouse gas emissions are considered “science-based” if they are in line with what the latest climate science says is necessary to meet the goals of the Paris Climate Agreement.

MMW: We have been looking more and more at alternative models, using trains and trucks out of China and into Europe, for example. We don't need to fly everything. There are different mixes. Leave the flexibility to your consumers where they want to have it delivered, if they reduce their cost and you can make your customer happy if it is at their convenience, with their chosen check point and with the logistics partner they want to have. For SMEs, in the white paper DHL developed in collaboration with the British Fashion Council, we give a check list on how they can do this and how they can check across the supply chain on how their partners and suppliers are working on this. Have they set clear targets? What are the measurements against that? Are they challenging their suppliers and partners on this? That can only be done if you have a clear strategy, clear measurements.

Leave the flexibility to your consumers where they want to have [their shipping] delivered.

EB: As of now, we are mostly sharing that through a narrative around our fabrication, so if you take a historical narrative about India and bringing the economy back into the hands of the craftspeople and Indians, looking at the sustainability perspective in terms of our environment and how that has a zero carbon footprint, and explaining that to our customers, that is how we are sharing those metrics. It’s not just keeping things out of the landfill, but also keeping the history and narrative alive to prolong the life cycle of products and allow people to hold onto things a bit longer.

In the Fashion and Environment White Paper that DHL and the British Fashion Council jointly developed, among check lists for design awareness and priorities, supply chain recommendations, energy efficiencies and carbon footprint, deliveries and packaging, extending lifecycles and reuse, the authors include strategy recommendations as a starting point to cross reference, shared below.

Understanding your organisation's impacts
• Have you monitored energy, water and waste data for at least a year?
• Have you surveyed your suppliers/customers about their attitudes to the environment and your products/services?
• Have you used your energy/waste/travel/etc. data to set targets?
• Have you evaluated any impacts from initiatives you have undertaken? (e.g. upgrading lighting to LEDs)
• Have you calculated your carbon footprint?

Questions to ask
1. Do you (or your supplier/s) have an environmental policy?
2. If so, is everyone in your organisation aware of it?
3. Does it cover the entirety of your organisation and its activities?

Environmental Action Plan
5. Do you (or your supplier/s) have an environmental action plan?
6. Is it approved by your senior team / Board?
7. Does it have measurable objectives and targets, with assigned responsibilities?

Linking to your wider business strategy
8. Is environmental sustainability embedded in broader business mission, strategy or planning?
9. Are you committed to environmental procurement and sourcing?
10. Are you communicating with and engaging your stakeholders on environmental sustainability?

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Agenda-setting intelligence, analysis and advice for the global fashion community.
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