DISTRIBUTOR FOCUS
Bringing Sustainability
into the Outbound Supply Chain
Practical Steps for Real Impact in the Paint and Coatings Industry
Credit: Khanchit Khirisutchalual / iStock via Getty Images Plus
By Nate Chenenko, Principal, Ducker Carlisle
Many companies view their “outbound” supply chain as everything that happens after manufacturing — often called distribution or logistics — but it can simply be described as moving finished goods to customers. In industries like paint and coatings, this phase presents unique challenges due to the nature of the products, including handling heavy, bulky containers and managing materials that require careful packaging and transport.
Traditionally, the main considerations in outbound logistics have been cost and service level. These factors remain critical and are usually straightforward to measure.
However, a third, increasingly important consideration is sustainability. This aspect is more complex to quantify, and the industry is still developing best practices for measurement. Nevertheless, focusing on sustainability can enhance outbound supply chains and help track meaningful environmental and economic outcomes.
Taking a sustainability perspective offers two key benefits:
- It provides a fresh lens on the supply chain. Just as methodologies like lean and Six Sigma help identify and eliminate waste, sustainability highlights new types of waste, such as excess packaging or inefficient transport that may have been overlooked.
- It encourages quantifying sustainability outcomes, like cost savings.
This article explores how sustainability applies in three critical outbound supply chain areas relevant to many industries, including paint and coatings: warehousing, packaging and transportation.
Warehousing: Balancing Sustainability and Operational Needs
Warehouses store finished goods like heavy containers of paint and coatings that often require specific handling and storage conditions. When considering sustainability in the warehousing of paint and coatings, key questions include:
- What materials does your warehouse discard in large quantities? Paint and coatings warehouses may generate waste from packaging materials such as plastic liners, metal bands, or pallets. Reducing this waste benefits both the environment and operational costs.
- Are your warehouses located close enough to customers? While relocating a warehouse involves upfront costs, proximity reduces transportation distances, saving money and lowering emissions — especially important given the weight and volume of paint products.
- Do you frequently replenish stock between warehouses? Optimizing your network to minimize unnecessary internal transfers can reduce waste and emissions.
- Where does your warehouse consume the most energy? Paint and coatings products may require temperature-controlled storage, which can be energy intensive. Identifying high energy use areas presents opportunities for sustainable savings and cost reduction, such as dedicated cold areas with insulation to control temperature loss.
Measuring these factors can be as simple as tracking electricity and water usage from utility bills or estimating waste volume. More detailed data, such as the source of electricity or waste disposal methods, may require collaboration with suppliers and waste handlers.
Example:
One client warehouse was discarding significant amounts of plastic shipping wrap daily. By partnering with suppliers to switch to reusable containers and bulk packaging, the warehouse reduced plastic waste and disposal costs. Although there was an initial investment, ongoing savings benefited both sustainability goals and the bottom line.
Packaging: Optimizing Materials and Sizes for Sustainability
Packaging in paint and coatings often involves metal cans, plastic pails and liners designed to protect sensitive products. This complexity presents sustainability challenges and opportunities:
- Are you shipping the same sized containers regularly to the same destinations? Consolidating shipments or using returnable packaging for intermediate stops can reduce waste.
- How well does container size match product size? Oversized boxes or pallets lead to wasted materials and inefficient space use.
- What drives your use of single-use plastics or non-recyclable materials? Alternatives often exist that are more sustainable, cost effective and customer friendly.
Tracking packaging use can begin with counting pieces and weighing materials. Detailed information on recycled content or recyclability may require close cooperation with suppliers.
Example:
Organizations that use a few similarly sized packages have a lot to gain from minor improvements to their packaging, but these changes can come at the risk of increasing damages, which have an outsized sustainability impact. One packaging team piloted multiple different packaging types and carefully monitored the rate of product damage for each packaging variation. They used the data around damage rates — plus the associated product loss and costs around re-shipping the product — to calculate the cost-benefit of various potential packaging updates versus packaging savings.
Transportation: Efficient and Responsible Movement of Paint and Coatings
Transportation moves goods from warehouses to customers or other supply chain points. For paint and coatings, transportation must balance efficiency with the safe handling of heavy, sometimes hazardous materials.
Key considerations include:
- How efficiently are trailers packed? Poor cube utilization results in more shipments and higher emissions.
- Are goods damaged during transport? Damaged products require replacements and double shipping, negatively impacting sustainability and costs.
- What proportion of shipments are rush or air freight? Air shipments generate significantly more emissions than other modes and are rarely ideal for heavy or hazardous products.
Tracking transportation can be as simple as counting shipments by mode and distance. More detailed tracking, such as trailer space utilization or fuel types, requires collaboration with carriers or fleet management.
Example:
One company found that 15% of orders were rush shipments sent by next-day air, their largest source of carbon emissions after manufacturing. These rush orders resulted from stockouts in warehouses, necessitating expedited shipments from other locations. By increasing inventory levels and improving demand forecasting, the company nearly eliminated air shipments, balancing inventory costs with transportation savings and improved customer service.
Why a Sustainability Focus Pays Off
Viewing the outbound supply chain through a sustainability lens benefits both the environment and business. Some sustainability projects may struggle with unclear return on investment, and savings from low- or no-cost waste reduction and efficiency improvements can help fund those larger sustainability initiatives. For example, some companies invest in sustainable fuels or electrified fleets to reduce emissions from transport. Although these options may have higher upfront costs, they help reduce long-term expenses and significantly lower carbon output.
Starting with practical, measurable improvements in warehousing, packaging and transportation builds a foundation of savings and data that enables larger sustainability goals.
Conclusion
Sustainability in the outbound supply chain is more than a buzzword — it is a strategic approach to saving money, enhancing service and reducing environmental impact. By identifying waste, measuring outcomes and making informed investments, companies in the paint and coatings sector can develop supply chains that are efficient, resilient and responsible.
