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Defined as a holistic view of supply chain processes, logistics and technologies that affect the environmental, social, economic and legal aspects of a supply chain’s components, supply chain sustainability finds companies identifying the source of their raw materials, ensuring good conditions for workers and reducing their carbon footprints (among other strategies).
80% of Companies are All-In
According to MIT, even companies that were disrupted by the Covid-19 pandemic maintained a focus on supply chain sustainability, knowing that the long-term views of operating in a more environmentally-conscious manner weren’t going away due to the pandemic.
According to MIT, more than 80% of companies say the pandemic had no impact or increased their firms’ commitments to supply chain sustainability. And, 83% of the executives interviewed said that Covid-19 had either accelerated this activity or, at the very least, increased awareness and brought urgency to this growing field.
Given the current momentum of this movement, the future will likely bring more investment in this increasingly important area of supply chain management. “The pressure to support sustainability in supply chains came from multiple sources, both internal and external,” MIT’s Ken Cottrill writes, “but increased the most among investors and industry associations. Internally, company executives were standout champions of supply chain sustainability.”
Making Key Changes
As more companies strive to operate more sustainably, technology is stepping up to the plate and helping them achieve these goals. When they have accurate data to work with, for example, companies can deploy a fairly straightforward process for identifying and addressing potential sustainability issues. Then, they can set benchmarks to compare supplier performance on relevant chosen metrics that matter early on in their processes.
“Artificial intelligence-powered supplier discovery tools can then integrate these benchmarks into the automated process of narrowing down all potential suppliers into longlists,” Gregor Stühler writes in How AI Is Paving The Way For More Sustainable Supply Chains.
With a significant portion of global greenhouse gas emissions (GHGs) generated by freight transportation, which can also drain a company’s financial resources (i.e., inefficient shipping routes or vehicles driving empty), Stühler says advanced data analytics can help reduce these impacts. When teams can calibrate production based on fluctuating variables like weather, for example, they can continually update demand forecasts.
“In addition to charting efficient transport routes,” Stühler adds, “AI-enabled logistics platforms can make recommendations for other ways to improve efficiency, such as consolidating shipments.”
The Tech-Sustainability Connection
In 10 Technologies That Promise a More Sustainable Supply Chain, Global Trade Magazine explores some of the top ways companies can drive sustainability in the supply chain, which in some cases accounts for more than 90% of an organization’s carbon footprint.
“The growing demand for sustainable business practices has business leaders looking for ways to shrink company carbon footprints and environmental impacts,” the publication adds. “Many new technologies from inside and outside the industry could soon transform the supply chain and help make it far more sustainable.”
For example, biodegradable packaging can replace plastics and Styrofoam—both of which may take thousands of years to break down—thus reducing the long-term environmental impact of non-biodegradable packaging. Electric cars used in vehicle delivery fleets and for last-mile deliveries; e-bikes (for dense, urban areas); hydrogen aviation and ship fuel cells (which produce no emissions); and electric or hydrogen semi-trailer trucks can all have a positive impact on a company’s overall supply chain sustainability.
“As electric vehicle infrastructure expands, it may quickly become practical for shippers to switch from conventional trucks to electric ones,” Global Trade points out. “This could significantly reduce one of the supply chain’s most significant sources of carbon emissions.”
More to Come
Other technologies that Global Trade expects will contribute to supply chain sustainability include demand forecasting algorithms (for developing a better picture of what customers want and when); modern telematics solutions for better driver behavior analysis; route optimization tools; and blockchain, the latter of which gives businesses “the means they need to improve supply chain transparency and guarantee ethical sourcing practices.”
“Blockchain technology can make businesses more secure and transparent by providing a record of immutable truth across the supply chain,” Mai Tao writes in 7 Supply Chain Technology Trends Shaping a Sustainable Future. “Products and materials can be accurately traced back to their places of origin. This will certainly provide a better line of sight into a product’s history while improving practices like eliminating redundancies and bottlenecks, and eventually, consuming fewer resources.”
Knowing just how important environmental stability is to both current and future generations, DB Schenker takes supply chain sustainability very seriously and is continually adopting technology to help it work toward its sustainability goals in a smarter, better and faster manner.
“As a provider of global logistics and transportation services, we implement sustainability as a core of our business practices,” says Richard Ebach, CIO Americas, from DB Schenker. “We’re committed to being a sustainability leader and a socially-responsible business partner in the global communities that we serve.”