Sustain the Chain With Technology
Supply Chain Management, Kean University and author of books on Lean and the Supply Chain for McGraw-Hill, Pearson, and Productivity Press
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Today, more than ever, it is important that we build sustainable supply chains that positively impact business, society, and the planet. To meet customer expectations and be truly sustainable, organizations must ensure responsible business practices internally and across the entire value chain.
Eight in 10 supply chain executives responding to a 2022 global EY study said they are increasing efforts toward sustainable operations, but the complexity, lack of visibility to global supply chains, and the need for resilience create challenges.
The reuse and recycling of products, improved efficiency, and the use of renewable energy could reduce up to 40% of emissions in supply chains, with just a minor impact on product pricing, notes the World Economic Forum.
By leveraging technology through a digital transformation, businesses can achieve transparency, energy efficiency, and waste minimization across their entire supply chain operations.
Here’s a rundown of some specific technologies currently being used to create sustainable supply chains and help take sustainability to new levels.
Cloud technology products unify data intelligence and provide organizations with the overall visibility—often in real time—needed to both improve sustainability reporting and track the insights necessary to make decisions for long-term business transformation.
Artificial intelligence and machine learning play crucial roles in enabling the sustainability effort by helping identify trends and patterns in large amounts of data and providing insights that you wouldn’t see otherwise.
Blockchain technology, while still in its early stages, has attracted attention as a record ledger. Blockchain enables organizations to trace each step in the supply chain as well as the carbon footprint changes that result from digital transformation and other attributes.
Public cloud ERP systems can specialize in environmental aspects and automate calculating product and organizational carbon footprints.
Smart devices are—or will be—used to mitigate the environmental impact of supply chain operations:
- Drones used in last-mile deliveries have an impact on customer satisfaction, variable costs, and greenhouse gas (GHG) emissions.
- Telematics can be used to track the condition of a vehicle and the actions of its driver—for instance, driving with low rpm reduces fuel consumption.
- Self-driving vehicles minimize GHG emissions by carrying more items per trip because the driver compartment is used as an additional storage area. Connectivity between these IoTs aids in route and traffic optimization to save on costs and GHG emissions.
Electric vehicles can drastically reduce GHG emissions without a negative impact on supply chain operations if the majority of electricity in a location is generated by green energy sources and adequate charging infrastructure is in place.
3D printing, or additive manufacturing, allows companies to computerize their intermediate goods and re-create them in the next production location using digital code. 3D printing offers several opportunities to lower transportation costs, reduce GHG emissions, and save time.
Supply chain sustainability is no longer a nice-to-have but rather a business imperative to help grow the bottom and the top line.