The Sustainable Supply Chain Innovations Shaping the Future
Investigate how sustainable supply chain management is being made possible through advances in technology. Learn more about the sustainable supply chains of the future!
All areas of industry now recognise the impact current activities have on the environment, and how important sustainable procurement is to our planet’s future. Climate change, reduced levels of natural resources, and a major shift in consumer habits means there is a spotlight on how businesses promote sustainability like never before.
Procurement and wider supply chain management is uniquely placed to be at the forefront of environmental change, thanks to its global impact and vast interconnected network.
Generally speaking, a sustainable supply chain is one that successfully balances environmental, economic, and social impacts with one another. These areas affect not only the environmental performance of a supply chain but the impact of ethical working practices, human rights records, resource efficiency, and waste management.
At the heart of it all – the supply chain
Interestingly, it is estimated that up to 90% of a company’s environmental footprint is generated via its supply chain.
If you take an overview of a product’s lifecycle from production to retail, it’s clear that supply chains consume huge levels of energy and resources. This leaves a disproportionately large carbon footprint behind but also presents a significant opportunity to promote tangible change.
According to The Paris Agreement, stakeholders across global supply chains need to curb their greenhouse gas emissions by over 50% in the next 8 years and eliminate it by 2030.
Aside from the obvious environmental benefits, addressing sustainability issues makes perfect commercial sense.
Up to 85% of modern consumers are more likely to purchase from ethically and environmentally conscious manufactures meaning the promotion of sustainable practices often leads to a competitive advantage.
What’s more, according to CDP research, companies that proactively integrate sustainability into their business functions are set to benefit from cost reduction while minimising both vulnerability and risk. This amounted to an estimated $33 billion in 2020.
Further to this, the same research estimated that $1.2 trillion worth of revenue is at risk for those who fail to tackle sustainability issues by 2025.
But what solutions do we have at our disposal to ensure ethical and sustainable procurement?
1. 3D printing/additive manufacturing
3D printing is still relatively new to industry, despite having been first developed in the 1980s. It allows companies to create and manufacture new stock whenever needed and has the potential to reduce C02 levels emitted via industrial manufacturing up to 5% by 2025.
Further benefits of using 3D printing include being able to recycle waste from other products and dramatically reducing both transport time and emissions.
There are, however, still some reservations over the environmental credentials of 3D printing. These are mainly due to the production of ultrafine particles and the fact that the resulting products are often not recyclable. As commercial 3D printing is still in its infancy, these concerns are sure to be mitigated in the coming years.
2. Blockchain
The adaptation of blockchain technology from its crypto beginnings has huge implications for supply chains. It allows businesses to record every step of even the most complex chains using encrypted data that cannot be independently erased or edited. This leads to much more transparency and accountability throughout the supply chain, ensuring sustainable practices are followed at each stage.
This leads to clearer product histories and more efficient chains that consume fewer resources. You can read more about how blockchain is set to change procurement in our recent article.
3. Machine Learning & Artificial Intelligence
It seems that AI and machine learning are impacting all areas of everyday life, from targeted ads in our smartphones to digital voice assistants in our homes. The supply chain industry is no different and these advances in technology have already begun to make their impact felt.
They have brought about never-before-seen automation powers that facilitate things like planning, demand forecasting, synchromodality, predictive maintenance, and collaborative shipping.
They achieve this through the use of numerical analytics and scenario analysis. The same functions could be used to reduce operational costs, decrease error levels and optimise the entire chain. All of which would result in a more efficient and greener procurement process.
Joint research carried out by PwC and Microsoft concluded that AI could help to reduce greenhouse gas levels by 4% globally before 2030.
4. Robotics and automation
This is an area that came into particular focus with the outbreak of the COVID-19 pandemic. Online shopping rose astronomically and with it, so did customer expectations. With delivery expected to be cheaper and quicker than ever, warehouse capacity and last-mile logistics were pushed to near breaking point.
Robotics and automation within the supply chain were some of the key tools used to mitigate these issues. Drones, delivery robots, disinfection robots, and automated inventory management systems all played their part in ensuring the continuity of the supply chain. As we begin to look forward, we expect automation to play a key role in ensuring sustainability since it provides an accurate and efficient alternative to human operators.
5. Smart plastics
Plastic waste sits right at the top of consumer concerns when it comes to the environment. Thanks to substantial investment, the packaging industry is stepping up its efforts to combat these concerns by developing alternatives to petroleum-based compounds. Efforts so far have included a variety of sustainable alternatives, including compounds based on milk, sugarcane, starch and wood.
As well as research into potential new plastics, work has been going into ensuring packaging is designed in a much more environmentally friendly way. UK recycler Vanden has been advising packaging manufacturers on how to best remove elements that hinder recycling such as mixed polymers and barrier layers.
Innovators are also harnessing the power of nanotech to optimise packaging for efficiency. The use of nanotech alters plastic on a molecular level, meaning food packaging could start to change colour should its contents go bad. Helping to reduce wastage is all part of the wider push for sustainability.
The business benefits of investing in a sustainable supply chain are endless. Read this to find out why.
To learn more about the digital procurement solutions pioneering the industry today, the ProcureTech100 Pioneers Webinar on November 10 is an event not to be missed! Register here to secure your place.
