According to an article from CIPS, The Chartered Institute for Procurement & Supply, 80% of people working in supply chain say they have little to no awareness of or involvement in a corporate sustainability strategy, yet most emissions come from a company’s supply chain. There’s clearly a disconnect between the rapidly growing sustainability problem and the people who have the power to address the supply chain’s contribution to it.
Deborah Dull, Vice President and Global Supply Chain Sustainability Leader at Genpact and Josué Velázquez Martínez, Research Scientist, Lecturer, and Director at the MIT Sustainable Supply Chain Lab and Center for Transportation and Logistics believe the answer lies in making sustainability operational.
At the moment, there isn’t a magic switch to flip that will automatically improve companies’ sustainability practices. There is, however, data – which is key to operationalizing sustainability. The massive amounts of data that companies possess can be extracted and used to inform business and supply chain decisions that fuel growth while making a positive impact on the planet.
Deborah illustrated the point by saying in a recent podcast, “As you introduce new pieces of data to supply chain professionals, it’s important to consider what decisions you are trying to interrupt and how much weight you give to each algorithm and optimization. For example, introducing carbon data into planning and operational systems allows a planner responsible for a container ship moving from China to the Port of Los Angeles to analyze not only the distance but also the benefits of delivering the heaviest goods first, minimizing carbon emissions. These tactical decisions will open a range of conversations that will help refine the data and drive more sustainable decision making.”
Why highly-detailed data is essential to unlocking complexity
Supply chains are undoubtedly complex. “Sometimes particularly complex problems require more complex or comprehensive envisioning of the problem,” added Josué. “Getting to the highest level of data detail and being able to process that information will allow you to come up with solutions to complex problems.” Data will prove to be essential as companies layer the complexity of analyzing sustainability impacts on top of tracking traditional supply chain measures like service, cost, and speed.
Operationalizing sustainability can have a ripple effect throughout the supply chain. When companies share data related to emissions and other sustainability impacts, they add a layer of transparency that informs other entities in the supply chain and enables collaboration to achieve sustainability targets on a broader scale.
As with any new corporate initiative, incorporating new sustainability processes can be overwhelming. To begin, start small and examine the carbon impact of an item in your custody from the time you receive it from a supplier to when you ship to a customer. Once you understand how the analysis can inform change, you can expand from there.
There’s no doubt, new pressures are forcing companies to take action to improve supply chain sustainability. Practices that were sustainable ten years ago are not sustainable now. It’s a constant evolution and companies will need to stay vigilant. Try to be aware of the vulnerabilities in your supply chain and identify the risks associated with current supply chain operations. Before long, protecting our planet’s resources as part of regular operations will become second nature.
Watch our latest Big Ideas in Supply chain video podcast to dive deeper into this topic:
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