Supply Chains, Sustainability and the Digital Transformation
Supply Chains have various levels of communication; between consumers, customers, businesses and suppliers. The feedback loop for improvements and refining practices runs both ways, from top to bottom and vice versa.They are global networks, and are constantly evolving and adapting on business and network levels to achieve more efficient, sustainable and accurate results.
As with any collaboration, supply chains work most productively when links are strong and communication is seamless. When each link has streamlined internal processes and has a clear understanding of the processes that it is responsible for, then each link in turn is strengthened.
Supply chain links equally need to communicate between one another to reach these improvements, because by their very nature, they are dependent on one another.
However, a lot of these links know how their business runs, but do not have the appropriate tools to get deeper insights to pin-point weaknesses or to identify room for improvements. In turn, this blindness impacts an entire chain. One study explored the technological delay that Supply Chains are enduring - 51% believe a top concern is the lack of supply chain process visibility, while amongst supply chain organisations - 46% said they lack the necessary technology and 44% stated that their technology needs improvement. For both a more streamlined, co-operative approach to more efficient and sustainable supply chain processes, the need for improved technologies is evident.
Preliminarily, the step towards more sustainable practices requires access to deeper insights about the mechanisms of a supply chain. This relies on more competent digital systems which show the primary areas for improvement.
Big Data and the Internet of Things
The introduction of emerging technologies into Supply Chain processes has allowed businesses to rethink how they could, or should, run. Big Data “enables companies to anticipate what customers will purchase, before they know themselves”. Beyond that, technology has enabled giants such as Apple to achieve Warehouse Automation for massively improved efficiency, inventory management advancements, Wholesalers can make more precise predictions about the right product-lines and customer preferences, as well as providing businesses with complete transparency regarding every aspect of their operation.
When a forward-thinking, sustainability-driven business has access to these technological advancements, they can align practices with goals for a more sustainable future.
Transparency, Visibility & Traceability
As we will discuss from another angle in the following section, Consumers and their purchasing power plays an ever-growing role in the decision-making process of businesses and organisations. Coupled with a rising sustainability movement, greater transparency over the sourcing, packaging and transportation methods used is demanded by global supply chain links. This transparency converts into trust, with both other network members and end-consumers as sustainability continues to influence all areas of business.
In the last few decades, visibility over supply chain operations has improved drastically - GPS tracking allows teams to watch deliveries take place in real-time, cloud-based systems allow different teams transfer information both internal and externally, and analytics give management a crystal clear view of growth, productivity and profitability.
Traceability can be thought of as accountability. In 2016, Canned fish giants, John West, were accused of using fish aggregating devices to catch tuna to meet global demand. This resulted in an enormous amount of bycatch, and the exposure resulted in Greenpeace announcing a campaign to boycott the company. John West has also been accused of a complete lack of transparency over where their produce comes from. This example shows both the necessity of transparency and drastic consequences should a company not be able to account for its produce.
Translating into broader supply chain practices, traceability allows businesses and consumers to see how their goods travel. Paired with transparency and consumer perceptions, this will build trust and help to secure a progressive and reliable brand image.
Consumers want to know more about the products they buy, more than ever. Where a product came from, how it was transported and whether it was responsibly sourced or not are now very influential factors for end-consumers and B2B transactions.
As the world perpetuates more and more sustainable practices, consumers vote with their money, and this end decision has a big impact up the ladder, with access to more data exposing this phenomenon to supply chains.
Speaking locally, retailers aim to please customers, so they will continue to promote product-lines that are selling quickly. Wholesalers and foodservice distributors use systems which let them know which products each of their customers requires and when, and they can use these insights to predict and plan for future product-lines, which accommodate new trends and the ever-evolving demands of the individual consumer.
The global impacts of COVID-19 has accelerated changes that would have taken years otherwise, with regards to both transitioning business models and a reliance on technologies.
We conducted a survey amongst supply chain workers, asking them to highlight the pain-points they have endured during these widespread disruptions, as well as more general concerns about supply chain operations.
Of these participants, 75% agreed that Supply-Chains were under-prepared for the current disruptions, 87.5 thought Technologies could help manage fluctuating demand and avoid disruptions, and 100% agreed that manual processes are error-prone and technologies would ease planning processes.
When asked why they thought Supply Chain links were not adopting new technologies as quickly as other Industries, participants raised concerns over a ‘cultural resistance’, alongside the cost and implementation time of digital logistics and delivery management systems.
Despite these concerns over the costs of transitioning to new technologies and digital ways of working, as the use of digital technologies in supply chain processes becomes increasingly common, they will become more accessible and progressions will accelerate.
Investments now are being made by proactive networks which are set on placing sustainability as their key aim as we move forward into the digital age.
At the same time, there is a growing demand for businesses to be transparent about their internal processes - Consumer pressures are now felt on a wider scale, with suppliers and distributors needing to know and share more about the entire supply chain process.
This visibility can be utilised to target weaknesses in the chain, with more sophisticated data insights helping to improve efficiency and productivity for individual businesses and entire supply chains.