Another Climate Change conference, with yet another set of ambitious agenda items. Expectations seem to be shifting from skeptical to cautiously optimistic. This shift seems to be a product of global enterprise recognizing the value of transparency and visibility throughout the value chain. With digital technologies playing a key role in the transformational journey towards sustainability.
The stakes are clear, or should be to anyone who has been paying attention. Running in parallel to the narrative of a changing climate and all of its impacts, is the digital transformation and the change that it brings to society, organizations, people and consumer expectations. The shift from carbon based to renewable energy is running in tandem to the disruptive and ground breaking impact of digital on enterprise activities. These phenomena should not be seen as mutually exclusive or happenstance.
Sustainability as a trend is supported in large part by awareness. With digital technologies, consumers are becoming informed and the brand availability has expanded exponentially.
So how does digital impact sustainability?
Well, for one, the average Joe and Jane has a leveraged position in the brand/consumer relationship. They instantly Google brands and products, scanning reviews, analyzing tweets, collaborating with previous buyers and having a wide range of information at their finger tips. Buying decisions have become crowdsourced. Brands now have a clear business case to operate under the assumption that every aspect of their business can become public, in a big way. Full transparency is the baseline.
This is a great incentive to transform business processes and take a holistic review of an enterprise’s increasingly global Value Network. Taking a customer centric viewpoint, companies are turning the “Don’t be evil” corporate motto into a new litmus test for cross functional strategy. In order to achieve this strategy, managers are deploying digital solutions and advanced analytical tooling to monitor key business activities proactively.
Sustainability has moved from an afterthought to a strategic goal within enterprises in a cross section of sectors and markets. Most organizations used to park sustainability in corporate communications or public affairs. Today, sustainability is embedded within every function of an organization from procurement, transportation, distribution, product design, retail and finally end of product life.
Taking a focus on the Consumer Goods and Retail sector, issues like food waste, water scarcity, sourcing visibility, sourcing reliability, transportation impact (including cost predictability), and auditable sustainability reporting requirements are spawning digital solutions that go far beyond the traditional transactional packaged software solutions.
For example, in June this year, the Consumer Goods Forum (CGF) held its annual summit in New York and introduced its Food Waste Resolution. The goal of this resolution is a 50% reduction in food waste within the operations of retailers and manufacturers by 2025. This was signed off by more than 50 of the globe’s largest consumer goods, manufacturing and retail organizations.
According to the UN, 30% of food produced is being wasted each year (1.3 billion tones) at a cost of $750 Billion annually. This strategic declaration is just a first step. The next level involves deploying digital in order to reduce waste and optimize the process, farm to table. Digital technologies are helping in the fight to end hunger.
So what are some examples of how digital can help this specific target?
- Perishables management: demand and supply planning to insure that perishables have a quick route to a market that is ready to buy. Taking elements like dynamic digital pricing in store, big data analytics to anticipate spikes in potential demand, promotion and loyalty management to help get attention for the products at their peak freshness.
- Farmer – Manufacturer relationship: Digital innovation in the agriculture space is notoriously behind the curve. However, every inch of innovation has the potential to be disruptive on a global scale and solve some of the most crucial food safety concerns. This includes farmer enablement with crop yield visualization, access to a wider audience of potential buyers, price management, and increased communication with downstream partners. Additionally there are solutions entering the market for agricultural workforce management, cost management (water, fertilizer, equipment etc) and even predictive analytics using real time data on weather, soil, air quality and crop maturity to make smarter harvesting decisions.
- Farmer – Livestock relationship: This is REALLY cool. Predictive analytics for livestock farmers might not sound like the most logical next step in digital. But it’s here. One company on the cutting edge is Silent Herdsman. Founded by Ivan Andonovic and based in Glasgow, Silent Heardsman aims to be the leading global provider of analytics software for dairy and beef farmers. The idea is that with a wearable device, cows will provide continuous streams of data enabling farmers to act preventatively and strategically with their herds. Identifying patterns that indicate sickness, pregnancy and field preferences can help raise yields substantially.
- Disruptive Social Food Apps – Food retailers (grocers, restaurants, catering companies etc) are seeing an increasing focus by consumers to how much food ends up in the bin. This pressure helps drive a business case for efficient production planning, and inspire disruptive players to enter the market. Launched in 2014, PareUp is an app that enables retailers to post unsold, unexpired food at a discount. Users then can browse listings nearby them and redeem their discount. The fact that retailers and consumers have a net benefit makes these kinds of innovations super disruptive. Retailers have additional revenue, are able to move stock faster, consumers get food at a discount. On a more consumer to consumer level, Apps like Leftoverswap, Ratatouille, Olio, Thuisafgehaald (NL) are more focused on the local exchange of leftover cooked food from consumer to consumer.
It’s fascinating to see the broad range of [digital] opportunities coming out of a critical problem facing humanity.
The next iteration in this expedition is to explore opportunities to deploy digital in pursuit of increased visibility/transparency along the value chain, better control over processes with heavy impact on resources and environment. In tandem, organizations need to set strategy that engages their employees along that journey towards continued, sustainable growth and development.