Supply chain collaboration and sustainability

As has already been written, there are six main pillars that support a smart, efficient, flexible, and customer-focused supply chain.

One of those pillars is intelligent network and operations design and risk management. This entails segmenting end-markets and channels, differentiating service offerings, and designing intelligent supply chain networks (including locations, inventories, and flows) across the product life cycle, while monitoring systemic risks over time.

• The six pillars of the independent supply chain:
  1. Intelligent network design and risk management
  2. Smart forecasting and integrated business planning
  3. 360° sourcing analysis and supplier collaboration
  4. Touchless and agile order to delivery
  5. Supply chain as a service
  6. Supply chain control tower and end-to-end performance management.

The aim is to create an intelligent design that doesn’t just achieve a balance between resilience and performance, but that also delivers on sustainability – which is as important a business imperative as any other.

Improving sustainability performance

How can organizations improve their sustainability performance? There are three main ways.

The first requires transformation of the network design. It’s all pretty obvious, really – but that doesn’t make it any less necessary. We’re talking here about reducing transportation distance, frequency, and risks, and selecting the most appropriate transportation mode. It also means making the best possible use of transportation and warehousing assets, while minimizing their environmental footprint – for example, green and shared warehouses.

The second one focuses on the last mile. Changes might include multi-modal delivery solutions in urban environments, and partnering with sustainable last-mile delivery players. An efficient collect-and-reverse flow will also enable end-of-life treatment and refurbishment for products, which is yet another good thing.

The third main way in which organizations can improve their sustainability performance concerns the improvement of end-to-end planning and orchestration. When visibility is improved throughout the supply chain, organizations can optimize resource consumption, waste, and stock levels.

This is particularly important in the food industry, where nearly one-third of all the food produced in the world is never eaten. Indeed, most industry segments share this same pattern: too much waste, not enough re-usage and re-cycling.
Advanced analytics, combined with data sharing through digital platforms, and including customers, suppliers, and subcontractors, can help organizations limit the impact of their waste along the chain.

Transparency and traceability

Let’s look in more detail at the visibility issue, and in particular at transparency and traceability.

I said earlier that sustainability is as important a business issue as any other, and transparency plays a big part in it. According to NielsenIQ, 73% of consumers are willing to pay more for a product that offers complete transparency. People want to know where things come from, because there is a growing awareness that there are different ways in which we can all improve on the CO2 footprint.

Transparency in this respect means supply chain intensive corporations need to measure their footprint – either with appropriate tools, or the support of a partner – and to do so continuously, not just a few times a year. This, in turn, means businesses need to make the products and materials in their supply chains traceable.

It provides tangible proof of sustainability claims, and it also supports a more agile and efficient supply chain – including suppliers upstream – with lower levels of waste and resource consumption.

There are four main challenges to overcome when implementing a traceability program:

• Tracing back through the initial raw materials channel and collecting information on origin, composition, manufacturing process and flow at each step of the value chain
• Ensuring the collection of data, its authenticity and consistency, while guaranteeing suppliers’ independence and data protection when setting up a connectivity platform
• In a large ecosystem, collecting sustainability proofs and guarantees and making them transparent to customers with an end-to-end data platform
• Reconciling available data in a clean way, even if it comes from poorly managed or non-harmonized databases.

Sharing best practice in sustainability

How are those desired sustainability improvements to be achieved, and how can these traceability challenges be addressed?

Collaboration with a committed partner can be a big part of it. For instance, here at Capgemini, we have a dual ambition: to become carbon neutral by 2025 and net zero by 2030, and to help clients save 10 million tons of CO2 by 2030, including making supply chains more sustainable.

When they work with us, the operations of client organizations benefit by the back door, as it were, from our own sustainability efforts. Incidentally, the same principle can be applied to the whole supply chain ecosystem. Some potential partners will have their own commitments to the green agenda – for example, those who provide more sustainable warehouse or transportation operations – and choosing to work with them will add impetus to the organization’s own environmental momentum.

Another big part of it is sharing and understanding both best practice and the latest thinking. Capgemini recently launched Climate Circles, in which business leaders come together to redefine what it means to be a responsible business, and in particular, to share ideas on sustainability transformation for positive change,

Leaders were presented with two choices for discussion:

• The race to net-zero – key topics around the global climate emergency, fore fronting the science and facts around climate change. The discussion focused on each person’s own beliefs about climate change to lay the groundwork for a review on the role of businesses in this equation
• Breakthrough and innovation for a sustainable future – the role of industry in the face of climate change, focusing on technology and innovative solutions to address the global climate crisis. There was an evaluation of Capgemini’s business capabilities to understand how it can enable global development for a sustainable future

It’s not just about what organizations can learn about themselves. It’s also about us, here at Capgemini, learning about how we can help.

Our aim as a business is to bring together a range of assets and experience in optimizing supply chain networks that can help our clients realize their performance, new business opportunity, and sustainability goals. For instance, we’ve helped businesses achieve a 15% decrease in the CO2 footprint of the entire value chain.

Supply chains are important not just for businesses, but for the people they serve – and for the planet we all share.