Question

How does technology reduce the environmental impact of supply chains? What have been the past challenges, how were the challenges overcome and what does the future hold for technology in global supply chain? Select an industry / a target market and discuss how you would market these new trends to improve their organization and profit margins.

Answer 1

Q.1) How does technology reduce the environmental impact of supply chains?

Global supply chains are growing and becoming more complex as consumer demands are increasing. This greater need for products, ingredients, and raw materials directly translates into increased environmental impact. Organizations can help to reduce the environmental impact of the supply chain through the smart use of technology. A forward-looking supply chain strategy combined with the right technology solutions will help organizations build more sustainable, responsible, and ethical supply chains. The following are the ways in which technology would reduce the environmental impact of supply chains –

a) Identifying risky suppliers - Risk management in supply chains is one of the most important elements. Not managing this part effectively can result in serious consequences. Technology can help manage risks by automating the risk management process, supplier self-assessments, and code of conduct surveys. For example, suppliers can be automatically screened for risks based on their country of operation, products, existing audits, and using pre-existing data.

b) Measuring and anticipating your carbon footprint - Shifting to a low carbon economy means reducing carbon emissions not only from direct operations but from the supply chain too. There are software tools that can help businesses to determine the carbon footprint of each supplier and calculate their own carbon emissions per dime spent. In addition to software can be used to anticipate what the carbon footprint of future purchases might be, and make informed decisions.

c) Drive Efficient Supply and Demand Planning to Reduce Overproduction – artificial intelligence, machine learning, and predictive analytics can predict likely demand and ensure much more efficient supply and manufacturing processes.

d) Optimize Routes to Reduce Fossil Fuel Consumption - Artificial intelligence can work with GPS devices to optimize international, national, and local shipping routes. Advanced analytics can even update routes in real-time to take account of congestion and other issues.

e) Consolidate Shipments to Fully Utilize Containers and Transportation – Predictive analytics can predict where and when goods are going to arrive and consolidate shipments from multiple suppliers going to multiple final destinations. This makes the most efficient use of assets (i.e., containers, trailers, etc.) and transportation, reducing the total amount of greenhouse gasses generated per unit of cargo.

f) Plan Around Existing Environmental Risks and Impacts - Supply chain technology helps to predict risks and allows supply chain managers to mitigate the impact and put contingency plans in place.

g) Streamline Supply Chain Processes to Reduce Waste - Good analytics and reporting work with machine learning to continually improve processes throughout the supply chain. Every change that slightly reduces waste, speeds up delivery, or enhances quality can make a tiny, incremental improvement to sustainability.

Q.2) what have been the past challenges?

The environmental impact in the supply chain isn’t limited to greenhouse gas emissions. Water scarcity, issues with land use, toxic waste, water pollution, deforestation, air quality, and energy use have all been impacted by global supply chain management.

- Practicing sustainable supply chain initially is a costly affair as it encourages green products/services, green technology, green energy. A lot of money has to be spent on R&D programs.

- The customers may not believe in the effectiveness of the firm’s green strategies. The firm therefore should ensure that they convince the customer about their green initiatives.

- Initially, the profits will be very low since renewable and recyclable products and green technologies are more expensive.

- Many customers may not be willing to pay a higher price for green products which may affect the profitability of the company.

- It would be hard to convince the stakeholders and there would be the unwillingness to believe and co-operate.

- Lack of motivation or lack of awareness from the side of the corporate leaders towards going green or choosing and implementing the appropriate green strategies for their supply chain.

Q.3) how were the challenges overcome?

The challenges were overcome by bringing about awareness about how the adoption of environmental strategies and supply chain initiatives would benefit the business –

- Mitigation of business risks by differentiating from competitors, transforming companies into industry leaders, building credibility with stakeholders, and attracting investors.

- Motivating better performing suppliers who adapt to a sustainable supply chain.

- Create a significant competitive advantage by creating brand distinction and recognition

- Bringing awareness that sustainable supply chain reduces carbon footprint and reserves planet's natural resources as majority of the carbon footprint is related to transportation and logistics activities.

Q.4) what does the future hold for technology in the global supply chain?

Earlier, the supply chain was mostly about logistics and keeping track of when and where goods were moving. The changing face of supply chain and digitization has led to responsible sourcing and encouraged supply chain partners to develop and share best practices for green operations and logistics.

New technologies would positively impact the way supply chain functions. For example supply chain stakeholders can reduce their environmental impact by adopting technology to improve resource efficiency and environmental sustainability. New technologies would make things easier in the form of new software and applications which are meant to ease numerous tasks and at the same time encourage supply chain sustainability.

Technology would increase the visibility of businesses which would help in ensuring efficient transactions, while promoting food safety, efficient recalls, the elimination of counterfeits, and the assurance of ethical trading partners.

Q.5) Select an industry / a target market and discuss how you would market these new trends to improve their organization and profit margins.

Technology has evolved, allowing software elements to greatly benefit companies across the transport industry by aiding them with the capability to optimize driver miles, reduce empty running miles, and capture accurate information. Operations in the transport industry require optimization and planning which can be achieved through a TMS (transport management system). Pallet and equipment tracking which used to be a manual task with high losses has now become highly efficient because of the use of TMS. Transport businesses can capture quantity and types of equipment received and dispatched all through the software system.

Reasons to buy an integrated system are –

1) Inventory visibility for both, warehousing and transport teams thereby ensuring both sides of the business are in sync. The integration of WMS (warehouse management system) and TMS (transport management system) would minimize lead time variations and reduce large inventory buffers. Thereby reducing the inventory storing cost and creating a more reliable forecast.

2) Reduction in supplier’s operational cost thereby leading to sustaining fair product cost which would help in maintaining customer satisfaction.

3) Use of integrated system leads to reduction in cost of management of different processes and also makes the entire process highly efficient.

4) Reduction in lead time as there is clear visibility and sharing of information across all functions.