Supply Chain Management is becoming an innovation centre in business, and that could pay huge dividends in sustainability.
In September, the U.N. climate summit convened in New York. It saw leaders from around the world pledging new initiatives to address the ongoing climate crisis, including a $60 Billion renewable energy commitment from Germany, and 15 countries including Britain, Norway and Costa Rica pledging to achieve net-zero emissions by 2050. World leaders are responding to massive climate protests and strikes around the world, with students inspired by activist Greta Thunberg and others demanding more action.
Around the world, people are demanding more from their governments, business communities, and their fellow consumers to help create a more sustainable future. None of these three communities can solve the crisis alone, but all have a part to play. We’re a recruitment company deeply specialized in the world of Supply Chain Management – which includes Procurement, Logistics, Distribution, Planning and other functions that involve bringing products from raw materials to market.
As a business area, Supply Chain Management’s influence has grown over the past number of years. It has more impact on company strategy than it did even a decade ago. Companies have realized that big data allows them unparalleled insight into the best ways to source raw materials and products, and the best ways to move those products to consumers – and Supply Chain Management has become a key strategic differentiator in a number of industries.
Supply Chain activity – all the sourcing, transportation and storage that companies rely on to bring products to market – accounts for a significant portion of the world’s greenhouse gas emissions, as well as waste. But world-class Supply Chains differentiate themselves through efficiency. It’s what we do, as a profession. There are huge opportunities, all along the chain, to make a real impact: to reduce waste, provide more visibility into where products come from, and make the system more sustainable.
Call us biased, but we think Supply Chain Management is uniquely poised – compared to other business functions – to drive the kinds of tangible changes that will improve sustainability. It’s also poised to deliver those changes in a way that will provide value to business, instead of becoming a new cost centre.
And we aren’t alone in thinking that: two years ago, research firm Gartner added a Corporate Social Responsibility score to its criteria for ranking the top 25 Supply Chains in the world – which is one of the industry’s biggest awards. It reflects the growing importance of these initiatives within Supply Chain organizations as companies look to the function to improve sustainability and transparency, rather than just lowering cost and delivery times.
In our recent interview, Supply Chain Canada President and CEO Christian Buhagiar said: “Supply chain professionals are leaders in the push for sustainability—in packaging, product design, warehouse operations and facilities, transportation, vendor management and more. They’re at the forefront of this future-focused work.”
We couldn’t agree more.
An interesting article in Forbes caught our eye recently. Written by SAP Vice President Richard Howells and titled, “How to Feed 10 Billion People – the Supply Chain Challenge of the Future,” the article speaks to a lot of these issues, and outlines the unique ways that Supply Chain Management can contribute to addressing sustainability challenges in the food system in particular.
As Howell article describes, global agriculture production has to go up by 60-70% to meet expected food demand by 2050, and many existing food production methods have outsized impacts on the environment, including beef and other meat production. In short, current trends aren’t sustainable with projected population growth.
Howell outlines how consumers, suppliers and manufacturers all have a role to play. Consumers need to shift their dietary habits to more sustainable products like fruits, vegetables and legumes – a shift that corporations are responding to with the rise of so-called “Meatless Meats.” Suppliers – the farmers at the far end of the supply chain – will need to adopt technological solutions like precision farming to increase yields. And manufacturers – the companies bringing these products to market – need to do their part to eliminate waste.
That last part is what we want to focus on, because that’s the part where Supply Chain Management professionals can do what they do best – and where the function is set to take on even more prominence than it’s already gained.
Currently, one third of food produced for global consumption (worth $680B) is wasted every year, which is a staggering figure. A considerable portion occurs in consumers’ homes, but a massive chunk of waste occurs along the chain from manufacture to delivery – in places under the strategic vision of the best Supply Chain professionals.
As we wrote about a few months ago, numerous organizations are advancing Supply Chain solutions to food waste. In his article, Howell outlines a few more ways that Supply Chain organizations can contribute to a more sustainable food system. They can work to source packaging that can extend the life of products and track freshness and viability. They can use supply and inventory planning to lower the distance products travel – and thus emissions – in the food system. They can use ethically-sourced materials and more efficient methods in manufacturing, and they can they can shift to more sustainable delivery models.
All of it is on the table, if the leadership and talent are there to make it happen.
Reducing waste is just part of Supply Chain’s contribution to more responsible business. There’s also potential to improve human rights by vowing only to work with responsible suppliers, and potential to improve transparency by offering consumers more insight into where their products come from. But we recommend checking out Howell’s article for a sobering but encouraging picture of how Supply Chain can chip in with food in particular.
Solving the 21st century’s global challenges is a tremendously difficult effort. It requires will and collective action from governments, corporations and consumers. But within the business community, Supply Chain Managers are well-positioned to contribute solutions better than almost everyone else – if leadership can set the agenda.