Globalization and advancements in technology are transforming supply chain management. Because of this, it now has the potential to make a big impact on the corporate responsibility strategies of today’s organizations. While supply chains in some industries – such as food and retail – have come under scrutiny for unnecessary complexity or lack of transparency, digitisation now allows for the entire supply chain to be monitored, measured and optimised. This provides both the pressure and opportunity companies need to run their supply chains more efficiently and sustainably.
Today, technology enables organizations to operate, control, and maximize connected supply chains: for example, maximizing a half-full shipment from point A to point B by identifying other nearby product needs, or by tracking trends in order volumes for future production quantity requirements. It is also important to collaborate with multiple players – especially with the increased expectations from consumers for next-day delivery and reducing both transport cost and a product’s carbon footprint.
Weastflows (west and east freight flows), an INTERREG IVB North West Europe (NWE) project funded by the European Regional Development Fund (ERDF), aims to improve and enhance freight logistics across the region. Focusing on infrastructure, sustainable multi-modal logistics, ICT and telematics, and knowledge sharing, this industry-wide project has the potential to signal a step-change in sustainability.
With 21 percent of global carbon emissions originating from road transport, there is increasing pressure on organizations to reduce their reliance on it. In 2007, Procter & Gamble set a 2015 target to reduce road kilometers traveled by trucks by 30 percent. This was achieved across Western Europe by moving distribution centres closer to customers and switching to rail and inland shipping, which are eight times less carbon intensive.
The potential role of technology and data in streamlining supply chains this way, and, therefore enabling organizations to operate more sustainably, is immense. The challenge, however, is the complex task of capturing and analyzing the vast amount of data. IT and software innovators are coming up with solutions that enable manufacturers and exporters to capture, handle, and interpret the data. And it is expected that by 2016, more than 40 percent of new logistic application purchases will be delivered through cloud-based systems. Sharing data among competitors and supply chain partners is the next logical but challenging step in the quest for extreme efficiency. A key question will be whether different parties are prepared to share information for the benefit of all, or whether keeping certain things confidential might help them to gain competitive advantage.
Being able to make decisions based on real-time data, such as halting production of a popular product that is going out of fashion, could avoid companies ending up with warehouses full of unwanted stock. Equally, for retailers or brands, having the ability to track exactly where products or components come from improves transparency in the supply chain that will enable brands to fully implement their ethical and sustainable sourcing policies. Ultimately, this will help protect their reputation from potential crises.
The future of the global marketplace is in automating supply chain management systems to streamline processes, enable efficiencies, and make organizations more nimble in adapting to market changes. It is encouraging that a key consequence of this will be an improvement in the sustainability and social responsibility of organizations, whether that is their primary intention or not.
Kate Howe – Managing Director, gyro London
Kate Howe is the managing director of gyro London. Howe most recently served as European president for Draftfcb where she aided in the London acquisitions of digital agency Blue Barracuda and integrated agency Inferno. While at Draftfcb, Howe also managed the global Beiersdorf account and successfully led a number of local pitches and defended the Post Office direct response account.