Using Technology to build Sustainable Supply Chains

Using Technology to build Sustainable Supply Chains

Sustainability is definitely coming of age in Asia. Until recently, most businesses saw commitment to environmental, social and governance (ESG) standards, as a charitable move that lowers returns on investment. However, there is now a growing appreciation that going green correlates with increased profit as demand for products with sustainable credentials grow and Asian companies get set to move up the value chain.

Research by Unilever shows that a third of consumers prefer sustainable brands. What this means is that those companies that aren’t transparent and considerate in their approach to sustainability risk being left behind versus those organisations willing to share their green credentials. In fact, IDC predicts that manufacturers across Asia who digitally transform and accelerate sustainable innovation to improve supply chain operations, will increase their revenue by 20 percent in 2025.

For reasons of climate change and profitability rewards, maintaining a more sustainable approach to the supply chain is obvious. But one of the biggest drivers for an increased emphasis, is the impact of the pandemic on retailers, manufacturers and suppliers, who realise that risk mitigation is critical to a resilient supply chain in times of disruption. As driving greater sustainability is a key factor in reducing risk.

Technology plays a key role in helping companies manage supply chain risk and underpins processes that improve sustainability. A recent BluJay study shows that a majority of supply chain companies are now prioritising investment in their IT capabilities (61%) in order to generate greater operational efficiencies and enhance innovation. IDC also forecasts that by 2023, 30 percent of Asian enterprises will ship freight using a SaaS-enabled platform, resulting in improved efficiencies in load matching and reduced shipping costs.

It is critical that retailers, manufacturers and logistics providers have visibility over the complete supply chain in order to the impact on the environment is minimised at every step of the process. But few companies have the level of visibility across the supply chain to achieve this.

Visibility is vital

Supply chains can often be complex, making it hard to have full visibility across all processes. But newer technologies, like blockchain, are becoming an increasingly popular method for verification and helping to speed up processes. Adoption of blockchain technology enables organisations to track products right through the supply chain providing proof points at every step. Though blockchain plays a vital role in verifying information, it’s not the silver bullet when it comes to achieving a fully transparent and sustainable supply chain. Even with this visibility, finding the balance between customer satisfaction and achieving sustainability, poses a great challenge when data and processes are siloed.

Building a connected supply chain

A connected supply chain breaks down data silos and consolidates data, plans and processes into one central platform. This provides customers, partners and suppliers alike, access to information in real-time. By enabling customer access to supplier information, including sourcing of materials, as well as environmental performance data, all parties in the supply chain, can be made more accountable.

Data is critical to delivering a sustainable supply chain. A collaborative supply chain model helps partners locate the resources needed on demand. It provides capacity where and when organisations need it most. Through utilising a transport management system (TMS), logistics supply chain providers can offer real-time data and visibility across the supply chain.

When it comes to transport, organisations will have visibility of shipments in the network, type of vehicles required for delivery, ensuring optimised loading capacity. Armed with better data, companies can  develop accurate supply and demand forecasting models, localise the procurement of resources and restructure contracts. As more companies prioritise these models, with enabling technologies, the supply chain becomes more sustainable. BluJay has recently earned the “Solar Impulse Efficient Solution” Label for its Transportation Management solution following an assessment performed by external independent experts and based on verified standards for solutions that meet high standards in profitability and sustainability.

The role of artificial intelligence in dynamic routing

The visibility achieved though real-time data tracking is critical to achieving greater sustainability in the supply chain. Having that visibility can help ensure optimised routing to run the most efficient route possible, conserving energy and reducing an organisation’s carbon footprint across its supply chain.

Artificial intelligence (AI) and machine learning (ML) will be key drivers of information visibility and resiliency. The applications of AI and ML can not only optimise stock inventory and cost margins, they play a key role in dynamic routing of deliveries in shortest distance and timeframe possible, to consumers.

Dynamic routing has empowered logistics providers to consider plans B, C and D, offering alternative options of ocean and air freight cargo. This switch is offered to consumers when uncertainties like border closures occur. In turn, it avoids extending the delivery route and adding to the carbon footprint of the trip. An AI and ML’s functionality in dynamic routing, aids the customer experience, as  together they can manage consumer expectations through real-time comprehensive updates. It provides full transparency and total visibility across the supply chain for the consumer. For the consumer they know why their order may be delayed and have visibility of changes in delivery schedule impacted by a change in channel.

How artificial intelligence can create an “asset-less” state

AI and ML enable supply chains to transition towards an “asset-less” state. Matching the correct supply to demand in the given timeframe, results in a reduced carbon footprint and less chance of unwanted products ending up in landfill. This is achieved by AI and ML which delivers more accurate optimised inventory, minimising overproduction and potential errors.

The concept of asset-less state refers to creating a supply chain that is as lean as possible. Using AI and ML to analyse past performance will help organisations optimise inventory. This helps to avoid slow & non-moving stock and red=iced levels of inventory obsolescence.

AI and ML will take the supply chain to the next level. From energy conservation in transit to quality control. Technological innovation is a powerful tool to assist organisations to navigate the complex relationship between to ensure sustainability without adding to the overall cost to serve.

While consumers are becoming increasingly aware of the environmental impact of supply chain practices and processes that fuel their fast-fashion, fast-food and fast-service cultures, the supply chain technology innovations can enable seamless fulfillment of demand, whilst avoiding unintended climate impacts or interference with profitability.

Businesses that optimise visibility will be able to meet customer expectations, and will enable their own operations to run more smoothly in the long term. With a robust network and the ability to react to real-time data, businesses will see a difference in generating and retaining new customers. But to achieve the positive difference, we must strive towards a more sustainable world.

An investment in sustainable supply chains may not pay off immediately; change takes time. Sustainability is a long-term project that needs consideration to balance the needs of consumers with the business’ bottom line. And technology has a key role to play in the journey.

Joseph Lim, Sales Director APAC at BluJay Solutions

About the Author

Joseph Lim is a highly experienced regional sales leader in the Supply Chain, Industrial Automation and Security space. Prior to BluJay Solutions, Joseph assumed various leadership positions including as ASEAN Director with Honeywell Safety & Productivity Solutions, Regional General Manager with Datamax-O’Neil by Honeywell and Senior Channel Management Director with Entrust Datacard. His highly consultative and collaborative approach has helped many organizations achieve business improvement and increased profitability through value-driven solutions and automation. 

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