Chief Executive, Irish Exporters Association
Consumers are more conscientious about what they buy than ever before. They expect organisations to meet a certain set of ethical standards, and supply chains aren’t exempt from scrutiny.
Our members have fostered a new interest in sustainable business practices. To meet the high expectations of consumers, companies must enact significant changes that ensure environmental stewardship, decreased damage, ethical and sustainable sourcing, manufacturing and product distribution.
As consumer demand increases — generating a greater need for products and services, ingredients and raw materials — global supply chains become more complex.
Supply chains span countries and continents across multiple suppliers, each with its own quality and sustainable standards, leading inevitably to an increased impact on sustainability. In addition to greenhouse gas emissions, they include human rights, water scarcity, issues related to land use, toxic waste, water pollution, deforestation, air quality and energy use.
Advanced analytics can even update routes in real-time to take account of congestion and other issues.
Components of sustainability
The introduction of more ethical and sustainable supply chains is a good practice for any business. It improves regulatory compliance, enhances business branding and reputation, reduces waste and overheads and leads to responsible, ethical and sustainable sourcing.
Supply chains can be improved through major changes, but it’s more common to see results through small, iterative improvements. Good analytics and reporting combine with machine learning to continually improve processes throughout the supply chain.
Every change that reduces waste, speeds up delivery or enhances quality makes an incremental improvement to sustainability.
Misalignment between supply and demand can result in too much or too little production of raw materials, manufacturing of goods and distribution of products. This creates rework and waste. Machine learning and predictive analytics can forecast likely demand and ensure more efficient supply and manufacturing processes.
Impacts of logistics
Until logistics moves to electric and other more sustainable vehicle options, route optimisation is one of the best ways to reduce the environmental impact of transportation and distribution. A.I. can work with GPS devices to optimise international, national and local shipping routes. Advanced analytics can even update routes in real-time to take account of congestion and other issues. Minimising the environmental impact of supply chains will continue to be a focus for companies as consumers become more aware of how goods are sourced, manufactured and distributed. A forward-looking supply chain strategy, combined with the right technological solutions, will help organisations build more sustainable, responsible and ethical supply chains.