Environmental, social and ethical performance is a critical factor for the smart business, as more and more organisations are under pressure to improve transparency and sustainability. To mark World Environment Day, Kevin Brzezinski reveals what makes a sustainable supply chain, and what we’re doing to meet expectations with technology and company-wide standards that demonstrate our commitment to the environment.
As businesses become more aware of the impact purchasing and procurement decisions have on the environment, we’re seeing a shift towards sustainability as a competitive advantage. But what makes a supply chain sustainable?
At its core, supply-chain management is about delivering a frictionless, end-to-end customer experience, enhancing the speed and responsiveness of delivery, and managing uncertainty and disruption. But the characteristics of today’s hyper-extended supply chains – global reach, specialised inputs produced in specific locations and minimal inventory from just-in-time production – make them more vulnerable to disruption. COVID-19 exposed these risks, the reliance on human interactions, and the lack of visibility, data and flexibility.
Resilience drives sustainability
The supply chain of tomorrow must therefore become more agile, flexible and adaptable to complex dynamic environments and disruption. Some of this will be done through technology, as advances are driving digitisation, changing how products and services are made and delivered, and enabling the sharing of supply-chain information in new ways. Organisations are digitally transforming the management of their supply chains by applying technologies such as IoT, machine learning, AI, blockchain and robotics to traditional supply-chain activities.
Predictive data and AI enable business leaders to quickly and easily look across their entire portfolio of services and suppliers. In doing so, organisations can spot the earliest possible red flags, in real time and across any geography. With the adoption of early warning systems, IoT, blockchain and RFID, the technology has progressed to the point where it’s now possible to have a single window on the full range of risks facing a supply chain, allowing for mitigation and innovation to respond to the challenges.
Strengthening environmental performance
We operate to several ISO standards, from quality management to information technology, and are bound by European regulations and other legislation. These standards and best practices for sustainable supply chains are very high – which means that processes to safeguard them and anticipate and mitigate risks are essential. Internal auditing and visibility of supplier performance on the ground is essential, but in our digital world are no longer enough.
This is why we have partnered with business sustainability leader, EcoVadis, to collaborate on sustainability with a common platform, universal scorecard, benchmarks and performance-improvement tools. We leverage their KPIs and ratings to drive change, reduce costs and increase efficiencies by putting rigour around our sustainability efforts.
Maximising value, minimising impact
Our end-to-end logistics capabilities help maximise the value of hardware and minimise the impact on the environment. Optimised inventory performance, warehousing and fulfilment all help to drive sustainability through our supply chain and on to customers, and we work closely with vendors to receive product quicker, with less packaging and less human involvement through process automation and robotics.
During the lockdown and resulting shipping crisis, we worked closely with our freight carriers to optimise routes to secure capacity. Going forward, maintaining multiple suppliers, locations, routes and carriers will ensure we continue to keep goods flowing through any future disruption.
Reduce, reuse and recycle
Our reverse logistics expertise and hardware lifecycle management promote the re-use, recycling and refurbishment of end-of-life equipment, and we offer like-new equipment through Cisco Refresh as part of our own Circular Technology Solutions programme. And as we shift from hardware to software and Everything-as-as-Service, effective solutions lifecycle management will become a strategic priority for us, and a key driver of sustainability and success in the IT channel.
We also focus our sustainability efforts on purchasing and procurement to make sure we’re conducting business ethically, for example visibility of our partner supply chains to make sure they’re not using slave or child labour. Our customers demand this visibility and assurance in our RFPs, as they’re often bound by their stakeholders to do business only with certified and regulated partners.
Becoming more ‘climate smart’
Making a supply chain more ‘climate smart’ will involve data and predictive analytics to better understand the full spectrum of risk and disruption: not merely how physical effects can impact the flow of goods and infrastructure, but also the extent to which workers and assets are exposed and how communities experience and adapt to disruption.
AI and advanced analytics can be used to predict disruption and make small incremental changes that can help reduce waste and empty miles. We use API integrations to connect to vendor systems to deliver more intelligence and better forecasting so we can spot and track the earliest signs of systematic concerns. Initiatives such as using recycled materials and smaller packaging help contribute to a reduction in our overall carbon footprint.
The future supply chain is green
The sustainable supply chain requires more than just compliance, following regulations, undertaking audits or increasing transparency. These are all positive and necessary, but organisations must also explore collaborations with suppliers, customers and even competitors across sectors and geographies.
These efforts are a high-payback investment, because greener supply chains deliver benefits for both business and the environment. Critically, they also contribute significantly to the pressing goal of building the resilience necessary for success in a post-COVID landscape. And what businesses often overlook is that building resilience and sustainability simultaneously advances other goals, including respecting human rights, increasing inclusivity, empowering women, improving the health of workers and communities, and optimising supply chains.