Global supply chains have faced something of a baptism of fire since the Covid pandemic first started exposing various flaws and efficiency gaps in 2020. When economies were unleashed after lockdown, parts of the economy struggled to keep pace with demand. Subsequent supply shortages have contributed to rising inflation, which has triggered a stinging cost-of-living crisis.
The events of the past two years have illustrated the far-reaching ramifications of inefficient supply chains, hitting the pockets of retailers, brands and consumers and causing havoc across the economy. And yet there is another hugely significant consequence of unreliable supply chains which is still often overlooked – the damaging impact on environmental sustainability.
Research by KPMG found that 96% of the world’s largest 250 companies and 80% of large firms worldwide reported on their sustainability performance in 2020. More than a third of the world’s largest publicly traded companies have gone so far as publicly setting net zero targets, according to Net Zero Tracker. Yet reducing their environmental impact to the satisfaction of customers, staff and investors will require more than making their own practices sustainable.
“Supply chains are probably responsible for 25% of the carbon emissions on the planet, so reducing the environmental impact of all of the processes adopted in your partner, distribution and transportation network is just as important to achieving your sustainability objectives,” says Henri Seroux, senior vice-president for EMEA at Manhattan Associates, whose solutions solve the most complex business problems in supply chain, inventory, ecommerce and omnichannel.
True sustainability relies not just on efficient processes within a supply chain, but consumer behaviour too
“Often when people think of supply chains, they think of manufacturing and sourcing – where a product is made, what it’s made of and how it gets to you. But a supply chain is more than just the linear journey from production to your home. It’s a complex web of components involved in making a single product and the various partners involved in its movement and lifecycle. For instance, are products transported on a half-empty plane or a more reasonable means of transportation like train or ship? And do your partners understand their impact on the planet?”
A reliable supply chain is a more sustainable one, and thankfully the widespread disruptions in recent years have been a catalyst for heavier investment in more robust, efficient processes. Small efficiencies across lots of different areas drive marginal gains which ultimately add up to huge improvements in customer satisfaction, business bottom lines and environmental impact.
However, true sustainability relies not just on efficient processes within a supply chain, but consumer behaviour too. All retailers have seen a growing mentality among consumers of wanting to be more responsible in their choices. Yet that mentality isn’t quite enough when consumers also face headwinds that threaten to sway their conscience in the other direction.
The cost-of-living pressures which have been partly caused by supply chain disruption are also causing many consumers to prioritise cost over sustainability. Sales of organic food rose by less than 2% in 2021, the slowest growth rate in more than a decade, according to the Organic Trade Association. In tough times, financial survival instincts can hit sustainable consumption.
“Impatience is another barrier,” says Seroux. “When you are offered to have almost anything delivered quickly, often even in a matter of hours and for free, you can sometimes forget to ask yourself whether that is really the right thing to do. Is that really sustainable? With digital consumption rising to new levels of popularity with Gen Z, we need to find ways to empower consumers to make greener decisions even if it means a product takes longer to reach them.
“We’ve all experienced those moments when you order several products from the same retailer or brand and yet they are all delivered separately at different times. That’s because traditional ecommerce systems are set up to ship a product to you as quickly as possible, which mostly means pushing them through fulfilment individually. If you just added a couple of days to see if the consumer orders more products, as well as other people in a similar location, those items could all be grouped and transported together. The environmental impact is drastically reduced.”
Manhattan Associates has developed intelligent technology solutions which make supply chains more efficient and empower consumers to make more sustainable choices. Its innovative, cloud-native systems give retailers and brands real-time visibility of their inventory and orders, as well as the ability to link the insights to more efficient, greener supply chain execution.
The company works closely with retailers, wholesalers and manufacturers and gives them the opportunity to decide on the choices they want to give to their customers. Manhattan Associates also benefits from working with environmentally aware partners such as Google Cloud – a crucial piece of the puzzle when considering how to make any supply chain more sustainable.
“We give companies and logisticians a system in which they stream the orders instead of working in batches, and through real-time assessments, release orders in a more intelligent way,” Seroux adds. “It’s a mix of evaluating in real-time the whole demand in a region and then reorganising fulfilment and transportation to be far more efficient and sustainable. We remove trucks from the road, planes form the air, and air from the boxes, by being smarter about distribution networks and transportation systems.
“There is undoubtedly increasing complexity in supply chains which, along with the need for speed and reliability in the ecommerce ecosystem, will put them under quite some level of stress. Our solutions are built by a 1,000-strong engineering team, with the input of over 1,000 customers, and we are actively investing to ensure we can advise our customers on how to use our solutions to maximise supply chain efficiencies and empower consumers to make more sustainable decisions.”
For more information, visit manh.com
Promoted by Manhattan Associates
