‘Most Complex Operating Environment in Modern Enterprises’: Survey Shows Companies Are Stepping Up Green Supply Chain Efforts – Advice Eating

Companies are increasingly looking for ways to modernize their value chains in response to the pandemic, inflation and supply challenges by integrating deeper monitoring processes and technologies and prioritizing environmental sustainability, a major survey of supply chain leaders shows.

Survey results released yesterday show that Chief Supply Chain Officers (CSCOs) of major US companies face significant challenges in the wake of the Covid-19 crisis, on top of global economic headwinds from rising energy costs, supply shortages and geopolitical volatility.

But the survey also shows that as a result, many supply chain leaders are planning to further monitor their value chains and processes, in addition to implementing energy efficiency, renewable energy and circular economy measures to reduce costs and emissions.

The survey was conducted by tech giant IBM along with data processing company Celonis and analytics firm Oxford Economics. The results are based on responses from 500 CSCOs across 10 industries worldwide: banking, consumer goods, manufacturing, telecom, insurance, life sciences, healthcare, electronics, industrial products and automotive.

Jonathan Wright, Managing Partner for Finance and Supply Chain Transformation at IBM Consulting, said the convergence of post-Covid-19 challenges, inflation and supply issues, security and sustainability “has resulted in the most complex operating environment in the modern economy.”

“This has forced companies to rethink and rebuild their supply chains to be more agile, efficient and sustainable,” he said, arguing that technology and data are “key to not only assessing current workflows and inefficiencies, but also to identify new opportunities Good”.

Of the 500 CSCOs polled for the survey, 80 percent said demand volatility was a top challenge, while 77 percent cited rising transportation and logistics costs, which they believe are leading to missed opportunities and rising costs for businesses.

However, exactly two-thirds said environmental sustainability remains a core element of their overall business value, and more than half – 51 percent – said they would be willing to sacrifice short-term gains to improve the sustainability of their supply chain and business .

On average, these respondents said they would be willing to sacrifice about 5 percent of their company’s profits, which IBM says would equate to about $22 billion in a year for US Fortune 500 companies.

Many appear to believe investing in sustainability initiatives in supply chains can yield significant environmental and business benefits, the survey results suggest. The top three expected benefits to come from supply chain sustainability initiatives were identified as complying with environmental regulations, reducing reputational risk and fostering new innovation.

As a result, 47 percent plan to initiate full lifecycle design of their materials and products to expand material reuse and reduce waste, and 44 percent said they plan to improve the energy efficiency of their products and services, according to the survey.

Additionally, 35 percent said they aim to develop new products and services based on renewable energy components and 30 percent expect to develop new zero-waste products and services.

Many CSCOs surveyed believe better real-time monitoring and reporting of environmental and social sustainability performance in their supply chains is required to realize these benefits, with 55 percent of respondents saying they expect to implement such processes within the next three years.

Technology is expected to play a key role in this regard. 72 percent said they expect their processes and workflows to become automated in the next three to five years, while 27 percent expect their workflows to become AI-enabled in the same timeframe. increase to 33 percent by 2030.

By 2025, 83 percent said they plan to adopt AI-powered real-time inventory management, while 81 percent are already looking at AI-powered processes for real-time needs assessments, and 74 percent believe hybrid cloud technologies will be critical to digitizing their inventory supply chains.

Janina Nakladal, Global Director of Sustainability at Celonis, said that eliminating inefficiencies from core supply chain processes “represents a tremendous opportunity to reduce carbon emissions at scale,” arguing that digital technologies would play a major role in this .

“Chief supply chain officers know they need to adapt, and in many cases they are, but they often don’t have the insight they need to really understand where changes need to be made – and they lack the toolset to drive the changes forward,” she said. “Our research shows that the technology currently available – process mining and hybrid clouds – can give CSCOs this insight to completely transform their supply chains.”

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