The supply chain sustainability trend – Austin Business Journal – Austin Business Journal

While pandemic-related supply chain challenges can be traced to 2019, the lasting impact of the health crisis is affecting supply chain sustainability across the globe to this day. For example, a scarcity of truck drivers in the U.S. and beyond has intensified as a result of the pandemic, even in the face of ongoing high demand for deliveries. Fewer trucks and drivers available to pick up cargo is exacerbating backlogs at ports around the world, raising concerns among retailers for the upcoming holiday shopping season.
Heightened supply chain disruption is prompting businesses to ensure the way they source goods and materials is resilient enough to weather the next crisis. Many organizations are finding that through technology, they can achieve supply chain sustainability — which has become an expectation at the board level and among investors.
According to global business software giant SAP, every company will need to evaluate their supply chain to improve resilience and find ways to reduce their impact on society for a more sustainable future. But no one company can solve the climate crisis on its own. Companies must partner to find the right solutions for supply chain supply chain sustainability — for the success of their businesses and the world.
How digitization makes the supply chain more sustainable
As companies and governments move forward with their supply chain sustainability goals, they’ll be achieved with technology and end-to-end digitalization, SAP CEO Christian Klein recently wrote on LinkedIn.
“The role of technology has long since moved on from simply managing productivity or operating results,” he wrote. “Technology can make protecting the climate measurable, diversity and inclusion visible, and ethical responsibility transparent — not just within the four walls of a company, but across its entire value chain.”
To recognize the widening number of options available to organizations today, Archlet is making it easier to analyze supplier and sourcing information. Together with SAP, Archlet empowers sourcing managers with advanced analytics and optimization capabilities to make better sourcing decisions faster. Archlet allows companies to easily view supplier data on performance, risk, diversity, enabling them to make the most environmentally and socially responsible decisions, all while creating greater supply chain sustainability.
A recent SAP Insights global survey of business professionals who are knowledgeable about their organizations’ sustainability goals, actions and reporting methods found most companies are taking at least some steps toward greater environmental sustainability — and that the more effort companies put toward that goal, the more successful they expect their performance to be. Leaders who think environmental sustainability is already financially material to their businesses are transforming their companies and achieving better business results than their peers who still have blinders on.
To remain resilient in the face of supply chain challenges — and to meet today’s societal and investor expectations — organizations are advancing supply chain sustainability through ethical sourcing of materials, optimizing routes to decrease fossil fuel consumption and minimizing overproduction. As they do this, they are working with technology partners to support the changing supply chain paradigms, while also seizing an opportunity to reduce their environmental impact.
For example, software developer FarEye has integrated its platform with SAP Logistics Business Network to enable businesses to transform their last-mile logistics and make it more climate-conscious. The need to embrace last-mile delivery software is driven by the need to boost customer loyalty, optimize operational costs and curb manual dependencies. An enterprise-grade, last-mile platform helps businesses address operational challenges such as unnecessary fuel consumption and inefficient route planning by leveraging automation, machine learning, the Internet of Things, predictive intelligence and analytics.
While Covid-19 has resulted in unprecedented challenges for businesses of all sizes, it also has accelerated progress in some areas. “Covid-19 may well prove to be a major turning point for ESG investing as the pandemic alters society’s values,” CNBC reports. “This investing approach, which evaluates a company’s environmental, social and governance ratings alongside traditional financial metrics, was already coming off a banner year, and its reach continues to expand.” This summer, in fact, U.S.-listed sustainable funds were seeing record inflows, despite the market turmoil.
According to SAP, as businesses re-evaluate their business models to incorporate sustainability initiatives, there will be a continued focus on building supply chain resilience through digital transformation, including shifts to cloud-based versions of applications.
Verusen Materials Management is building an intelligent, connected supply chain through its always-on, always-learning platform. It centralizes siloed materials data and uses artificial intelligence and machine learning to provide actionable data deduplication and inventory stocking recommendations to help companies achieve maximized inventory performance, better production reliability and sustainable results.
Supply chain sustainability drives better business results
The world is changing. For any company that sells goods or services, their customers and investors are rewarding businesses that make significant effort to drive social, economic and environmental sustainability, said Claus Gruenewald, head of intelligent spend and business network partner ecosystem with SAP Ariba.
“For instance, 80% of consumers in emerging markets will pay a premium for goods from companies who actively work to reduce their environmental footprints” Gruenewald said. “As a result, procurement’s mandates are evolving – they’re not only managing efficiency and cost but also supporting diversity and corporate responsibility priorities, proactively identifying delivery and performance disruptions and protecting corporate brand and reputation from unethical supplier behavior. Technological innovations in sustainability and impact sourcing is a crucial piece in this puzzle, enabling companies to drive both business and social outcomes to make this world a better place.”
SAP, which reports on its environmental performance annually, aims to be carbon neutral in its operations by 2023, two years earlier than previously planned. The company also is contributing to the 17 United Nations Sustainable Development Goals to fulfill its purpose: to “help the world run better and improve people’s lives.” SAP also aims to plant 5 million trees by 2025 through its “Plant a Tree with SAP in Honor of Earth Day” initiative.
To learn more about how SAP is helping businesses achieve supply chain sustainability and resilience, visit
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