With pressure growing on businesses to ramp up their climate change commitments and streamline their supply chain to lower emissions, having the right infrastructure and partnerships in place has never been more important.
However, a combination of labour shortages, international trade barriers, such as Brexit and increased US and China tariffs, and global sourcing problems means achieving these climate goals has become ever more challenging. The effect is contraction of supply impacting sectors showing increased demand. Take EV in the automotive sector as an example – new products take time to be built, but the demand is here right now. In light of such issues, therefore, modern technology will prove essential in ensuring businesses make progress toward a sustainable supply chain.
Complex and varied
Widespread disruption to supply chains has been making headlines since the summer of 2021. In October 2021, for example, 17 percent of adults in the UK experienced shortages of essential food items while, during the peak of the fuel crisis in the same month, 37 percent of motorists struggled to fill their vehicles.
This supply chain disruption is global and continues impact businesses today. Only last week Tesla announced record profits amid overwhelming demand for its electric cars, the company also said its sales would be hurt by difficulties in the supply chain — not least due to continued shortages of computer chips.
The chip shortage has limited the production of cars worldwide, while stymying makers of medical devices and a vast range of electronic gadgets.
The causes of this disruption have been complex and varied. Factors such as COVID-19 and post-Brexit changes to immigration rules have led to labour shortages, particularly in the UK, while the ongoing war in Ukraine has affected global access to supplies and trade routes, as well as pushing the price of fuel to increasingly new highs.
Together, these factors have made it difficult for businesses to maintain an efficient supply chain – much less one that can help them meet their climate goals.
Partnerships pay off
Although it might be hard to accomplish in the current geopolitical climate, efficiency is key. An efficient supply chain – optimising transport logistics to minimise “empty kilometres” and thereby reduce carbon emissions, for instance – is a more sustainable supply chain.
This can be difficult for many businesses to achieve on their own, of course. But collaborating with best in breed suppliers, experts in their area and other companies within the supply chain can pay dividends. Allowing sympathetic businesses to pool their resources and increase their capabilities, partnerships are an ideal means of streamlining the supply chain – especially in times of such economic uncertainty.
Meaningful and measurable
Only with the right technology in place will businesses be able to demonstrate their progress in sustainability as required. Indeed, streamlining the supply chain depends on capturing valuable data to gain valuable insights into the supply chain by using the right technology and tools. This will unlock new insights and potential efficiencies that are hidden within complex supply chains leading to a more economically and environmentally efficient operation. By using those tools to identify inefficiencies in its supply chain, for example, a business can then work with its partners to address them – leading to a more economically and environmentally efficient supply chain.
Supply chains have become increasingly complex over the past few years. Climate targets may have become secondary considerations for many businesses, but the solutions exist to optimise a company’s supply chain. And with 40% of supply chain costs happening in the final mile, there’s a huge opportunity to partner with others to gain better visibility and control of operations – for increased efficiencies and more meaningful and measurable sustainability efforts.