How the cloud can make supply chains greener

Green­ing of the cloud is hap­pen­ing at pace, shift­ing com­put­ing en masse to remote dat­a­cen­tres pow­ered by renew­ables. How­ev­er, ener­gy con­sump­tion is just one part of the pic­ture. In the lead up to COP26, the Unit­ed Nations Cli­mate Change Con­fer­ence, lat­er this year in Glas­gow, atten­tion is being direct­ed at the cloud’s abil­i­ty to dri­ve greater sus­tain­abil­i­ty in sup­ply chains.

The focus is on data and lots of it. When it’s organ­ised and analysed on the cloud, via a sin­gle, uni­form plat­form, organ­i­sa­tions can start to recon­fig­ure how they do busi­ness in a more envi­ron­men­tal­ly friend­ly way. This can be achieved by dri­ving effi­cien­cies, fine-tun­ing logis­tics and trans­port routes, as well as by using nat­ur­al resources. 

“Sus­tain­able sup­ply chains aren’t dri­ven by tech­nol­o­gy, they’re enabled by tech­nol­o­gy,” explains Mark Grif­fiths, glob­al head of cli­mate busi­ness at WWF. “Cloud-based tech­nolo­gies enable near real-time vis­i­bil­i­ty, as well as greater account­abil­i­ty.”

The World Wide Fund for Nature isn’t the only organ­i­sa­tion involved. Unilever has teamed up with Google Cloud to fight defor­esta­tion and source sus­tain­able com­modi­ties, par­tic­u­lar­ly palm oil. The idea is to con­nect satel­lite images of forest­ed and defor­est­ed areas with data on sup­pli­ers, to make sure Unilever is buy­ing prod­ucts from rep­utable part­ners. The cloud acts as the ulti­mate ledger for such activ­i­ty.

“Trans­paren­cy, data ana­lyt­ics and bet­ter deci­sion-mak­ing is the cloud’s unique sell­ing point when it comes to sus­tain­abil­i­ty,” says Vishal Patel, vice pres­i­dent at Ival­ua, a pro­cure­ment soft­ware provider. 

“Then there’s the abil­i­ty to mon­i­tor and track sup­pli­ers. Pro­cure­ment can help dri­ve green ini­tia­tives by select­ing and reward­ing com­pa­nies for sus­tain­able prac­tices. This is done by val­i­dat­ing envi­ron­men­tal impact data from sup­pli­ers and track­ing them against sus­tain­abil­i­ty goals. Cloud-based pro­cure­ment tools can cer­tain­ly help iden­ti­fy these oppor­tu­ni­ties.”

Data and supply chain visibility are stumbling blocks

The cloud as a force for green good in the lead up to the biggest cli­mate sum­mit since the Paris Agree­ment sounds remark­able, but there are chal­lenges. Data and vis­i­bil­i­ty along sup­ply chains is noto­ri­ous­ly dif­fi­cult to achieve if they stretch between Glas­gow, Guru­gram and Guangzhou, involv­ing many data silos and tiers of sup­pli­ers, who now have to adopt cloud solu­tions. There’s a lot of iner­tia. 

“Cli­mate change is a big chal­lenge for organ­i­sa­tions, with effects that are far reach­ing, but address­ing these is a long-term and more iter­a­tive process, so invest­ment usu­al­ly takes longer to prove its worth. It can be dif­fi­cult for such invest­ments to gain buy-in,” says David Bas­son, UK man­u­fac­tur­ing lead at Fujit­su. 

Cloud is more like­ly to be deployed as a sup­ply chain solu­tion because it cre­ates effi­cien­cies, reduces lead times and allows com­pa­nies to respond, adapt and act faster, sav­ing them mon­ey and time. Some of these wins could be future sus­tain­abil­i­ty wins too.  

“The cloud helps com­pa­nies build a com­mon infra­struc­ture. Once sup­ply chain part­ners adopt this, it gives them the foun­da­tion to evolve and adapt to any new chal­lenge; this includes cli­mate change,” Dan Mar­tines, man­ag­ing direc­tor at BCG Pla­tin­ion, points out.  

Cloud also pro­vides an agile, just-in-time, elas­tic envi­ron­ment that is easy to con­fig­ure for sup­ply chains. It’s cheap­er to build, with recog­nised stan­dards and off-the-shelf tools as well as data ser­vices. This is like­ly to dri­ve its adop­tion when it comes to sus­tain­abil­i­ty.  

“Arguably you could deliv­er the same sys­tems out of the cloud to trace upstream and down­stream val­ue chains for sus­tain­abil­i­ty. The chal­lenge is the com­plex­i­ty of doing this,” says Grant Caley, chief tech­nol­o­gy offi­cer (CTO) for UK and Ire­land at NetApp.

“For instance, data from oper­a­tional tech­nolo­gies can be com­bined with trans­porta­tion inter­net of things sen­sor infor­ma­tion and then cleaned with data ser­vices in the cloud, before run­ning this against arti­fi­cial intel­li­gence (AI) mod­els. This is then used as the basis to build cloud-based val­ue-chain appli­ca­tions. The cloud makes all this a lot eas­i­er, more cost effec­tive and acces­si­ble.” 

Anoth­er dri­ver will be gov­ern­ment pro­cure­ment, as adop­tion of cloud-based solu­tions that dri­ve sus­tain­abil­i­ty are being cham­pi­oned by the pub­lic sec­tor, which is increas­ing­ly aware of emis­sions and the race to net zero. The cloud offers trans­paren­cy and account­abil­i­ty when it comes to the pub­lic purse.   

“Gov­ern­ment requires sus­tain­abil­i­ty and cor­po­rate social respon­si­bil­i­ty (CSR) issues to be addressed as part of pro­cure­ment. This is hap­pen­ing in local gov­ern­ment where up to 5 per cent of an eval­u­a­tion could be assigned to this. We reg­u­lar­ly see the CSR aspect of bids giv­en equal weight­ing to tech­ni­cal func­tion­al­i­ty. The result is that it has become a core part of any offer,” says Nick Cob­ley, man­ag­ing direc­tor of cloud at Agilisys. 

New cloud-based tools deliver change

The cloud can be lever­aged to gen­er­ate sus­tain­able sup­ply chains in many indus­tries, yet some rep­re­sent more oppor­tu­ni­ties than oth­ers, such as man­u­fac­tur­ing, retail and ener­gy. There are also easy gains with­in sec­tors such as green­er logis­tics. This has come to light dur­ing COVID lock­downs. 

“Retail­ers have been col­lab­o­rat­ing with each oth­er and act­ing more intel­li­gent­ly over the last mile, cut­ting their emis­sions as well as deliv­ery costs and ful­fil­ment process­es. With­out the flex­i­bil­i­ty the cloud offers, they would not be able to re-engi­neer their sup­ply chains quick­ly enough to take advan­tage of this kind of oppor­tu­ni­ty,” says Matt Wald­busser, glob­al field CTO at Blue Yon­der.

AI and machine learn­ing can also assist in gen­er­at­ing more sus­tain­able sup­ply chains, since these tech­nolo­gies can be artic­u­lat­ed on the cloud more eas­i­ly, join­ing the data dots and pro­vid­ing new lev­els of insight, such as reduc­ing over­stock­ing or solv­ing com­plex logis­ti­cal issues.  

“Ama­zon is a good exam­ple. It’s not sur­pris­ing that an organ­i­sa­tion with such strong cloud pedi­gree is con­nect­ing cus­tomers in-store direct­ly into the sup­ply chain through sen­sors, AI and the cloud. In the process they can make the entire sup­ply chain more effi­cient and so more sus­tain­able,” Alex Guillen, tech­nol­o­gy strate­gist at Insight, explains. 

There are also new cloud-based tools that are assist­ing the sus­tain­abil­i­ty dri­ve. Vir­tu­al dig­i­tal twins are becom­ing more com­mon. This allows com­pa­nies to mod­el, sim­u­late and analyse more envi­ron­men­tal­ly friend­ly con­cepts and hypothe­ses in the vir­tu­al world. Then apply them in real life.

“You can use a vir­tu­al twin to cre­ate an entire sup­ply chain. The phar­ma­ceu­ti­cal and ener­gy indus­tries are now deploy­ing this approach to offer more accu­rate data across their sup­ply chains and reduce their car­bon emis­sions and waste,” says John Kitch­ing­man, man­ag­ing direc­tor, EuroNorth, at Das­sault Sys­tèmes.

So what of the future? More cloud-based data will enable sup­ply chains to be recon­fig­ured. The hope is we will tran­si­tion to a cir­cu­lar econ­o­my, mov­ing away from a take, make, dis­pose lin­ear mod­el. That involves an ecosys­tem of part­ners, recal­i­brat­ing how they inter­act, which is eas­i­er on the cloud. 

“This will be a des­ti­na­tion for sus­tain­able sup­ply chains, where no net waste occurs in the pro­duce and con­sume cycle. At the moment it’s being pushed in Europe and Japan, but its prin­ci­ples will soon be intro­duced in the Unit­ed States,” says Dr Raj Agni­hotri at IBM’s Glob­al Sup­ply Chain Cen­ter of Com­pe­tence.

Cer­tain­ly, the cloud now offers a win­dow onto the art of the pos­si­ble. “We are only lim­it­ed by our imag­i­na­tion, pri­ori­ti­sa­tion and dri­ve to lever­age the cloud in mean­ing­ful ways to help address our cli­mate cri­sis,” Aaron Oser, leader of glob­al sourc­ing at Pills­bury Law, sums up.