Reimagining supply chains to power sustainable commerce

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.

“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