Here is a bit of earth-shattering news for all of you. Now, you better have a seat, because it is shocking. Ready? The world is changing. Has anyone fallen out of their seats with that announcement? Hopefully yet probably not. Your response is probably along the lines of “thank you for telling me something I already know.” But all kidding aside, the world is changing on both a global and societal level. When I say societal, I mean most aspects of the behavior of humans have and are changing. It has been happening for a while and there are several reasons for this change.
Now, initially people will think all this change has to do with the pandemic. And yes, Covid-19 has played and continues to play a role in the change of society. But, it was happening prior to the pandemic, too. The catalyst: Technology. The last 25 years has probably brought us greater innovation than we have seen in quite some time. And while yes, machines and mechanical inventions have been steady and life-changing, one of the greatest impacts that technology has had is on how we analyze, process and use information. This new ability is changing how we live and in doing so most aspects of our lives. It has most definitely impacted how people buy products of all types and in all industries. For example, manufacturers have had to alter business models to be able to accommodate the change in consumer behavior. However, at the same time, the technology of better data management is most definitely helping manufacturers as well.
Consumer Behavior is Changing on Multiple Fronts
One area that better data and information has helped to really expose and red flag is that of the mismanagement of our natural resources and environment. For life, the planet and humanity to continue for an indefinite amount of time, changes have to be made. Thus, the rise of the concept of sustainability to a level of importance we have never seen before. With this drive of preservation and sustainability and with the innovation of being able to use data like never before, we have seen innovations that are the foundation of this movement. The electric vehicle, plant-based protein products and vertical farming are just a few innovations stemming from being able to use data better that are transforming industry.
Consumer behavior is changing as well on multiple fronts. First and foremost, consumers are performing their own research and influencing the ways in which companies change their products to attract new customers. This is forcing regulators to institute changes in regulations on manufacturers. Consumers helped push the added sugar label creation several years ago as well as the push for the QR and barcodes that can instantly give a consumer information about the products they buy. They now have easy access to critical information about product origin, ingredient tracing and information about the manufacturers themselves. We joke and say that consumers today do not just want to know the state that their potatoes used for their chips were grown in but the name of the actual farmer who grew them so they can connect with them on social media and learn about their farming habits.
Capterra did a study this year that provides some really interesting data. 84% of consumers have purchased a sustainable product in the past six months, which is up from 67% in 2021. 95% of surveyed consumers consider the sustainability of a product to be important. And more consumers are putting their money where their mouth is saying they are more likely to pay more for a product that is sustainably made. Consumers of today are getting to the point where they will not purchase a product produced by a company that does not have a formal and demonstrable sustainability footprint. And this behavior does not just stop with the manufacturer or the product sourcing. Sustainability practices throughout the entire supply chain are being monitored by consumers.
Consumers want traceable and ethically sourced ingredients. They want manufactured products from processes and facilities that demonstrate sustainability such as plants that are solar-powered, processes that use less water and facilities that can use reclaimed water. Once the products are ready to go to the places of purchase, they want limited handling, and transportation in clean, sanitized electric vehicles. Consumers are also influencing the practices of the retailers who provide their products in terms of the sustainability enhancements of their facilities and even the methods of their hiring practices. The world is changing and it started with the information revolution.
Businesses are Changing their Approach to Achieve Sustainability Goals
While the growing consensus is that the push for sustainably sourced, produced, packaged, and transported goods is a positive trend, the execution presents cost-incurring challenges. Following the earlier joke: we know how to physically take the potato out of the ground and transform it into a chip that will be enjoyed at a World Cup party. But is it possible to digitally communicate that journey to a consumer and prove its sustainability in a cost-effective way?
The short answer: yes! Our method is related to the root cause of consumers having instant access to unmeasurable amounts of information: technology. However, the devil is always in the details.
Key Enterprise Technology Characteristics
To address the journey, communication, sustainability and cost-effectiveness all at once, there are must-have characteristics to the technology. Your enterprise technology must be:
Scalable and Adaptable
Enterprises need to be able to roll out technology quickly and dependably. Consider the number of suppliers, transporters and internal processes that are sources of data. Then add all the customers and various channels through which they will request information. And wouldn’t it be great if tomorrow we could grow the customer base, take on new products, and make our supply chains more resilient with diversification? Systems that were designed and implemented in previous decades are not suited for this volume of change, even if they worked well prior to today’s disruptions.
Integrated
Since much of this data may be new, there will be a temptation to expand just enough to capture sustainability and traceability. Somebody will bring up what seems to be a fair argument: there’s enough change involved in embracing sustainability, why disturb systems that are already running? The answer is that consumers don’t just want to know what you planned to do right, they expect assurance that you can prevent something from going wrong. We can all think of recalls that had national consequences within the last year – data that lives in adjacent silos will not prevent incidents, and might not even allow you to explain incidents after they occur.
ROI-driven
Here is a claim that is potentially obvious and definitely controversial: Microsoft Excel (or Access, if you have a resident nerd) could do a lot of what was just described. And conventional wisdom would say that capturing data into Excel/Access and communicating through a webpage fed by an RPA bot is as cost-effective as hiring a summer intern. But there’s a difference between low cost and high ROI. The low-cost spreadsheet is good for one thing: a snapshot of data that is accurate for about 5 minutes after it’s been updated. It doesn’t automate data acquisition, accelerate business processes, or actively alert you when something is wrong, past due or requires special attention. Treating sustainability and traceability as necessary evils to be compartmentalized and shielded from normal operations will only add costs. Instead, an ROI-driven mindset seeks ways to leverage the new data requirements to reveal and eliminate waste (which also improves sustainability). ROI doesn’t look at cost as the singular factor, it considers how quickly the business can transform by leveraging the change that comes along with sustainability.
How Can You Address All of This at Once?
QAD Adaptive Applications have a proven track record of addressing scalability, adaptability, integration, ROI and more. The September 2022 release is fresh out of the oven and includes capabilities that address sustainability while driving business optimization:
- Digital Commerce – communicate your sustainability with B2B and B2C online sales
- EQMS – capture integrated quality information for assurance of sustainability standards, reduce waste and manage risks
- ERP – capture any type of sustainability and traceability information with flexible and dynamic attributes and serialization; communicate with confidence via certificate of analysis reports
- SRM – capture supplier sustainability information, including third-party risk ratings for additional assurance
Deployed in the Cloud, the use of these solutions also improves sustainability by moving toward renewable energy and net-zero carbon ahead of global targets.
We cannot change the changing landscape of technological advances and consumer preferences that are pushing sustainability to the fore. The good news is that this presents enterprises with an opportunity (and, let’s be honest, a mandate) to grow. Technology is creating new winners and losers, it’s up to us to leverage it and come out on top.
This article was co-written by Stephen Dombroski, director for the consumer products and food and beverage vertical markets at QAD.
