This October, I was invited to take part in a discussion panel, Leading a Sustainable Supply Chain Transformation at Speed at the Industry IoT SCM Leaders Forum in Germany.
This event took place at the Siemens Impulse in Amberg. The focus was on the twin aims of supply chain digital transformation and sustainability.
Strategies for Supply Chain Digital Transformation and Sustainability Integration
In 2023, the pursuit of sustainability has become an imperative for businesses. However, achieving sustainability goals within a complex supply chain landscape is a challenge for many organizations. Despite growing awareness of Environmental, Social, and Governance (ESG) strategies, the alignment of these strategies with local and functional objectives remains a rare feat.
Start with Local and Actionable Objectives
If your sustainability agenda doesn’t translate into local objectives, it will be difficult to deliver sustainable transformation. Functions are often targeted against commercial objectives that don’t compliment corporate strategy. Functions will, understandably, focus upon the OKRs they’re measured against in order to achieve their own targets.
As a result, many companies have a disjointed approach to ESG goals. This creates a breeding ground for conflict among various functions, resulting in corporate-level friction and inefficiency. If companies fail to align their commercial objectives with sustainability goals, they are likely to fall short on both counts.
A company can have lofty ESG objectives, but a top-down approach without actionable objectives rarely works. Companies need to give different functions the incentives — and the tools — to achieve them.
Scope 3 Emissions: The Unseen Challenge in Supply Chain Sustainability
Furthermore, some businesses focus extensively on reducing their Scope 1 and 2 emissions. While this is important, that is the easy part. However, that means these companies are ignoring the larger elephant in the room—Scope 3 emissions. Scope 3 emissions are the most difficult to track, but they constitute a whopping 90% of a company’s emissions.
At the event, many supply chain leaders were frustrated by their inability to make great commercial decisions through one industrial transformation platform.
Align Your People, Processes and Systems
People, Processes and Systems aren’t aligned in well over 90% of organizations. There are multiple point solutions at play across multiple geographies. However, these solutions do not often talk to each other. If data is tracked across siloed systems, leaders have no way of making data-driven decisions. As a result, it’s costing businesses financially whilst maintaining suboptimal ESG performance.
Unveiling the Power of QAD Solutions in Supply Chain Carbon Reduction
On Day 2 of the event, my colleague Mark McMonagle gave the keynote address. He discussed how QAD’s supply chain solutions have had real-world results in helping companies drive down carbon emissions whilst delivering commercial objectives.
This address stimulated plenty of insightful discussions amongst the attendees. More importantly, it drove follow-up actions. Because of the depth and breadth of the QAD supply chain portfolio, we discussed concrete steps businesses can take to both digitize their supply chain and reduce their carbon emissions. This includes everything from sustainable sourcing and accurate forecasting to final mile delivery.
One encouraging trend across Europe is that organizations are now establishing central ESG budgets. This empowers supply chain transformation leaders to revolutionize their supply chains. QAD is talking to many of those businesses today and many of them are already customers.
Digitize Your Supply Chain for Sustainable Transformation Success
Supply chain sustainability goals cannot be realized without digital transformation. The digitization of the supply chain allows companies to achieve the seemingly contradictory aims of both commercial objectives and sustainability initiatives. But wherever a company is on their transformation journey, we have a roadmap of where to go next.
