Dassault Systèmes takes a look at how businesses can combine profitability and sustainable supply chains
Sustainability is often seen as a cost by businesses. Many leaders believe that you must sacrifice profitability to achieve a sustainable value network, but this is not the case. On the contrary, improved efficiencies across the value network lead to goods that are delivered faster and at a fraction of traditional emission levels, which in turn, means less waste and better resource management.
A greener supply chain is one that delivers greater environmental credentials while fulfilling ever-increasing consumer expectations of quality and value. This is only able to happen when visibility and efficiency is improved throughout the entire supply chain. This oversight improves collaboration between stakeholders, from manufacturing all the way to retail. It also means, logistically, that you are being as efficient and ‘carbon-friendly’ as possible.
Technological developments mean that every step of the supply chain can be created and optimised virtually, as each party involved can be monitored and all operations can be assessed in the virtual world. This reduces a company’s reliance on road testing its new processes and it also helps them to better predict and manage efficiencies.
Solving the overstock problem
One big cause of supply chain emissions is overstocking, which takes up valuable space in warehouses and leads to increased waste. Retailers can minimise this problem by improving forecasting capabilities using virtual project management solutions. This enables retailers to anticipate demand for seasonal goods and optimise inventory levels to avoid overstock.
This advanced warehousing planning also provides energy-saving capabilities such as task prioritisation, self-replenishing and travel sequencing. All of this helps retailers to optimise operations and react quickly and efficiently to real-time trends and returns, which again reduces overstock. Integrating data with logistics and warehouse management processes can also improve the transport and warehouse networks. Once again, this can be assessed and optimised virtually to evaluate different scenarios and define the best options.
Using data to increase efficiency
It is also possible to utilise data analytics to increase fuel efficiency by determining the best ways to assign truck delivery routes. Data can be used to create a profile of each vehicle’s delivery route, including the number of stores and trips, route density, traffic congestion and topography. Businesses can use this profile to identify the best route for the vehicle to take to save as much time and energy as possible. Fuel is usually the biggest transport cost, so managers need to start with reducing the number of trips. End-to-end supply chain transparency and optimised planning allows the combination of different goods headed for the same places in a single trailer.
These initiatives need to be backed with the right technological tools – data analytics, traceability of suppliers and travel routes, and digital systems giving an overview of the supply chain are all essential. They are already becoming commonplace for retailers and making their way into more industries by the day to help solve the carbon emission challenges of the industry, but also to optimise processes and increase transparency of all operations across the value network.
Creating a circular supply chain
The traditional linear supply chain model has three easy to define stages: make, use, and dispose. This is simply unsustainable as it leads to lots of waste and, as we know, the world’s resources are finite. As a result of this, modern supply chains need to transition to a circular supply chain model. This model focuses on keeping resources in use as long as possible, extracting the maximum value from them whilst in use, then recovering and regenerating products and materials at the end of each service life.
Adoption of the circular supply chain is being driven by technologies such as IoT, advanced data analytics and real-time data capture, which break down organisational silos and increase collaboration and communication.
Technology’s role in a more sustainable future
New technologies are making a sustainable supply chain far more attainable for businesses. By utilising these technologies, it will be possible for businesses to reduce pollution and their carbon footprint, creating a much more sustainable supply chain and enabling them to make a positive impact on many of the world’s pressing environmental issues. Employing the advice and expertise of trusted technology partners here will help promote these efforts and spell a promising future for sustainability in the corporate world.
The impact of technology on the supply chain isn’t just good for the planet, but good for business as well. Modern consumers are far more conscious about the sustainability of the businesses they deal with and are far more likely to spend money with a company leading the way, while increased efficiency, transparency and speed are always welcomed by the consumer.
Read the latest edition of Energy Digital here.
Follow us on LinkedIn.