Approaches to Technology and Supply Chain Sustainability

By Triskele Logistics

Approaches to Technology and Supply Chain Sustainability

Sustainability is the ability of an organization to ‘optimally continue operations infinitely.’ Sustainability needs to be reviewed on a regular basis to determine and update appropriate actions. Focusing on continuous improvement, while still maintaining long-term goals, will better align an organization for success.

How to Define Sustainability

There is more than one definition for sustainability in business. Most definitions of sustainability are associated with the idea of managing the triple bottom line: people, planet, and profit. Each of those terms involves many elements, and as for managing them, complexities add up very quickly making it a large task to maintain. A more direct definition of sustainable development from the Bruntland Report for the World Commission on Environment and Development(1992) is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

So, what really is sustainability, and how should we think about it? Realistically the answer is it depends because industries and business are all unique and have their own considerations. A business must take a case by case scenario to create an appropriate definition for the organization. The key is to focus on the critical business functions and compare them to the impacts the business has or may have on people, planet, and profit. Each of those should be analyzed when the organization is looking to define sustainability.

Sustainability in Supply Chains

Examining sustainability in supply chains is difficult and very important as supply chains are complex and involve a wide collection of players across a global setting. Having such a large system for movement creates opportunity for sustainability initiatives. Key supply chain considerations are:

  • Profit is vital to continue operating. As the world changes, it is important to determine how to sustain continued fiscal growth beyond the short-term horizon. A supply chain organization needs to review the continuously changing needs of consumers and businesses and how to best meet those needs.
  • People are the driver inside of an organization. Planning on how to attract, maintain, and cultivate employees should be seen as a must for a company to sustain. People can be an organization’s greatest asset, and incorporating labour force strategies that include inclusion, diversity, and empowerment can bring further value from employees.
  • Often less considered is planet (or environment) and the benefits it can bring to an organization. Reducing a businesses environmental footprint is a critical factor in sustainability. Focusing on the environment will help reduce harmful outputs. However, this part is only one of many that need to be considered. Driving waste reduction and facility efficiency can bring cost savings and better company perception. Efficiency also drives and increases sales and unites employees through a common purpose, all while reducing the organization’s impact on the environment.

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Technology as a Sustainability Tool

Especially with a long-term focus, effective use of technology can be a powerful tool in optimizing organizations. With an idea of what sustainability is and how it applies to supply chain, lets look closer at the role technology plays.

Technology is a tool that when approached right can effectively be used to amplify an organization’s sustainability. Technology is a vital part of all facets of business and society with supply chain being no exception. However, a lot of technology was not developed enough to be able to adapt to the dynamic needs of the supply chain industry, and this traditionally has left the industry quite labour intensive. Following the recent wave of technology advances, many developments are allowing technology to be more dynamic in its use, and a lot of new technologies are proliferating into supply chain. With the potential benefits of increasing technology adaptation, it is not a question of whether or not adaptation will occur, but when.

Below are 12 technologies that have seen significant research and development in the last few years. While this list isn’t exhaustive and each brings different levels of opportunity forward, all of these technologies will help to reshape business, society, and supply chain:

·         Autonomous Vehicles

·         Additive Manufacturing

·         Robotics

·         Augmented Reality

·         Advanced Materials

·         Big Data Analytics

·         Drones

·         Mobility Internet

·         Blockchain

·         Alternative Computing

·         Renewable Energy

·         Artificial Intelligence

While it’s easy to boast about the benefits of disruptive technology, what are the negative implications that need to be considered? Three issues that often come up are increases in technical complexity, decrease of labour requirements, and inadequate policy/regulations.

Increases in Technical Complexity

As technology use and complexity continues to increase in supply chain, employee’s technical abilities will need to adapt, creating a specialized workforce. These specialized skills will create difficulties in attracting, maintaining, and cultivating employees as the requirements of the workforce will be drastically increased, also incurring additional associated costs. The aim would be that the value add of technology adaptation would far out-weigh the negatives of increased complexity/associated costs. 

Decrease of Labour Requirements

While this will seem like a benefit to many organizations, as decreases in labour will decrease labour costs and overhead, a significant population is reliant and impacted by supply chain jobs. As it likely that jobs will be displaced by technology, consideration of these people’s well-being and livelihood is important for the adaptation of disruptive technology to ensure equitable benefits are created.  

Inadequate Policy and Regulations

Inadequate policy and regulation in industry creates two problems: uncertainty in the industry and exploitable gaps. Uncertainty limits the potential of technological growth inhibiting the positive benefits that technology presents. Companies are more reluctant to invest in something when it is uncertain how the government will approach the technology in the future. Additionally, inadequate policy and regulations leave gaps in understanding that can be exploited for unfair/unethical/dishonest uses. All of this can easily be mitigated with organizations and companies pursuing continued research and development alongside and supported by the government, albeit not always simple to coordinate.   

Advantages of Technology Adaptation into Supply Chain

Put into perspective, these technologies will have beneficial implications on sustainability. Profit implications are significant with a large potential for cost reduction and optimization of movement through a supply chain. Implications on people are less apparent, but relate to the changing technical requirements of employees and the ability to enable creative solutions from technology adaptation. Planet benefits are also considerable with the ability to operate at significantly less waste and emissions, in conjunction with technology driving efficiencies. 

Sustainability is vital for an organization to consider, and looking beyond its use as a buzzword, long-term sustainability planning can bring benefits and opportunities to an organization. With technology’s importance growing in supply chain, understanding how to utilize technology as a tool can help business sustainability and continue to be competitive in business for years to come. While this sets the stage for understanding these concepts, the following Triskele blog series will look at technologies more in-depth and how they can maximize organizational sustainability and bring benefits, while minimizing challenges.

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Topics: Supply Chain Sustainability

Technology is changing the way businesses buy and sell. 

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