Sustainable Supply Chain Trends That Will Dominate in 2021 and Beyond

It’s critical to gain full visibility over the sourcing, use and movement of materials across entire supply chains.

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Manufacturing companies are prioritizing the reduction of their carbon footprints as part of their environmental social and governance (ESG) programs. Because research reveals the world’s supply chains produce 80% of greenhouse gas emissions (GHG), supply chain, logistics and procurement professionals are among those leading their companies’ efforts to reduce emissions and halt climate change.

That’s why the momentum behind companies of all sizes implementing Big Data collection and analysis solutions to collect and measure all Scope 1 and Scope 2 emissions under their direct control, as well as Scope 3 emissions from assets such as upstream suppliers will continue building in 2021. It’s a critical step to gaining full visibility over the sourcing, use and movement of materials across their entire supply chains.

The World Economic Forum recommends that companies gain “a complete, end-to-end data set—such as covering the entire supply chain or providing visibility of an entire process” in order to measure emissions, model climate risk, estimate product impact and trace products from source to consumer.

Many companies do not have the in-house expertise or capability to gather and analyze volumes of real-time data without domain expertise. So, they turn to the growing community of technology startups and late-stage companies to deliver the solutions that enable them to analyze and use the ever-growing volumes of Big Data available from myriad internal and third-party sources to map their supply chains and trace all products from raw materials sources to consumers.

Once supply chain executives gain the ability to track the movement of materials along their supply chains, they can make better-informed decisions on how to reduce CO2 emissions and materials waste in products and packaging. That may include embracing additive manufacturing technologies to reduce, or even eliminate, the need to produce and ship products.

The advancements in additive manufacturing, including technologies like 3D printing, over just the last few years have been remarkable. Consumer goods companies are using these technologies to ship products as small as removable designer nail gels directly to consumers, salons and to building entire homes in the span of just a few days without hammering a single nail into lumber.

The Wall Street Journal reports that “the shareholder movement to press companies on climate change, social progress and governance continues to gain steam in the U.S., emerging as a key selling point for money managers in their efforts to keep client money.”

Large companies should allocate budget for piloting new technologies from technology startups that can help them improve supply chain traceability and reduce CO2 emissions and materials waste. Over time, large companies can and should start to develop these methods in-house. But, time is not a luxury many companies have.

The U.S. government has committed to meeting the Paris Climate treaty’s aggressive goals aimed at halting global warming, including cutting CO2 emissions in half by 2030 and eliminating them by 2050.

Set aside budget dollars today for conducting tests and trials with startups to supplement (not replace) in-house R&D enables supply chain executives to move quickly in measuring their companies’ environmental impact, taking steps to reduce their emissions footprint, measuring their progress and becoming fully transparent and accountable to government agencies, board members, investors and consumers.