We know that sustainability will continue to be a top priority for businesses in the coming years – but there is a gap between the desire to do the right thing, and its implementation. In our recent SAP sustainability survey, we found that one-third (31%) of UK businesses say that a lack of environmental strategy is preventing them from achieving their ESG goals.
When you study the findings, it’s easy to see why there is a gap between motivation and implementation. Many businesses don’t believe they have the right data (Opens in a new tab) to accurately measure their environmental impact, and – in particular – almost half of companies rely on estimates to assess their supply chains.
If we are to make meaningful progress in the coming years and ensure a better, greener, future for our planet, this data gap must be addressed. The answer here may lie in digital twin technology. Through this, organizations can map their ever-changing supply chain environment, ensuring they have the insight needed to stay on top of potentially damaging environmental changes and achieve sustainability targets in real time. time.
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Balancing supply chain uncertainty with sustainability
Supply chains are extremely difficult at the best of times, and due to current macroeconomic conditions, are increasingly changing and changing. From the ongoing effects of the pandemic and Brexit to the current cost of living crisis creating more uncertainty, businesses are constantly having to adapt and change supply chains in a situation of progress. When navigating these ongoing challenges, it can be easy to lose sight of sustainability goals and tracking environmental impact can be like trying to hit a moving target.
Supply chains require large amounts of financial and human resources to finance and manage. From the way raw materials are obtained to the production and transportation of goods, each stage has an impact on the environment that must be assessed. To balance both challenges, while also progressing towards sustainability goals, businesses must develop new approaches to their business models that allow them to anticipate and eliminate environmental impacts, directing resources as needed. To make this possible, it requires the right solutions that improve the visibility of supply chains, ensuring that the impact is measured and addressed.
Steve Van Wyk is SVP & Head BTP for Customer Success at SAP EMEA North.
Improve insights and drive better business
CLOUD (Opens in a new tab)-enabled solutions that leverage the blockchain (Opens in a new tab) and machine learning technology to create digital twins in supply chains supporting businesses in achieving their ESG goals. By providing more visibility throughout the value chain, businesses can not only track material flows from source to market, but can even simulate sustainability results using parameterization, seeing what happens when we do this or that. This means that as materials move throughout the supply chain, businesses can track waste, such as carbon emissions, in the process. This drives better decision making as organizations use tools to identify and address points of greatest impact, while also providing the insight needed to identify areas where resources can be better managed and reused. Through this, sustainability can be embedded at the core of business operations.
This not only supports businesses in reducing their environmental impact, but also allows them to remain competitive and reduce overheads in the long run. By having a holistic view of the entire supply chain, businesses can ensure that they comply with regulatory standards, whether that relates to plastic packaging or carbon emissions.
At the same time, consumers are becoming more goal-oriented, meaning they are more likely to engage with businesses that make sustainability a priority. Therefore, taking the necessary steps and adopting technology that helps organizations prioritize sustainability is a strategic decision that permeates the entire business.
Leading the way, digitally
There are already businesses leading the way in this space and using supply chain technology to make sustainability a driving force in everything they do. For example, pledging to achieve net zero emissions and halve their virgin plastic packaging use by 2039, Unilever is using digital twin technology to make this possible. By tagging each part of the supply chain through the blockchain, the solution creates a trail of digital signposts that capture real-time information on the origin of materials and travel across the supply chain, which giving them the ability to take a targeted approach and intervene in areas. where there is a higher environmental impact.
In other instances, we see businesses tracking their supply chains to optimize product quality and reduce plastic packaging. The leading plant-based consumer packaged goods company, Upfield, uses digital twin technology to ensure the 100% natural formulation of the materials used in its products and trace the carbon footprint. Through this, it is able to assess the suppliers it works with and ensure that it can identify those that are compatible with its product strategy, while also meeting sustainability requirements.
Sustainability starts with technology
Sustainability is now at the top of the business agenda around the world, prompting many to put their money where their mouth is and change their business models to meet targets. At the very center of this change is the supply chain. With the potential for environmental impact across the value chain, it is now critical that businesses have the oversight and data needed to identify and address areas for improvement. And technology is the driving force that makes this possible.
Through digital twin technology, businesses have improved visibility into their supply chains, allowing them to measure and stay on top of their environmental impact. Then, they can act accordingly, changing business practices accordingly. While it may not be easy considering the other macroeconomic forces at play, both business and planet will benefit in the long run.
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