Plastics, Profits and Purpose: The Need to Re-imagine Supply Chain Management

Increasingly, consumers like you and I are becoming more mindful about the impact we have on our environment and the economics driving this impact. According to renowned author and social activist Naomi Klein, our economy is at war with life on earth and the ever-expanding activities of hyper-capitalism are increasingly damaging our environment. The production and movement of goods, and services is the primary culprit in climate change, therefore we need to re-imagine supply chain management from end-to-end.

It is my belief that businesses that will thrive in this era of planetary concern recognise social and environmental challenges as key opportunities for innovation and positive impact. Considering the historically adverse impact big business has had on our environment, corporations today have a vital role in advocating more sustainable practices, which move us towards a circular economy. However, sustainable global impact can only be realised through collaboration across regions and industries.

Drastic change needed for plastic waste

Recently in Australia, our teams followed the footsteps of Stephen Jamieson, Head of SAP Leonardo in the UK, who teamed up with design expert David Kester to create a series of Plastic Challenge workshops – bringing together consumers and industry experts to create meaningful change and innovate with purpose. These workshops with our important Australian companies facilitate partnership and innovation.

As in the UK, Design Thinking and collaboration were paramount to producing solutions such as rewarding consumers for more environmentally conscious purchasing decisions and informing buyers about proper methods for recycling plastic waste.

Another solution that emerged from these workshops overseas was the development of SAP Plastics Cloud, which incorporates machine learning, big data, and analytics to feed real-time information of all plastic that enters a waste system. This allows waste managers to monitor and predict where waste is happening and how it will impact the system.

A sea change in ocean plastics

Recently, the Ocean Plastics Leadership Summit brought together a large and diverse group of experts from different fields and industries, with representatives from HP, GE, Colgate-Palmolive, Nestle, P&G, plus packaging companies Berry Global, Sealed Air, and Novolex. The Summit brought these major corporation together with scientists, thought leaders, and NGOs to design solutions to the increasing amount of plastic waste in our oceans.

One of the primary issues highlighted was the fact that businesses manufacture and package single-use products in materials that essentially last forever. However, by the end of the summit, major commitments were made, such as some large plastic producers and sellers committed to using 50 percent recycled plastic in their products before or by 2030, while major brands and NGOs formed a coalition to engage retailers in eliminating plastic waste in packaging.

Dow Chemicals and SAP also demonstrated deep commitment to sustainability with Dow Chemicals leading a $1 billion global alliance to end plastic waste in the environment, and SAP revealing a bold vision to help eliminate ocean plastics pollution by 2030 through the creation of Plastics Cloud.

Putting purpose before profits

Beyond corporate social responsibility, environmental consciousness also drives financial value for businesses since production, logistic, and energy costs can be curbed with greener alternatives.

More and more businesses are recognising the potential for intelligent technologies to assist in supply chain and inventory management. By improving supply chain efficiency and procurement procedure, organisations can reduce financial costs, waste produced, and overall environmental impact. However, this requires a collective effort across the supply chain and an alignment of stakeholders’ social and ethical values.

For example, Johnson & Johnson manages its $2 billion procurement spending with Intelligent Spend Management, which uses numerous SAP solutions to address broader business spending challenges such as travel, procurement, and external labour.

Jennifer Morgan, member of the Executive Board of SAP SE and president of the Cloud Business Group said, “The spend management mandate is expanding, both within functions and across the organisation. That creates an opportunity to improve collaboration across finance, procurement, and to tackle joint business challenges with increased spend transparency.”

Industry collaboration and intelligent technologies are vital to creating lasting environmental change. An increasing number of corporations are recognising the ethical and financial benefits of sustainability. However, time is of the essence if we’re going reverse the centuries on environmental damage we’ve already subjected to our planet. It’s about defining our purpose and valuing our earth’s well-being over the bottom line. It’s one of the reasons I feel very privileged to work at SAP.

This article was originally published on Linkedin