Reimagining Sustainable Supply Chains with Business Intelligence

The word ‘sustainability’ has been a mantra for environmental consciousness for decades; but in a business context, it’s somewhat of a misnomer and the outcomes are far more dynamic than ecological impact. Operating sustainably goes beyond social and environmental consequences – it’s about being more open-minded, nimble, and digitally connected than ever before.

This approach has often been tied to capital expenditure, rather than capital growth and our customers are proving that doesn’t have to be the case. We need to reimagine sustainability through the lens of a growth mindset as a business principle and as an opportunity for organisations to run faster, better, stronger, and with the customer central to every strategic driver.

A new report by SAP and the Which-50 Digital Intelligence Unit, called Respond, Prepare and Reimagine, highlighted the findings from leading industry researchers such as BCG, Gartner, Juniper and Forrester. A key takeaway from this comprehensive report is an anticipated move to deeper consideration for strategy and cost structure in managing larger, more complex digital markets.

With the evolution of e-commerce and intelligent technologies, supply chains have shifted towards digital supply networks that are interconnected, data-rich, and readily accessible, which allows brands to adapt and respond rapidly to volatile market changes, customer demands, and industry disruptions – thereby building supply-chain flexibility and resilience.

COVID-19 demonstrated to consumers and business first-hand how our old ways of supply and demand, hyper-capitalism, and the endless pursuit for exponentially improved returns aren’t always sustainable. According to the Respond, Prepare and Reimagine report,

“87 percent of people born between 1990 and 2015 believe that the success of a business should be measured in terms that go further than its financial results”.

Consumers are growing more aware of how businesses operate, how supply and demand are impacting their lives in tangible ways. They also have more awareness of their power than before to vote with their wallets, source their goods from anywhere, and boycott/cancel brands that don’t operate ethically. According to the Harvard Business Review, nearly 66% of consumers believing they have a responsibility to purchase products that are good for the environment and society.

Consequently, brands are realising that purpose and profit aren’t mutually exclusive. However, consumers’ shifting priorities towards sustainability and its broad spectrum of social consequences have demonstrated the business results of being purpose-driven first, bottom line second. Organisations understand that operating sustainably makes better business sense than short-sighted financial successes. Most of which, the impact to our sole, collective marketplace (Earth) would have on business continuity and profitability, a recent report from the New York times puts this number at $US970 billion being wiped off the value of 215 of the worlds largest companies due to the climate crisis.

In thinking more broadly about sustainability, businesses must understand the intelligent technologies and practices that provide greater convenience, efficiency, and safety for employees, end-users, and customers. As our communications, consumption, and business functions become increasingly digitalised, the drive for scalable sustainability will lead to further innovation in the technology space with processes such as automation, digital supply chain twins, and continuous intelligence providing businesses with further versatility while mitigating risk.

According to Christian Titze, Vice President Analyst with the Gartner Supply Chain Practice,

“The vast majority of organisations have a cautious approach to adopting supply chain applications and technologies. Only 21 percent are willing to consider, and often adopt, early-stage technologies. However, even cautious supply chain leaders must keep an open mind and embrace long-term perpetual change.”

Creating a sustainable supply chain means utilising the latest technologies and trends while aligning business models with changing consumer expectations. With consumers demanding more transparency and accountability from brands; innovative businesses are responding by embedding sustainable processes within their intelligent enterprise.

By investing in technology to achieve this, companies can focus on reducing environmental impact, supporting local suppliers, co-innovation and stepping away from the legacy of zero-sum game win-lose business practices, and focusing on collective win-win practices. Often this investment pays off not only in a return on investment, but by enabling exponential growth and positive customer outcomes in a more sustainable, scalable, and ethical way.

Supply chains are at the forefront of this wider business transformation, particularly since COVID-19 showed us how the supply chain function is ground zero for impact and the most vulnerable for disruption. The most resilient businesses adopted more sustainable practices to help remain competitive, agile and customer-focused. Sustainability needs to be a more accessible and holistic concept for businesses looking to drive purpose and profit together.

SAP remains committed to empowering people through technology, providing scalable digital solutions while broadening their understanding of sustainable business. As part of fostering this mindset shift, SAP is broadcasting our Perspectives 2021 live from Sydney on 24th March.

This forum event will bring together research analysts from Harvard Business Review and local executives to share their insights on what we can expect in 2021 and beyond, understanding how the future of work, sustainability, and data-driven technologies will fundamentally change the way businesses grow.

Another development for pushing positive and sustainable outcomes is our SAP Climate 21 Initiative, which reaches beyond corporate practices of emissions reporting and other sustainability issues to help both businesses and consumers make more responsible purchasing decisions.

A key advocate for this all-encompassing approach to sustainability is Michael McComb, VP of Communications and Sustainability for SAP APJ & China. His role combines the technical expertise, marketing insights, and communications knowledge required to change people’s thinking about sustainable supply chains, making sustainability a priority for businesses moving forward. I personally am looking forward to the discussion I expect to see with my colleagues and customers in this space and the innovation this drives for the wider community.

Digital technology and intelligent solutions will play a critical role in building more sustainable, equitable, ethical, and efficient business practices. Last year tested our ability to adapt while 2021 will be the vital first step in our global response to the lessons learned.

Creating sustainable supply chains will have far-reaching benefits across industries and geographies, so be sure to attend the upcoming Perspectives 2021 virtual event to learn more about the solutions, initiatives, and technologies that are helping ANZ businesses rethink the role of their supply chains in taking the next step towards a sustainable future.