Provide Chains: What Are We Going to Do About It?

I forecasted years ago that the supply chain was vulnerable. While I didn’t foresee the pandemic, I did preach about things like the worker shortage and climate change long before the term COVID-19 became a household phrase. All of this is now having a profound effect on our supply chains—obviously. My question is this: What are we going to do about it? I have a few ideas.

In order to dig into this topic, let’s look at the second annual State of the Supply Chain Sustainability Report from the MIT Center for Transportation and Logistics and the Council of Supply Chain Management Professionals.

This report suggests supply-chain sustainability is based on both the environmental and social concerns of sustainability. It defines supply-chain sustainability as the management of environmental and social impacts within and across networks consisting of suppliers, manufacturers, distributors, and customers in line with the UN Sustainable Development Goals.

Here is what the report finds. Last year when the impact of the COVID-19 pandemic was escalating, many expected the crisis to slow enthusiasm for investing in supply-chain sustainability. That isn’t exactly what ended up happening.

The survey results suggest the pandemic did not slow the push to make supply chains more sustainable. In fact, more than 80% of survey respondents claimed the crisis had no impact or actually increased their commitment to supply-chain sustainability during that time. The caveat is this. Steady progress continued with the large and very large companies. Meanwhile, small and medium-sized companies were more likely to pull back.

Well, now, it is time to ramp back up. I have three big takeaways from this report.

Social issues will remain a priority. This heightened awareness of forced labor and social inequalities in 2020 is one key area we need to rebuild our economies and our supply chain. In this report, the concept of a moral calculus is explained. Companies will need to juggle the needs and tradeoffs of investing in different sustainability dimensions. Companies will need to consider things such as social issues like worker welfare and safety as well as environmental commitments such as climate-change mitigation and product stewardship.

Climate-change mitigation is a must. I said this at the very start of 2020—even before the pandemic hit the United States—this is the decade of sustainability. It has to be because we have no other choice. We need to invest in sustainability for energy savings. We need decarbonization and we need to fix it to help stabilize our supply chains. It’s almost ironic, that today, almost everyone understands what a supply chain is and many even reference a supply-chain management system when referencing a bottleneck in the grocery story. It took a pandemic and now, the aftermath of delays, for people to pay attention. Sadly, what will it take for us to come together to really listen about sustainability and circularity. This is all tied together. Many companies have gone public with bold commitments to sustainability. Microsoft, for example, has announced its 2030 carbon-negative goal, while Walmart has promised to become a regenerative company by 2040. We are starting to see some real progress being made in this area.

Digital can transform our supply chains. This report points to specific examples of how digital transformation can help our supply chains. For example, on December 29, the Federal Railroad Commission announced that positive train-control technology was successfully deployed on all 57,536 miles of required track. This technology tracks a train’s position and automatically deploys brakes to prevent collisions, speeding, and trains entering danger zones.

Here is the reality. If we know the worker shortage is going to continue to be a problem—and we know it is—we need to start leveraging technology to look at every aspect of the supply chain. We have to prevent the bottlenecks. Speeding up the trains is essential and if we are going to move those trains along, we had better make sure there are systems in place to ensure there are people on the other end to receive those goods. Literally. It’s all about collaboration and leveraging a supply chain that is linked. This is simply one example. There are so many other areas we can automate. We need to start taking the steps to do so safely, securely, and efficiently. As always, it’s about people, process, and technology. We can do it if we consider how we want to be resilient and sustainable.

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