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A System of Systems to Guide the Development of Sustainable Solutions

A System of Systems to Guide the Development of Sustainable Solutions

* By Bill Ferrell, Ph.D., PE, Fluor Professor of Industrial Engineering, Associate Dean of the Graduate School, Clemson University *

When you saw that this issue of MHI Solutions was focused on sustainability, what thought first crossed your mind? Reducing your carbon footprint? Adopting the right technology to effectively accommodate changes demanded by customers? Developing new business models and processes to ensure future profitability?

To me, all are great answers, but they seem so different that it is hard to visualize how these can all be “sustainability” initiatives. If you are willing to try to find some order in this chaos, stick with me for a few minutes, and let’s see where this goes.

OK, the obvious commonality is the long-term element. A sustainable solution is not focused on the next quarter’s revenue. But is there something deeper and unifying? As an industrial engineer, I tend to first look at things from a systems perspective, so, think of your business as a small system embedded within large systems. That is, each of our companies is part of a larger industry segment, the even-larger logistics industry as a whole, and, finally, planet earth.

From this perspective, some interesting dynamics and interactions are visible. The large systems are constantly changing and evolving due to a variety of factors. Sustainability efforts are limited to controlling our small system, but they are motivated by the changes in the larger systems. Some efforts try to impact the larger system, and some try to keep the changes from hurting our small systems.

For example, the freight transportation system in the U.S. has a carbon footprint as large as many countries, so companies that strive to become more environmentally friendly are trying to impact the largest system. Or, the current dearth of skilled workers in the U.S. is motivating companies to use automation so the required number of employees is reduced; that is, trying to prevent a larger system trend from impacting our small system.

If this idea is palatable, we can leverage it to think about the future and which sustainability efforts are best for us. Understanding the larger systems–changes, trends and the speed at which they are occurring–is a key. Today, it is popular to characterize these changes as “disruptors.” This is true, but don’t be fooled that the disruption happens quickly. One of the most celebrated disruptors is Amazon. It was incorporated this month, 25 years ago! The iPhone is also a serious disruptor. It was first released last month, 12 years ago.

Notice the takeaways. The larger systems change slowly, which means there is time to establish thoughtful goals and initiate activities measured way if we pay attention. Panic and kneejerk actions that create unintended consequences are unnecessary if we just pay attention. This slower pace allows time to initiate sustainability efforts to address multiple trends in the larger systems. It is possible that clever and innovative people can meet changing customer requirements, reduce carbon footprint and evolve business models simultaneously, and for the long run, and with few unintended consequences.

If I were clairvoyant, the rest of this article would be far more interesting because I’d just forecast large-system trends for the next few decades. Unfortunately, I’m not, so you’re only going to get some thoughts on trends that might be worth considering as you ponder the interaction of your small system and the larger ones within which it is embedded.

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This issue of MHI Solutions focuses on sustainability and its progression in the supply chain. Consumers are becoming more interested in making environmentally friendly decisions when it comes to their buying habits and the brands to which they are loyal. Studies have found anywhere from 80-85% of consumers are more likely to buy from a company with a reputation for sustainability than from a neutral company, if their prices are equal.

Leading firms are tapping into this mindset by building more sustainability, and transparency, into their supply chains. They know that more sustainable operations will drive long-term brand loyalty and competitive advantage while having bottom line impacts on efficiency and profitability.

This issue of MHI Solutions will help provide you with the information and resources you need to address sustainability across your supply chain to improve your overall business performance.

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