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Supply Chain Sustainability Goes High Tech

Supply Chain Sustainability Goes High Tech

* By Mary Lou Jay *

The promise of improved efficiencies and reductions in operating expenses are usually the major drivers when supply chain companies adopt digital technologies. But there’s another benefit that they should consider. Tech advances like the Internet of Things (IoT), data analytics, artificial intelligence (AI), 3D printing, robotics and blockchain can play a role in companies’ sustainability strategies.

Investopedia defines sustainability as “meeting the needs of the present without compromising the ability of future generations to meet theirs.” There are a wide range of actions that companies can take as part of their sustainability efforts, but reducing carbon footprints and safeguarding employees’ health and safety are key. Digital tech can assist in both areas.

Companies have many incentives to make sustainability part of their culture. First, it’s simply the right thing to do. Second, it usually pays off economically over the long term. Third, and perhaps most important, it’s something their customers want and expect them to do.

“The consumer is now empowered more significantly than they have ever been, and the Millennial consumer certainly has an expectation that they will do business with brands and companies that are committed to things that are of value to them. One of those things is sustainability,” said Kevin Reader, director of business development and marketing at MHI member Knapp Inc.

“This era belongs to consumers, and sustainability matters to them,” added Khwaja Shaik, an IBM Thought Leader and member of the IBM Academy of Technology.

Saving energy

Using energy more efficiently is often a first step in a company’s sustainability efforts. With sensors, the IoT, data analytics and even AI, a manufacturing facility or warehouse can find new ways to reduce energy consumption.

They can start by monitoring the power coming into a building to determine how efficiently they are using it. That’s the power factor. “What you want is a high power factor because that means you’re getting work out of your power; it’s not just getting dissipated as heat or being wasted,” said Eric Rice, principal product marketing manager at MHI member Honeywell Intelligrated. Companies can use data-collecting sensors and analytics to determine their power factor and to better understand how efficiently their control panels and equipment are running.

Honeywell Intelligrated can provide customers with statistics that show how much power it’s taking for every case of product they ship. If the power per case starts to go up, companies can determine if the problem is with mechanical wear on the equipment or with idle time on the system.

“You’re running all these conveyors for this eight-hour shift, but maybe the sorter or other key pieces of equipment aren’t really utilized by the product that is traveling across them,” Rice said. “So, you’re spending all the dollars that it takes to make the equipment move, but if you’re not putting much product on it, the power per case is going to increase, so it’s going to cost you more for every case that you ship out.”

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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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