H Sustainability Strategy

Incremental improvements to implement your sustainability strategy

June 6, 2023
Supply chain digitalization has evolved from giving organizations a competitive edge to becoming an industry standard.

By Rasheed Mohamad, EVP of global operations and business technology, Alcatel-Lucent Enterprise

In today's rapidly evolving business landscape, where sustainability is of utmost importance, supply chain digitalization has evolved from giving organizations a competitive edge to becoming an industry standard. To keep pace with challenges ahead, companies must embark on a digital-transformation journey centered on sustainability. While this is a significant undertaking, the benefits of a digitalized and sustainable supply chain far outweigh the efforts involved.

One of the most significant advantages of digitalization is the improved accuracy and efficiency it brings. Through real-time tracking and the implementation of software-led processes, businesses gain transparency, eliminating human error and supporting sustainability by minimizing waste and resource consumption.

Furthermore, the integration of automation and AI reduces processing time, increases operational productivity, and maximizes return on investment. By saving time and ensuring precision, businesses can achieve greater efficiencies, which contributes to sustainability goals.

In addition to accuracy and efficiency, a digitalized supply chain provides greater flexibility and agility. Fluctuations in supply and demand, as well as external circumstances beyond a company's control, can profoundly impact supply chain management.

However, with technologies such as automated stock management and predictive analytics, businesses can proactively identify and address upcoming challenges. Armed with both big data and granular insights, companies can make informed decisions, effectively manage crises, and continuously improve and seize opportunities.

To embark on this digital transformation journey, businesses should devise a strategy incorporating elements such as AI, automation, and digital twins. Instead of sudden and radical change, the approach should consist of incremental improvements. Begin by conducting a thorough audit of the existing supply chain to identify areas for enhancement, assess strengths and weaknesses, and evaluate risk factors. Leveraging the expertise of IT professionals and operations-management staff will provide valuable insights into the supply chain’s performance.

Software lies at the heart of supply chain digitalization, enabling businesses to streamline processes, manage supplier relationships, and oversee transactions. When selecting digital logistics and supply-chain-management software (SCMS), there is a choice between ready-made solutions and custom-built options. While off-the-shelf software offers simplicity and speed, it may not meet the specific needs of a business, necessitating additional plugins or add-ons. An alternative approach is to outsource a custom-built solution from a reputable partner who understands the organization's pain points, risk factors, and transformation strategy. This enables the business to benefit from a tailor-made software solution while ensuring uninterrupted operations.

The power of real-time data, automation, and AI play a pivotal role in achieving sustainable supply chain digitalization. Gathering data at multiple points along the supply chain, through technologies such as IoT devices, radio-frequency identification (RFID), and GPS improves connectivity and provides valuable insights.

Real-time data provides increased visibility, enhanced security, cost analysis, and accountability. Additionally, automation and AI support various tasks, including payment processing, information sharing, inventory updates, tracking, omni-channel retail sales, and email automation. While these technologies complement human capabilities rather than replacing them entirely, they excel in handling repetitive, manual tasks and acting as initial points of contact for customers.

Integrating technologies such as digital twins enhances sustainability by enabling analysis and optimization of operations. They allow companies to identify areas of waste, explore alternative materials and suppliers, and improve energy efficiency. By considering sustainability throughout the digitalization process, companies can optimize their operations to align with their environmental goals.

Digitalizing the supply chain with these tools is a transformative endeavor that empowers businesses to unlock the full potential of sustainability in supply chain operations. This approach revolves around harnessing the power of digital technology and seamlessly integrating data, processes, and systems. By adopting a comprehensive and interconnected approach, companies can ensure that data is no longer isolated and meaningless but instead integrated into every business decision.

While the digitalization journey requires an investment of time and resources, the benefits are evident not only in responding to unexpected challenges but also in the day-to-day operations of a business striving to remain competitive while driving efficiency for a sustainable future in the digital age.

By embracing these technologies and incorporating sustainability into their digitalization efforts, businesses can make a positive impact on the environment and contribute to a greener, more responsible supply chain.