Covid, wars, environmental issues and the singular scarcity of resources, our supply chains have moved from the shadows to the light in recent years, revealing all their complexity, their richness and, sometimes, their aberrations. What are we talking about? The supply chain includes several areas of action for companies: the supply chain, which allows the organization of production, from receipt to delivery of the product, but also the supply chain, which allows the control of transport and storage costs, resources, etc. In this respect, "supply", as it is called, constitutes the strategic, and often missing, chain of a real economic and environmental transition, the one that would make it possible to move from pacts to actions. You can think of it as a chain of dominoes. All it takes is for one not to be in place for everything to stop, for the domino effect to be stopped and for the chain reaction not to take place.
Having an efficient supply chain, in line with the current and future imperatives (CSDDD) of the transition, means guaranteeing more robust supply chains, a serious lead in terms of sourcing, and legal and reputational risks left to the competition... This deserves a diagnosis! Do you produce, assemble or resell goods? This diagnosis will undoubtedly lead to a multi-step action plan. Your European factories and sites may be decarbonised and compliant with regulations, but carbon assessments have taught us that it is scopes 2 and 3 that weigh on our footprints: 90% of the impacts – and risks – are those of distant factories.
It is therefore necessary to source agile and fair, to build product specifications straightforward and with the right inputs, to assemble as well as possible, to transport and deliver, to take back and recycle. The draft European regulation on imported deforestation, for example, is only the1st stage of a "green procurement" rocket: soy, beef, palm oil, wood, rubber, cocoa coffee, as well as certain by-products such as leather, chocolate and furniture are in the crosshairs.
So it's time to act. A few tips, a bit loose, as the material is so rich, to go fast and far:
1/ The environmental footprint is global, it's not just carbon, far from it!
Suppliers, product specifications, supplies: choosing means assessing the environmental challenge as a whole. Which materials should be used (plastics, wood, alternatives?), which chemistry should be used, and what are the product's end-of-life potentials (recyclability, compostability, reusability)?
2/ It is vital to structure the approach by consolidating the key issues and setting out your quality focus. Beware of false claims, which are myriad in sourcing. "Complanable" doesn't mean anything in itself, "biodegradable" doesn't mean anything either, "recycling" can be measured, and so does "bio-sourced materials". There needs to be serious and accurate content and labelling.
3/ Think about traceability and data (existence and quality) with your suppliers from the start. Digital can play a major role in this area with the automation of data collection throughout the chain, from manufacturing to delivery (using analytics to calculate the carbon footprint from packaging data to make it as green as possible, on stocks to optimize it and on means of transport for a better use of energy). It is also possible to use blockchain to accurately and "certified" track the carbon footprint of products throughout the supply chain.
4/ Identify key regulations that can significantly impact your approach and your license to operate. In Europe, global policy is putting considerable pressure on plastic products and single uses, chemistry will have to be reviewed with the addition of the "Reach" regulation and a "digital product passport" is provided for by the European regulation on eco-design. It will qualify sustainability, degree of reuse, repairability, regulation of substances, energy efficiency and choice of materials, recycled content, recyclability, environmental and carbon footprint. This passport will help consumers make informed choices when purchasing a product and will make it easier for authorities to comply with the issue. This is no small issue.
5/ Prioritise by sector and sub-sector, analyse the famous "underlyings". One man's supply chain is not another's supply chain. Within a player's operations, the value chains of different products and services will vary and cannot be addressed by a single strategy. These chains must be analysed from several angles: by priority, by weight or by criticality. Each supply chain, and its sub-segments, must take into account the realities and major trends of tomorrow's market (population explosion, geopolitical tensions, scarcity of resources, etc.). The supply chains most at risk of regulatory, societal or economic pressures will have to reinvent themselves first. Each element must be seen from the perspective of "sustainable development" criteria.
6/ Mobilize value chains and transform supply chains into value ecosystems for R&D and investment
7/ Reconciling the end of the world and the end of the month: the "cheap" is often a figment of the imagination, an optical effect, it is necessary to consider the total cost of acquisition, which includes a possible carbon tax, bonus-malus at borders, contributions to eco-organizations, investments in the upstream value chain (commitments and financial aid from the client at all stages of the value chain, multi-year vs. annual contracts, ...)
8/ No longer settling for purely financial business plans, we need a complete view of business plans that must incorporate reliable forecasts of environmental impacts and the resulting budgeting processes.
9/ Change management is essential, as is the implementation of KPIs to measure the performance of internal supply chain players. Because if we continue to judge the performance of buyers or logisticians with only costs as a reference and omitting KPIs related to the economic and environmental transition, nothing will ever happen!
Today, the supply chain can only be green!
