Building a realistic roadmap to usher sustainability in supply chain operations

“In the future, we can see a closed-loop supply chain, where products will be returned and re-integrated in the supply chain for future use,” believes Frank Clary, the VP of sustainability at Agility

This interview was conducted at Reuters Events: Supply Chain USA (May 17-18, Chicago, 2023).

The need for sustainability in the supply chain is gaining more relevance, often being a topic of contention within company boardrooms. While the concern and focus on carbon footprint is not misplaced, efforts need to be backed by data on energy consumption and resource utilization. Data is crucial to ascertaining the carbon efficiency of supply chain and transport operations, providing a way to measure outcomes and benchmark them against the regulatory yardstick.

“This is because carbon and energy efficiency are correlated to cost,” said Frank Clary, the VP of sustainability at global supply chain major Agility. “The faster something moves, the more energy it consumes, and is more cost intensive.” 

Clary explained that data analytics on energy consumption during freight movement can be an excellent barometer to gain insights into operational efficiency. Considering freight moves over various modes along its linehaul — including sea, air, and over-road networks — understanding freight efficiency will enable companies to optimise their supply chains, reduce costs, and ultimately lower their environmental impact.

“The goal is to streamline and make my supply chains more efficient — from product development, planning, manufacturing, all the way through to product delivery and use,” said Clary. “In the future, we can see a closed-loop supply chain, where products will be returned and re-integrated in the supply chain for future use.”

For businesses aiming to make their supply chains more sustainable, Clary emphasised that the real focus should be on the people behind the technology. While there is a lot of buzz around adopting advanced technologies like blockchain, the Internet of Things (IoT), and artificial intelligence (AI), it is crucial to remember that these tools are only as effective as the people who use them.

“Think about the people — engage with your internal stakeholders, customers, and community regulators. Engage with all the stakeholders that have an impact on your company. This will help you find out where you need to go as an organization and how to get there,” said Clary. “Rely on your people to tell you how to convert insights into practical decisions. AI and data analytics can give you information, but it’s the people who interpret it and make decisions. So, start with the people, then look for technology you need to adopt to transform your supply chain." 

At Agility, transformation efforts improving sustainability are viewed through a long-term perspective. “We incorporate sustainability by coming up with a strategy that is future-proof and ready for a low-carbon future. It is a plan that is ready to migrate through the energy transition and is accommodating to workforce expectations like fair labour,” said Clary. “The idea is to meet the demands or requirements of the future, and adopt technologies needed for that purpose. Also, have your people define that purpose and keep operations lean.” 

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