Sustainability

Next steps to improve your supply chain

Businesses need to pay closer attention to their supply chains so they can meet their ESG objectives and comply with legislation . But how can they do that with several major blind spots ?

First thing first , businesses must invest in their people , processes , and technology to meet legislative requirements , such as implementing effective third-party risk management solutions .

Secondly , they need to look at their supply chains and implement better tools for designing and planning them . A great example of this is digital twin technology which uses Artificial Intelligence ( AI ) to create virtual models of a company ’ s supply chain which can help improve resilience . Companies can use it for scenario planning and stress testing to discover if , and where , there are weak links and to assess the potential operational and financial impact from risky suppliers . This technology can deliver sustainability benefits too , such as helping to plan more fuel-efficient routes for the transportation of goods or reducing wastage by optimizing inventories and capacities .

Lastly , companies must engage in industry-wide collaboration and data sharing on suppliers ’ ESG credentials . All the US companies surveyed agreed that this would be useful information to have . Collaboration would save the duplication of work , as well as ensure that it ’ s collected efficiently and in the hands of decision-makers when they need it .

Modern technology platforms can make such data sharing easy , secure , and automated . They can feed realtime , third-party data to customers from organizations that monitor suppliers for ethical malpractice or environmental damage . For instance , if a supplier has committed an offence , it can automatically flag this to customers working with the supplier . Such high levels of transparency inform businesses if they ’ re working with a company that represents an ESG risk .

Many businesses have already spent time assessing , reevaluating , and fine-tuning as they navigate the disruptions they ’ ve faced . However , businesses that

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want to have a resilient supply chain

Dr . Madhav Durbha is VP of Supply Chain strategy at Coupa . Coupa is the cloud-based Business Spend Management ( BSM ) platform that unifies processes across supply chain , procurement , and finance functions . Coupa empowers organizations around the world to maximize value and operationalize purpose through their business spend .

must pay close attention to their ESG standards , especially if they want to be ready for the incoming regulations . ■

For a list of the sources used in this article , please contact the editor .