Recently, SupplyChainTalk, the online supply chain talk show, hosted an episode called ‘Making the most of data for supply chain sustainability.’ The guests included Rebeca Navarro Villanueva, Former CPO at ARYZTA, Vivek Luthra, Managing Director, Strategy & Consulting, Growth Markets Supply Chain & Operations Lead at Accenture, and our own Miles Weaver, Head of Product Marketing here at 7bridges.
Together they talked about the technological and data-focused trends they’ve seen in supply chain recently. They particularly explored:
- How data and tech are currently being used to support sustainability reporting
- The difficulty with scope 3 reporting in particular
- The immense strategic resource costs of manual reporting exercises
- Why data and AI are crucial in getting this right
- What they see coming in the near future
How is new tech being used in supply chains right now?
To kick off the episode, host Alastair Charatan asked the three guests to discuss the hot topics of AI, blockchain and DNA tracking. That last one may seem like it came out of left field, but in certain situations, it’s already a major talking point.
While all of the panellists agreed that DNA tracking has specific use cases and that blockchain has potential, the biggest mover in this section was AI and machine learning. Rebecca suggested it is currently used more anecdotally for governance’s sake. Meanwhile, Vivek and Miles both shared ways AI is the clear answer for emissions and sustainability right now.
Vivek shared that Accenture already sees AI used for emissions, especially scope 3 emissions. This is especially true because, at the moment, there is such a significant question about how we measure these. For example, Proctor & Gamble have 50,000 suppliers. And, in turn, they supply countless other businesses like Walmart. Their scope 3 data is massively complex. Which means tackling it with human intelligence is far from practical.
Miles added that, here at 7bridges, we’re excited about tackling that exact issue. Scope 3 data is notoriously complex and the more suppliers you have, the more data you have. The more data you have, the more difficult it is to manage manually.
The audience was also highly engaged on this topic; some were already excited about what AI can do for supply chain sustainability:
Want to learn more about what AI means for your supply chain? Check out our webinar: AI in supply chain - friend or foe?
Scope 3 reporting is harder than scopes 1 & 2
That was the sentiment shared by all three guests on the panel this episode. The consensus was that scopes 1 and 2 are well in hand and the responsibility for them is clear. Scope 3, on the other hand, is wide-ranging, hard to measure, and doesn’t have a standout standard to work within yet.
Rebecca, an ambassador for the Sustainable Procurement Pledge, said she has yet to see clear standards emerge for how businesses handle reporting practically. In fact, she shares that it is still usually a very manual exercise. And that means that your business is pulling together a group of people who are used to working on strategy and makes them focus on something that is an admin-heavy task.
So you end up with a valuable group of people who aren’t getting to use their skills and have removed access to those skills for the rest of the business.
Vivek then explored the need for there to be absolute, clear cut measures and standards. Given that, globally, we are all so far behind in this area, he suggests that the earlier these firm standards and regulations are in place, the better result we’ll see in terms of the climate. In the case of scope 3 emissions, data, Vivek shares, will be crucial. As businesses create their Net-Zero plans, they’ll need ways of identifying hot spots and doing lifecycle analysis.
Miles explains that the standards are important from a technology product design perspective too. Until we know what level of accuracy and the specific data points that are needed to be effective, technology will always have to make best guesses.
For now, he says, a broad data brush is fine, but in the future, what kind of detail will be needed? In reference to Vivek’s hotspots, what variable will those need to be judged by? Location? Provider? Transport vehicle? For now, it’s hard to say. But for most, having any reliable data at all is important.
Read more: Supply chain challenges with Scope 3 data
Upcoming scope 3 regulations
There is a whole host of regulations about sustainability in supply chains that have already cropped up, and more are expected to be put into play over the coming years. However, these have historically been voluntary disclosures. So what needs to happen for these regulations to become effective?
Learn more: The CSRD workbook for supply chain leaders
According to Rebecca, this all ties back into that question of resources. Instead of thinking into the future about what actions will need to be taken, teams are still just reacting to and coping with what’s impacting them today.
From a procurement perspective, she shares that sustainability teams really struggle with this. Which is why technologies that can speed this process up and lighten the resource load on companies will be key. With the extra time and resource availability, teams will finally have the space to innovate in this area.
Vivek says that, in supply chain, we’ve been focusing for so long on optimising just for cost and service. And now we’re trying to hit that perfect trifecta of cost, service, and sustainability. But the ESG muscles are new and we haven’t made them as strong as the cost and service muscles yet. And the sooner a business can see it needs to focus on that, the better.
One major problem, he shares, is the lack of industry standards as not all suppliers are created equal. And while regulations are starting to increase around things like packaging, it’s still early days for things like Scope 3 emissions.
Miles agrees and suggests that once the bigger players in industries start to act, the rest will follow. But until that time, it’s important for those who are already aware and already trying to make changes to nudge them along. And to show them that it’s possible to be sustainable, cut down on emissions and still drive down costs.
Learn more: The Green Ratio - your optimal path to a sustainable supply chain
To wrap the episode up, the three panellists go over their key takeaways around scope 3 emissions and tech. All three agree that technology will be critical for transitioning supply chains to more sustainable practices. But they also agree that getting a handle on scope 3 emissions data will be the biggest challenge. Investing in tech and building a business case for sustainability are the best next steps that supply chain leaders can take to tackle these issues.
Want to watch the full episode? Check it out here.