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Supply chain sustainability: it comes down to the data
Simon Angove |
July 4, 2024 |

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When it comes to environmental impact, the supply chain has a visibility problem — and not just between external partners.

Data sharing around sustainability initiatives between manufacturers, distributors and businesses within their ecosystems continues to be a struggle. A Deloitte study found that only 13% of companies can map their entire supply chain, and nearly three-quarters can’t see beyond their primary suppliers. That means supply chains miss plenty of opportunities to reduce empty miles and improve resource conservation.

But we don’t talk enough about what happens with this data once it’s shared. Research by Standard & Poor’s revealed that one in four companies manage more than 50 data silos, preventing R&D, sales, marketing, finance and distribution — among other departments — from seeing the same data at the same time to work collaboratively. When only R&D has access to information about how much plastic is used in manufacturing and shipping, finance can’t make accurate decisions about how to adjust spending on the resource. Distribution doesn’t have the data needed to fix operations to reduce waste, and so on. Bottom line: Communication must be improved both inside and outside the organization.

With more countries introducing regulations to combat climate change, supply chains need to be more proactive. And supply chains need to prepare to address growing sustainability issues and accurately report on their efforts.

Getting Data in Order

Before supply chains can implement effective sustainability initiatives, all participants need to be on the same page regarding data. Sources such as customer, product and location data must be visible across departments, as well as continually cleaned and up to date. Maintaining inconsistent data sets throughout the organization is a great way to sabotage collaboration.

Tools such as master data management help bring an end to silos within organizations. MDM offers visibility into all sources of data across a business, while giving the user the ability to determine which departments can see what data. The adoption of MDM makes it much easier to ensure that clean data is distributed across the business, and simplifies collaboration without exposing sensitive data to the entire organization.

With a centralized view of both internal and external data, supply chains can ensure that their resource utilization, emissions and sustainability metrics are consistently reported. And because MDM allows users to see their supplier and product data concurrently, supply chains can prioritize relationships with vendors aligned with their sustainability goals, while reducing ties with vendors that aren’t keeping certifications and compliance efforts up to date.

Employing Data in Sustainability Efforts

With data access and sharing improved through MDM, supply chains gain access to a wealth of information that enables more sustainable decision-making. MDM grants visibility throughout the product lifecycle, from manufacturing and distribution to inventorying and disposal. Using this data, supply chains can uncover which areas of product development consume the most energy, and identify strategies to reduce consumption with minimal impact on operations. They can also find areas where resources are wasted, such as an unnecessarily high use of plastic to pack and ship goods.

Because businesses are now under greater scrutiny to meet sustainability requirements, data management tools can be a reporting lifeline. MDM makes it easier for supply chains to view manufacturing trends over time. Manufacturers and distributors can also set more realistic goals based on resource consumption, execute more effectively, and track efforts for continuous improvement.

Keeping up With Compliance

More governing bodies are regulating carbon footprints, as efforts to meet climate goals intensify. The task of staying up to date with these evolving regulations, and ensuring that all operations are in line with those expectations, is taking up more time and resources. It presents an even greater challenge for compliance managers to gather and clean data for ongoing reporting.

MDM simplifies the process of collecting and disseminating sustainability data. With a single view of data across design, production, use and disposal, compliance managers can ensure that data remains consistent across departments. They can also access key metrics faster, expediting data gathering for stakeholder reporting.

MDM is also a valuable solution to help manage the European Union’s upcoming digital product passport requirements. The DPP initiative will create a product lifecycle repository for most businesses selling products in the EU to disclose their products’ social and environmental impact data, such as resource use, carbon footprint and labor conditions, to customers, vendors and government entities. A multi-domain data management tool can centralize the tracking of these metrics, and help uncover opportunities to reduce waste wherever possible.

Managing a supply chain’s carbon footprint can be daunting. Before taking the plunge, businesses need a solid foundation of data to implement projects effectively and ensure that goals are being met.

With MDM, businesses have a valuable opportunity to overhaul how they track sustainability efforts. MDM breaks down internal silos, allows visibility into a product’s carbon footprint throughout its lifecycle, and simplifies compliance efforts. The road to developing more effective and achievable sustainability programs starts with a unified data management approach for comprehensive insights.

Author: Simon Angove

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