The amount of data that is being collected on sustainability and the number of targets that are being set to enhance environmental practises are both growing at amazing rates. It's amazing to observe how quickly and dramatically companies can adapt to new circumstances in a relatively short amount of time.
Moving beyond environmental reporting and transforming sustainability data into effective supply chain activity is a difficult task that presents a significant obstacle. It demands a level of change and scale that most companies aren't willing to make at the moment. What if there was a way to combine the data we collect on sustainability with the data we collect on supply chain operations while still using our existing processes? Would that make future decisions easier to understand and implement?
The solution that we have been searching for may lie in the consolidation of data pertaining to sustainability and supply chains into a single supply chain planning solution. Chief supply chain officers (CSCOs) could include sustainability measures into their operations, discuss the performance of their trade partners, and evaluate what-if scenarios using simulations that take into account the impact that changes to the supply chain will have on the environment.
The following is a brief illustration utilising sales and operations planning:
As is common knowledge, sales and operations planning, often known as S&OP, refers to an integrated planning process that integrates supply, financial planning, as well as demand. Its purpose is to enable decision-making in the direction of a material and financial plan that is both practical and lucrative.
We are able to incorporate data on sustainability and include a review step within an S&OP process in order to assess how well sustainability is being performed. We are able to delegate duties that are connected to the goals of sustainability and communicate with our trading partners in order to solicit their assistance in completing those responsibilities.
Now that we have the capability, we are able to visualise sustainability KPIs across the supply chain, and this can immediately reveal several difficulties that need to be addressed. In the framework of waste, emissions, planning period and projection, water consumption, as well as any other metrics related to sustainability can be analysed.
Sustainability across the entire supply chain:
You might gain access to your suppliers' sustainability performance by extending this to them. Ranking them accordingly offers insight into the status of their sustainability activities and can affect how you conduct future business with them. To comprehend the sustainability effects of transportation systems as well as routes, you might additionally use downstream distribution and transportation data.
The next step is to aggregate these metrics into a single score to present a complete view of the sustainability performance of your supply chain. Now you may track performance in relation to your sustainability goals.
Adjusting make versus purchase, locating alternative suppliers, and utilising higher-quality materials are all measures you may take inside your S&OP process as you develop new ideas and assess their viability. As a few of such decisions can have an immediate effect on revenue and expenses, you may also be able to assess their financial impact.
We may be able to improve our capacity to make meaningful use of sustainability data by incorporating such data into an S&OP framework. In addition to this, it demonstrates how we can plan for the demands of the supply chain in the mid- to long-term while simultaneously taking into account our efforts in improving the quality of and making more environmentally responsible decisions regarding the supply chain.
This is just one example of the many potential uses that businesses might put to use to achieve their sustainability objectives. The Sales and Operations Planning process can help put sustainability data to use by assisting with the integration of objectives into the S&OP process, the monitoring of performance in comparison to targets, the evaluation of the impact, and the improvement of sustainability performance through simulations and planning updates.