Sector trends

Sustainable supply chains and the importance of end-to-end decarbonisation

Sustainable Manufacturing Insights Series: how to strengthen your business by becoming part of a greener supply chain.

The webinar featured insights from Mike Barry, Senior Associate at the Cambridge Institute for Sustainability Leadership; Andy Birtwistle, founder and CEO of SupplyVue; Martin Chilcott, chairman and CEO of Manufacture 2030; Katie Mills, Head of Innovation for the UK and Ireland, Schneider Electric; Andrew Storer, Chief Executive of Nuclear AMRC; and Allesandra Badino, Head of Sustainability and Environment for the UK at Airbus.

Key takeaways:

  • Experience in managing supply chain efficiency and supplier relationships mean manufacturers are in a prime position to lead global change in sustainability 
  • End-to-end sustainability benefits every part of the supply chain, and technologies like analytics, artificial intelligence (AI) and big data can make that possible
  • Technology and big data allow businesses to see and measure their Scope 3 emissions more easily and create simple and effective strategies that can have an impact
  • The vital data already exists – end-to-end sustainability will come from businesses collecting that data more efficiently and sharing it consistently with others in their supply chains

Manufacturing businesses must look beyond their own direct emissions for the greatest impact and benefits

Most manufacturing businesses are aware of their sustainability responsibilities and confident about creating positive internal change.

But the biggest decarbonisation opportunities lie externally. Research by McKinsey & Co reports that the typical consumer company’s supply chain accounts for 80% of its greenhouse gas emissions and more than 90% of its impact on air, land, water, biodiversity and geological resources.

Supply chain sustainability is great for business, and the risk of not addressing it is far greater than the investment of doing so

The main actions needed to build greener supply chains – such as measuring carbon, ethically sourcing materials and increasing transparency – contribute towards making businesses more cost-efficient, resilient and better able to deal with disruption.

Analytics, ambition and action: if you can do those three things, that’s a good starting point for your supply chain

Katie Mills
Head of Innovation for the UK and Ireland, Schneider Electric

Manufacturers can lead sustainable change in the supply chain and beyond

Manufacturers are well positioned to create large-scale change in their supply chains, and that will, in turn, aid national and global decarbonisation efforts.

Manufacturers already know how to manage supply chains for purposes other than sustainability, and most have influence over their suppliers. Collaborative sustainability, by its very nature, is something you do with your suppliers, not to them That means focusing on promoting the business case for sustainability, rather than simply insisting it’s “the right thing to do”.

Positive discussion points for apprehensive suppliers include:

  • the cost-saving benefits of reducing energy usage
  • the extra resilience that comes from streamlining processes
  • the flexibility provided by sharing assets
  • the opportunity to improve relationships with consumers and the wider supply chain

Increased visibility and connectivity will lead a new level of collaboration in the supply chain, and that’s vital for end-to-end decarbonisation

While manufacturers are confident of developing their own sustainable strategies, a lack of visibility across the supply chain means most can’t measure their entire impact yet.

Visibility will improve as businesses get better at connecting and collaborating, and technologies like analytics, artificial intelligence (AI) and big data make that possible.

Suppliers must work together to develop and introduce technologies that aid sustainable sourcing, for the benefit of all involved. Once they have access to consistent data across the whole supply chain, manufacturers can build a clearer understanding of their overall sustainability and, more importantly, identify opportunities for improvement.

Your customers will demand it [supply chain accountability] and the market will demand it, but it’s also a massive opportunity. Why not become the best? Why not become transparent? Why not have the most sustainable and ethical supply chain, and be able to prove it? How people find that motivation is different, but there are so many reasons for doing this, and very few for not. There are no trade-offs here

Andy Birtwistle
Founder & CEO, SupplyVue

The data already exists, so make your start

Much of the data needed for greater visibility already exists, but businesses should learn what to look for and become more efficient at collecting it. They need consistency and collaboration across the data that manufacturers and suppliers share in order to measure improvement.

Which data is most valuable to your suppliers and customers? And how should it be presented to achieve the greatest benefit? These are discussions to have both upstream (with suppliers) and downstream (with customers).

Start by taking small bites – by getting proper visibility of your supply chain, and your own operations. But don’t just get historical perspective; you need to be forward-looking to know whether you are reducing emissions fast enough. So work with your suppliers to build an Action Plan for reduction that enables you to forecast your rate of reduction.  Start with simple things you can achieve that are going to give you a return on your investment: energy, decarbonising, efficiency, waste reduction. Then you can move into the difficult areas, like changing suppliers, changing materials, engaging in the circular economy – some of the more transformative things

Martin Chilcott
Chairman & CEO, Manufacture 2030

If you would like to find out more about sustainable manufacturing solutions or how to make your business more sustainable, contact WMG at wmgbusiness@warwick.ac.uk or submit an enquiry to the High Value Manufacturing Catapult at https://hvm.catapult.org.uk/talk-to-us/

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