Rattling the supply chains: creating a more sustainable way to do business
Sustainable supply chain management is a “strategic imperative” with “far-reaching implications for economic, environmental and social wellbeing,” a University of Manchester academic has warned.
Writing in On Infrastructure, a new publication from Policy@Manchester, Dr Arijit De – who has been cited in numerous international journals - highlights the startling statistic that global supply chains now account for approximately 80% of global greenhouse gas emissions.
And he cautions that ever-increasing interdependencies among and between organisations have made these networks susceptible to both human-made and natural disruptions.
“Global disruption events such as the Japanese tsunami in 2011, Typhoon Haiyan in the Philippines in 2013 and earthquakes in Chile in 2015 have significantly compromised the performance of goods supply chains in recent decades,” he writes. “On the national scale, disruptive events can also impact supply chains and businesses – such as KFC’s logistics blunder and road accidents at the vicinity of a distribution depot in 2018, leading to two-thirds of their outlets in the UK having to close due to a chicken shortage.”
But he adds: “By integrating sustainability metrics into decision-making processes, organisations can meet the dual challenges of mitigating fuel costs and reducing carbon emissionswhile enhancing operational resilience during disruptions.”
In his piece, Dr Arijit De - Associate Professor in Management Science at the Alliance Manchester Business School, The University of Manchester – explains that models developed using AI can be deployed to make better decisions regarding resource allocation and supply chain resilience.
“For example, grocery and general merchandise retailers in the UK have used AI-driven algorithms to optimise supply chains by dynamically adjusting delivery routes based on real-time data, predicting the best transportation methods, and accurately forecasting demand to manage inventory,” he writes. “This approach enhances efficiency, reduces costs and mitigates risks, ensuring faster delivery times and a stronger, more flexible supply chain. It is important that the Department for Business and Trade incorporates these models and approaches into UK supply chain strategy.”
Dr De unveils University of Manchester research findings which demonstrate the importance of allocating resources and capital to strengthen and protect the supply chain infrastructure, known as “fortification investment.” He adds: “This helps in making the supply-chain facilities more resilient to disruptions, optimising product flow from distribution centres and enhancing better connectivity during disruptive scenarios by adopting goods sharing strategies between facilities.”
He also outlines a series policy recommendations emanating from this research which, Dr De argues, are “imperative for advancing sustainability in supply chains.”
These include a call for policymakers and national governments to “prioritise the integration of sustainability criteria into procurement practices and supply chain regulations” by “incentivising sustainable behaviours among stakeholders and fostering collaboration across industry sectors” such as freight, food and manufacturing. This could be done in a range of ways, he explains, including the offer of tax credits, subsidies for green technologies, and grants and low-interest loans for sustainability projects.
The University of Manchester researchers also advocate investment in technology and infrastructure as an “essential” means of enabling the transition towards sustainable supply chains. “Embracing digitalisation, automation, artificial intelligence and renewable energy sources, such as employing electric vehicles, can facilitate resource optimisation and emissions reductions,” Dr De writes. “A step forward for infrastructure investment would be for government to invest in and expand electric vehicle infrastructure/charging points.”
And he recommends that Regulatory frameworks such as the UK’s Climate Change Act should adopt “a comprehensive approach that addresses not only environmental concerns, but also the social and economic dimensions of sustainability,” Dr De explains. “This necessitates the alignment of policies with international sustainability goals such as the United Nations Sustainable Development Goals.”
On Infrastructure is available to read on the Policy@Manchester website.