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Achieving green & sustainable supply chain management

19 Mar 2021

What does environmental economic regeneration mean for supply chains?

Climate change has become a driving force for businesses and individuals and there is a growing sense globally that we are poised at a critical moment in time.

Our Future Ready report confirmed that over half (53%) of business’ commitment to social responsibility is based on a genuine sense of moral obligation.

Post-COVID investment and recovery policies could be the key to safeguarding the environment. But what will this look like in practice and can companies combine their green goals with government incentives?

Sustainable supply chains

In Europe, green investment is at the heart of the recovery model.

The European Commission, the European Parliament and EU leaders haveagreed on a recovery plan financed through the EU budget: a total of€1.8 trillion will help rebuild a post-COVID-19 Europe, with an emphasis on greener, digital investment.

There are opportunities to improve energy management, enhance water management and reduce wastage throughout the supply chain.

One of the quickest wins is rapid access to renewable energy sources.

Power generation has changed dramatically in recent years, with a shift to heat pumps, wind turbines and solar panels helping energy systems decarbonise globally.

Analysts predict that capital investment in renewable power supply will overtake upstream oil & gas in 2021 for the first time – and this shift towards renewable power sources is providing companies with a great way to accelerate sustainable goals.

At Vodafone, our European network will run on 100% wind, solar or hydro renewable electricity by July 2021 — four years earlier than planned. Also, we are investing in energy efficiency initiatives across our networks, particularly in power supply and cooling.

Managing distributed renewable assets and power networks

The decentralised renewable power assets require specialist monitoring and control to ensure the stability of the grid and the most effective use of their distributed capacity. The best way to achieve this is to connect them all using IoT, so data about their status is always visible across the energy ecosystem.

Vodafone is partnering with Energy Web, a non-profit organisation, whose mission is to accelerate the decarbonisation of the grid. IoT allows the distributed assets of energy networks to be reliably and securely connected, helping to improve the efficiency of production and reduce the impact of energy production on our planet.

IoT is playing a key role in sustainable supply chains

As well as taking advantage of new energy sources, technology can help businesses to create robust and sustainable supply chains.

For example, using IoT, a business can now monitor operations in real time and capture information about energy consumption throughout the supply chain — from manufacturing sites to warehouses and retail outlets — to gain new insight about its environmental impact. Smart analytics and AI can then be used to highlight opportunities to improve operations and plan a more efficient future.

Spanning 200 hectares, the Emilio Moro Tempranillo vineyards are among Spain’s finest and require the exacting care and attention necessary to achieve such a reputation. The winery’s use of narrowband IoT technology with satellite imagery and climatic sensor stations is allowing the grape farmers to use troves of precise data to manage their crops more effectively. Specific, geolocated data on solar efficiency, fertilizer demand, disease detection and more give the team at Emilio Moro unprecedented insights into the health and wellbeing of their valuable crops.

This application of narrowband IoT technology and big data analytics has helped the vineyard maximise the quality of its output – and maintain a decades-long dedication to innovating on dearly maintained winemaking traditions.

Efficient last-mile delivery

Our research confirms that almost three-quarters (72%) of consumers are becoming more demanding in terms of ethical behaviour and are requiring brands to serve a wider purpose than their core business.

Over a third of companies also say that sustainability objectives make recruitment and retention of employees easier.

To achieve this, businesses are looking at ways of making the delivery process more ethical. Whether that’s through local sourcing, ethical sourcing or electric vehicles.

Considering ethical packaging

Another thing businesses are tackling is ethical packaging.

While it was once something that only a handful of dedicated eco-pioneers produced, it’s now firmly mainstream.

Consumers not only want to use less packaging, but they also want the option to reuse, recycle or dispose of it in an environmentally friendly way (i.e. compostable). As such, using 100% recycled or raw materials for packaging, for example, and creating a circular economy around these materials can add to the sustainable brand image. For many businesses, this could be working with suppliers to use ethical packaging — even if it costs more.

There are financial incentives as well. While ethical packaging may cost more in the short term, it’s a major plus for brand recognition and sentiment.

People want to buy from ethical businesses and those that can prove they have sustainable options in place will attract and retain more customers.

Halving wasted food

Capturing and sharing information throughout the supply chain is also helping companies to address one of the biggest global concerns: food wastage.

Not only is an estimated one-third of all food lost or wasted worldwide according to the UN, but this loss adds up to $940 billion per year.

A fact that may surprise many is that this food loss and waste generates about 8% of global greenhouse gas emissions.

Estimates indicate that if it were a country, food loss and waste would be the third-largest greenhouse gas emitter behind China and the United States – which is one of the reasons the UN has pledged to halve food waste by 2030.

Food wastage in transit is one area that is being tackled through digital technologies.
The use of IoT temperature and humidity sensors within the cold chain is helping to ensure items are kept in the correct conditions throughout the process – from manufacture to distribution and finally to the retailer or customer.

Data provided by these sensors is collected, stored and analysed in the cloud, enabling remote management of equipment to maintain the environment.

Fleet telematics solutions can also be used in real-time to reorganise delivery schedules to avoid wastage should a delay occur.

Farming is another great example of a rural industry that’s already benefiting hugely from IoT and cloud technology.

In Ireland, companies such as AllTech are connecting farms to improve feed efficiency and ultimately produce more and better quality milk and beef. They now have smart farms that digitalise and optimise production processes, contributing to a more sustainable future.

These are just a few areas of innovation within the supply chain that are supporting environmental goals.

Learn more about creating a sustainable supply chain in our guide.

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