Processes underpin everything a company does, from product conception to production, distribution and fulfilment. By making them more efficient, we can make the world more sustainable. But many of these processes have been developed in a piecemeal fashion, so they are incredibly inefficient. One third of all food produced globally, for example, is lost or wasted every year, and 80 per cent of that waste is caused by poorly executed processes such as supply chain inefficiencies, late deliveries and inaccurate planning. This food waste matters beyond simple nutrition. According to the United Nations Environment Programme, the resources needed to produce the food that then becomes lost or wasted has a carbon footprint of about 3.3 billion tonnes of CO2, making food waste the world’s third-biggest carbon emitter behind China and the United States.
Many organisational processes, such as customer relationship management, enterprise resource planning and spreadsheets that crunch data in real time, now run in the cloud. Instead of becoming more efficient, these fragmented systems often don’t speak to one another, causing massive blind spots that can have far-reaching consequences. Imagine you’re responsible for shipping life-saving penicillin to South American hospitals, and orders are late or incorrect 40 per cent of the time. How much investigation would be required to get to the root cause of the problem, let alone fix it? Companies’ technology stacks enable them to analyse data and act on insights, but the gap between uncovering an insight and acting is usually too large.
This is particularly critical for industries with large supply chains. A report produced this year by the World Economic Forum shows that eight global supply-chain inefficiencies account for more than 50 per cent of all carbon emissions, with food alone representing about 25 per cent.
In 2022, companies will see the advantages to be gained by streamlining supply chains through better use of data. Procurement will be a good place to start. In 2022 companies will use data to influence their suppliers to be more sustainable. And they will extend that use of data into every decision, using it, for example, to look for corruption or evidence of forced labour in supply chains.
As part of its sustainability strategy, Lufthansa CityLine, which operates flights out of Frankfurt and Munich, has explored with my startup the continuous analysis of its fuel-ordering process to help improve decision-making and reduce fuel consumption. EcoVadis, which rates more than 75,000 companies on its corporate social responsibility and sustainable procurement policies, has found that business sustainability ratings average in the mid-40s out of 100, with procurement particularly lagging behind. It is working with these departments so they can influence their suppliers to be more sustainable. In 2022, we will see this sort of environmental, social and corporate governance data natively available in every decision.
In 2022, companies will be increasingly differentiated by how sustainable they are. Many more of them will realise that it is through streamlining their processes that they can achieve greater efficiency, greater sustainability and emit less carbon into the atmosphere.
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This article was originally published by WIRED UK
