How businesses are pursuing Sustainability in Supply Chain
The whole world is now making a global effort to reduce the rate of climate change and limit temperature increase to below 1.5 degrees centigrade. This goal was set by the Paris Agreement meaning that within the next 10 years, emissions need to reduce by 45%.
For many companies, sustainability has been part of mission statements for many years. Meaning that at many points of the supply chain they: reduce energy usage, recycle renewable resources and reduce emissions. All of these efforts make for a huge shift in companies economic and social motives, demonstrating that they can still produce their products and services without creating environmental damage.
Not only do environmental factors affect the sustainability of the supply chain but ethical factors like promoting human rights, fair labour practices and anti-corruption policies. ranks companies' supply chain practises as “the biggest challenge to improving their sustainability performance”. The complexity and scale of some supply chains make implementing the Un Global Compact’s Ten Principles a challenging task and involves detailed supply chain management.
Most large companies are taking matters into their own hands, for example online fashion retail platform has committed to carbon neutrality across its supply chain. They’ve stated that they will commit to having 90% of its key suppliers set to their own science-based targets and are the first retailer to use the Higg Brand & Retail Module from the Sustainable Apparel Coalition. Meaning that it will make sustainability assessments completely mandatory for any label and partner that Zalando sells on its platform.
It is not only retail platforms that are making this leap forward, in 2019, received the highest possible level of supply chain management to reduce greenhouse gas emissions. The certification comes from the Carbon Trust Standard for Supply Chain and they received a Level 3. This is awarded to companies who demonstrate a targeted year-on-year approach to reduce specified parts of their supply chain. O2 achieved this through contractual agreements with suppliers to enrol in carbon reduction programmes. These suppliers represent almost 21% of O2’s supply chain emissions.
Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.