Building a Sustainable Supply Chain: Transforming it into a Competitive Business Edge

In an exclusive interview with Asia Business Outlook, Ankur Sharma, Head of Supply Chain at Roquette, shares his expert insights on sustainable supply chain management. With 15 years of experience in the FMCG, Food, and Consumer Healthcare Industry, Ankur is a seasoned supply chain leader known for his versatility and result-oriented approach. He has a proven track record of working with multi-national, multi-cultural, and cross-functional teams to build competitive and differentiated supply chains. In this interview, Ankur discusses how companies can integrate sustainable practices into their supply chains, leverage technology to reduce waste and enhance sustainability, and implement strategies to optimize resources for a more sustainable future.

Sustainability is becoming a core component of modern supply chains. How can companies integrate sustainable practices into their supply chains to enhance their competitive edge?

To integrate sustainability into their supply chain and enhance their competitive edge, companies should start by embedding sustainability into their overall strategy and goals, with top-level commitment. This involves aligning with the Science-Based Targets initiative (SBTi) methodology to set greenhouse gas emission reduction targets that align with global climate goals.

Companies should identify gaps in their current practices and map their entire supply chain, both upstream and downstream, to understand where they can make the most significant impact. This includes understanding their Scope 1 (direct) emissions, Scope 2 (indirect) emissions from energy purchases, and Scope 3 (indirect) emissions from the entire value chain, including suppliers, transportation, and end-of-life product impacts.

Understanding and addressing all three scopes, companies can comprehensively reduce their environmental footprint. Implementing sustainable practices such as using sustainable materials, adopting clean labels, switching to biofuels or natural gas, and optimizing transportation modes can help companies reduce their Scope 1 and 2 emissions. Additionally, engaging with suppliers and partners to implement sustainable practices can help reduce Scope 3 emissions.

By leveraging sustainable practices, companies can reduce emissions, mitigate climate risk, and enhance their reputation. This approach also meets customer demands, drives long-term growth and profitability, and benefits the environment. Integrating sustainable practices into their supply chain enables companies to reduce their environmental impact, mitigate climate risk, and gain a competitive edge in the market.

Technological advancements can play a significant role in sustainable supply chains. How can businesses leverage technology to reduce waste, and enhance sustainability?

Technological advancements are crucial in today's rapidly changing industry. Data and tools can help humans predict what's coming next, and that's where predictive analytics plays a significant role. By forecasting demands and generating point-of-sales data, predictive analytics can optimize production planning, impacting factory operations and leading to immense optimization in energy costs, changeovers, and fuel use. This helps reduce overproduction and waste.

Technology also offers significant advantages in transportation, such as network design and artificial intelligence, which can optimize routes, reduce kilometers traveled, and determine the most efficient serving points. Additionally, technology can streamline procurement practices by providing online platforms that reduce intermediaries, complexity, and waste, enabling direct dealings with suppliers.

Furthermore, technology can optimize operations and material efficiencies by providing real-time data on energy consumption, enabling corrective actions to minimize overrunning and optimize operations. Overall, technology brings visibility and enables proactive actions to trigger sustainable practices, reduce waste, and enhance sustainability in supply chains.

Maximizing resource efficiency is key to sustainability. What strategies can companies use to optimize resource use throughout their supply chain?

To optimize resource use throughout their supply chain, companies must first map their existing practices to identify areas for improvement. This involves conducting a thorough gap assessment to determine what's needed to reach a sustainable supply chain. It's essential to recognize that sustainability is an ongoing process, with continuous goals to be achieved over time.

Transitioning to renewable energies like biofuels is crucial, reducing dependence on coal and fossil fuels. Logistics play a significant role, and companies must optimize transportation routes and reduce distances using technology and network design. Exploring alternative modes of transportation, such as rail, can also help reduce carbon emissions.

Packaging is another critical area, and companies must assess their materials for degradability, biodegradability, and recyclability. Considering bulk supplies can also reduce packaging waste.

By taking a holistic approach to resource optimization, companies can minimize waste, maximize efficiency, and contribute to a more sustainable supply chain. This requires ongoing commitment and continuous improvement, but the benefits to the environment and the bottom line make it a worthwhile investment.

What are the benefits of improving transparency and traceability in the supply chain, and how can companies implement systems to achieve this?

Improving transparency and traceability in the supply chain offers numerous benefits. Firstly, it builds trust with customers, increasing brand value and loyalty. By adopting sustainable practices, companies can reduce the risk of non-compliance with industry or government regulations. Sustainable practices also lead to better quality management systems, enabling easier tracing of materials in case of issues.

For instance, one of the biggest food company faced a crisis due to excessive lead content, but their transparent and traceable supply chain helped them identify the source and take corrective action. This highlights the importance of end-to-end visibility in facilitating better decision-making.

Implementing systems for transparency and traceability can be achieved through:Technology adoption, such as blockchain or IoT sensors, to track materials and products throughout the supply chain.Supplier engagement and collaboration to ensure compliance with sustainable practices.Regular auditing and monitoring to identify areas for improvement.Investing in data analytics to gain insights into supply chain operations.By prioritizing transparency and traceability, companies can enhance their reputation, reduce risks, and improve overall quality management.