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SUPPLY CHAIN PLANNING PLAN YOURSUSTAINABILITYJOURNEY
Carlijn Goedhart, Sustainability Lead at DELMIA, takes a closer look at the dynamics of sustainable supply chain planning and the impact it can have on world resources and emissions
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upply chain planning has huge potential to reduce the environmental impact of production and
transportation, and supply chain solutions play a pivotal role in making this happen. Better supply chain planning has a beneficial effect on sustainability targets such as the use of energy, raw materials, and the emission of CO2. According to Wikipedia, “sustainability is a
societal goal that relates to the ability of people to safely co-exist on Earth over a long time.” This means we need to carefully plan our usage of scarce resources: the use of land and water to grow food; the use of space to live and work, the use of clean flowing water to clean or dispose; the use of fossil fuels to drive our cars, fly our planes and to generate electrical power. It’s all about managing the Earth’s scarce resources so future generations can enjoy life on our planet with the same quality as we can. Many of Earth’s scarce resources are
consumed by industrial processes and transport – which are the building blocks of today’s supply chains. According to the IPCC, about one-third of the global CO2 emissions are linked to industry, and 15% to transport – together this is almost half of the total CO2 emissions. The emissions generated can be greatly influenced by the way supply chains are planned. For example, a route that is optimised such that a truck needs less travelled distance to deliver the same number of packages, or a production system that saves energy by more efficient batching of products in furnaces. Therefore, supply chain planning has the potential to reduce the environmental impact of production and transportation, and the likes of DELMIA Supply Chain Solutions play a pivotal role in making this happen. Four levels of maturity: Level 1: Sustainability as a spin-off from
32 OCTOBER 2023 | PROCESS & CONTROL
supply chain improvement. The good news is that in many cases, better
supply chain planning has a beneficial effect on sustainability targets. Such projects usually aim for increasing supply chain effectiveness, like delivery reliability and improving efficiency—often achieved by reducing stocks, production costs, and raw material usage. There are many links between supply chain
planning and sustainability goals, as illustrated by the following examples: - The process of Sales & Operations
Planning (S&OP) aims to align demand and supply for the complete supply chain. This means that decisions are made about when and where to produce what products in the most efficient way. - The process of Master Production
Scheduling (MPS) allows for choosing the resources that can produce in an energy- efficient manner when a choice is available. It can also ensure that perishable products are processed on time to avoid waste - The process of Production Scheduling can
be used to avoid setup or cleaning between different products, to save energy and cleaning liquid -The process of Logistics Planning enables
companies to optimise routes and the loading of transportation (e.g. trucks). Level 2: Measure sustainability KPIs “To measure is to know,” and “If you cannot
measure it, you cannot improve it” are the words of Lord Kelvin. Improving sustainability of a process starts by quantifying and measuring indicators, for example the amount of CO2 emitted. Over 10 years ago, a producer of candy bars decided to print a transport’s CO2 emission on the packing slip, to make customers and suppliers more aware of the environmental impact. Although this initiative is welcomed, making
a figure available by itself will not enforce any change in decision-making. Similarly, a key
performance indicator (KPI), showing CO2 emissions on the screen of a planner, does not guarantee that the planner will actually try to influence this in a positive way when the management is only interested in efficiency and timeliness of production. Hence, making the sustainability KPIs available is necessary, but not sufficient. Level 3: Involve sustainability KPIs in
trade-offs As the examples in the first level illustrate, it
often happens that companies get some sustainability effect ‘for free’ when focusing on ‘traditional’ supply chain planning objectives. However, in other cases, trade-offs need to be made between the objectives, which makes the puzzle harder to solve. This is where supply chain solutions planning engines will help. Using sustainability KPIs that are added to the optimiser, it is possible to trade-off against traditional KPI’s – such as delivery reliability or stock targets. It might mean that in some cases, a somewhat higher purchase price is accepted to save CO2 emissions. Level 4: Set sustainability targets using
standards In sustainability efforts, it is often not clear
what the objective should be. Should we sacrifice 10% of delivery reliability to avoid energy waste in the production process, or should we accept any deterioration for this objective, or should we stop producing specific products completely? Becoming 100% sustainable is a utopia:
sustainability is a journey rather than a destination. Nevertheless, Supply Chain Planning and Optimisation can make a huge difference in reducing the environmental impact of companies’ manufacturing and transportation operations.
DELMIA
www.3ds.com/products/delmia
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