Supply chain visibility – a critical problem-solving component

What are sustainability and resilience all about?

Supply chain sustainability has to do with more than reducing carbon emissions or using less packaging. Sustainable supply chains are set up for the long-term. They are planned realistically, well established and scalable with regards to their footprints, technology and processes. Resilience is a measurement of a supply chain’s ability to withstand disruptions.

Sustainability and resilience, sometimes grouped together as supply chain viability, determine a supply chain’s capability to still deliver in the future, despite the many risks that affect operations – which include both environmental risks like floods or droughts and other risks that go along with a quickly changing world, such as government regulations, wars and conflicts, or shortages.

Though sustainability and resilience are part of many long-term supply chain strategies, businesses can start seeing immediate benefits. The energy and commodity crisis, originally brought on by the Covid-19 pandemic and now intensified by the war in Ukraine, is an example of this two-fold trend. With the energy and materials shortage in Europe, resilient supply chains have been at an advantage, as they can switch to low-energy modes of transportation and procure materials from local sources. This enables cost savings and ensures viability – while taking a step towards environmentally sustainable operations.

Where did the sustainability and resilience trend come from?

“Sustainability” formed as a supply chain megatrend in 2015 at the latest, along with the signing of the Paris Convention, as the global community committed to specific measures to counteract the climate crisis. In the same year, the Sustainable Development Goals were set up by the UN General Assembly.

While pre-pandemic, the search term “VUCA” (volatility, uncertainty, complexity, ambiguity) concerned supply chain managers amidst trade wars, “supply chain resilience” gained traction during the pandemic. This time period witnessed disruptive developments like the semi-conductor shortage, rising container rates and delayed port operations. The relatedness of sustainability and resilience has recently been acknowledged and integrated in academia with the term “supply chain viability”.