3 high-value ways to accelerate your journey to supply chain sustainability

Today, consumers want to know where their coffee was sourced and where their diamonds were mined. In fact, more than 70% of consumers indicate that traceability is very important and are willing to pay up to a 35% premium. Governments and investors are holding companies accountable for sustainable supply chain practices too, with Blackrock, the largest investment management company worldwide, asserting it will put sustainability at the center of its investment approach.

Although many people think sustainability programs cut into profitability, research shows otherwise. Numerous reports cite a direct correlation between sustainable practices, share prices and business performance.

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Supply chain leaders are stepping up to the challenge. Now, 49% of all companies have supply chain sustainability goals and 70% are planning to invest in circular economies in the next 18 months. With the rush to Net-Zero, carbon neutrality and energy management are top of mind. However, there are opportunities everywhere along the end-to-end supply chain to embed best practices to drive sustainability and help enable circular economies that reduce waste and encourage reuse.

Reaching supply chain sustainability goals requires a global, accurate, real-time view of inventory and the ability to share data across your supply chain ecosystem in a trusted way. But the truth is, all too often supply chain leaders operate in the dark. When you don’t know exactly how much inventory you have and where it is, you over order and have too much working capital tied up in inventory to avoid stockouts. This creates a ripple effect, generating waste in other areas, like warehousing and logistics. And if you lack transparency and data sharing with your deep-tier suppliers, it’s incredibly difficult to track product provenance – from point of origination to delivery – in a trusted and controlled way to identify supplier risk and protect your brand.

Fortunately, technology can help you overcome the visibility and data sharing challenges and enhance your existing supply chain processes to create a sustainable and profitable path forward. Here are three high-value places to focus first.

1. Inventory management

In asset-intensive markets such as oil and gas, mining, utilities, petrochemical, and industrial, companies are optimizing maintenance, repair and operations (MRO) inventory to ensure they have never too much and always enough. Through right-sizing inventory levels they can also achieve a quick and meaningful boost to their sustainability efforts. With IBM Maximo MRO Inventory Optimization, you can make more informed decisions to optimize MRO inventories, increase service levels and minimize unplanned downtime, while freeing up working capital to spend in other strategic areas. You can also help reduce your organization’s carbon footprint as you use excess inventory and reduce warehouse space. An accurate, granular view of MRO inventory performance and optimized recommendations for inventory and reorder levels for each stock item, further cuts waste and environmental impact by reducing dead inventory and the need for emergency shipments.

With IBM Maximo MRO Inventory Optimization, a U.S. utility achieved net improvement in MRO inventory costs of $25 million and brought their 10% inventory growth rate down to zero.

In more consumer-focused sectors like retail, global real-time inventory visibility can make the difference between delighting or losing a customer. IBM Inventory Visibility easily connects to existing systems, so you can check stock across multiple locations and get up-to-the-minute views on what’s available nearby or in transit. Customized alerts and thresholds for your business allow you to fill demand and design out waste by reducing safety stock, markdowns, carrying costs and optimizing physical store and distribution facilities footprints.

2. Fulfillment optimization

Leading retailers and brands – B2C and B2B – are hyper-focused on omnichannel order fulfillment today to give customers the right products at the right time and place. The opportunity also exists to do this in a greener way. IBM Sterling Fulfillment Optimizer with Watson enhances and extends existing order management systems, so you can purposely source inventory that’s closer to the customer to reduce your carbon footprint. You can optimize fulfillment at the lowest cost to serve and reduce logistics-related emissions due to often expensive and unnecessary shipments.

3. Product provenance

From coffee to seafood, batteries to wine, companies that take sustainability seriously work to ensure raw materials are responsibly sourced and products maintain their quality and integrity as they travel through the value chain. With IBM Blockchain Transparent Supply you can build a viable and sustainable ecosystem of partners, designing business and governance models that reflect shared values. Sharing data through an immutable, distributed and shared ledger, you can transact with supply chain partners in a more trusted and efficient way to ensure provenance and quality, reduce product waste and increase profitability. You can provide transparency to today’s purpose-driven consumers by helping them purchase in alignment with their values – and deepen engagement by allowing them to directly engage in sustainability initiatives.

Farmer Connect is using IBM Blockchain Transparent Supply to provide traceability to ensure that coffee is sourced in a sustainable way and even show consumers the journey their coffee has made and allow them to leverage the platform to direct a donation to a sustainability initiative in the farmer’s community.

IBM has dedicated experts with deep domain and industry expertise to help you develop and implement the right strategies, operating models, intelligent workflows and technology innovation to achieve your sustainability goals. Wherever you are on your supply chain sustainability journey, IBM can help.

Source: ibm.com

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5 retail supply chain insights from NRF 2021

Did you miss “Chapter One” of the National Retail Federation’s (NRF’s) Big Show event in January? Wondering what valuable supply chain insights you might’ve missed from IBM retail clients and experts? We’ve got you covered with the top five supply chain insights from this year’s virtual event.

1. Supply chain resilience starts with end-to-end visibility

Moving into 2021, supply chain resilience is a top priority for most retailers. To optimize operations in good times and maintain business continuity during disruption, supply chain leaders need real-time, actionable insights. But supplier complexity, siloed systems, batch ERP data, and error-prone, manual processes can make it difficult to even see current and complete data – let alone analyze it in time to make better supply chain decisions.

Golden State Foods (GSF) is tackling visibility and transparency challenges using a combination of AI, IoT and blockchain to preserve the quality of products the company delivers to quick-serve restaurants and stores worldwide. In our first Big Ideas speaking session, Bob Wolpert, Chief Innovation & Strategy Officer for GSF, shared how they’re gaining visibility into data from IoT sensors in refrigeration trucks and applying AI to reveal trends and patterns. This allows them to monitor compliance with temperature ranges, address points of weakness, and ensure higher product quality with less waste. Blockchain drives additional value by enabling GSF to track product movement in real-time with trust and transparency, so they can adjust replenishment cycles, shift goods to different locations, and alter production based on demand patterns. “If you have the data and you can see it to act quickly, that’s a game changer for your supply chain,” said Bob.

2. Omnichannel fulfillment keeps customer needs front and center

Retailers never could have imagined the turbulence of last year when their doors were forced to close, at least temporarily. Flexible fulfillment options like curbside pickup were the key to meeting customer needs for essential retailers, like grocers, and keeping inventory moving for others. Even in the face of added complexity, some retailers were able to pivot more quickly and easily because they had the right order management system (OMS) in place.

For example, Sally Beauty serves both consumers and businesses and experienced different demand shifts depending on the customer base. Consumers were moving to DIY hair color and nail treatments, while salons were closing. In another Big Ideas session, Sally Beauty explained how they regrouped and reopened by implementing new omnichannel capabilities in three short weeks. With IBM’s SaaS-based OMS, they were able to scale quickly and manage peak demand, which was essential considering they re-emerged into an environment that was the equivalent of Black Friday times 10. They expanded ship-from-store and same-day delivery capabilities, and soon added buy online, pickup in store (BOPIS). “All of this is with the intent to remove customer friction and thinking customer first. If it doesn’t impact the customer, we’re not going to spend time on it,” said Joe Condomina, CTO, Sally Beauty.

3. When you empower the customer, you empower the industry

Consumers want to make more informed decisions about the food they buy and the brands they support. Research shows 65% of consumers want to know more about how food is produced. Providing this information builds trust and competitive advantage. But what does this mean for supply chain leaders?

The National Chamber of Aquaculture of Ecuador, through its Sustainable Shrimp Partnership (SSP), has realized the answer is education enabled through blockchain. Many consumers don’t know the origin of the shrimp they eat and the practices behind the product. The SSP leads the way in sustainable practices that have personal health and environmental benefits, but they needed to be able to capture and share that information to empower customers and the shrimp industry. In our final Big Ideas session, Jose Antonio Camposano, Executive President, National Chamber of Aquaculture of Ecuador, SSP, explained how by shifting the industry from manual processes and excel spreadsheets to a blockchain-based platform, all parties can track and trace shrimp from the hatchery, to the farm, to processing facilities and export operations. “For the first time, the consumer will be the one with the power to go back to the company and ask them directly for the information they are interested in,” said Jose. Consumers – chefs, nutritionists and home cooks – can scan a QR code to get information like antibiotic usage and farming impact on ecosystems to help make better decisions. And the industry gains long term sustainability, differentiation and growth opportunities.

4. Building trust and transparency is a team sport

Supply chains are no longer linear, but more dynamic in many industries. They are networks of networks with parties sometimes changing roles to play different positions on the team. During the pandemic, some channel distributors holding a lot of inventory became suppliers, and retail stores forced to close their doors became distribution centers. With shifting relationships and rising customer expectations, trust has come to the forefront – especially with trust in vaccines top of mind right now – but trust in food and fashion has been a top concern for years.

In an interactive session co-led by Jason Kelley, General Manager, IBM Blockchain Services, and Karim Giscombe, president and founder, Plant AG, participants discussed how trust is established with data. In non-linear supply chains, that data must be shared in a distributed model. Adding blockchain technology to a multi-enterprise business network allows for this, providing permissioned access to trusted data across the supply chain. Karim explained how Plant AG is addressing the massive disconnect between food producers and consumers. Working with IBM, Plant AG is using blockchain to create data connectivity and a single source of truth along the food supply chain, from point of origin to point of consumption and all parties in between.

5. Weather insights help mitigate the impact of climate change on the supply chain

Finally, in an interactive session with John Bosse, Offering Manager for AI Applications, IBM, participants discussed how to identify and manage the effect of climate challenges within supply chains and retail operations. Today, climate change is disrupting the operating model of all businesses in myriad ways, and brands must understand how to turn negatives into positives. Consumers are willing to align their shopping habits to support their values of sustainability and healthy lifestyles, making it more important than ever for retailers to consider their environmental impact. In addition to doing right by the planet, companies that plan with climate change in mind can secure an 18% higher return on investment than companies that do not. With weather insights, companies are increasing food production on existing farmland to avoid deforestation and responsibly feed a growing population, enabling sustainable oil palm production, and increasing crop yields and quality while reducing water use. Additionally, retailers are reducing greenhouse gas emissions around their supply chain logistics and better predicting the impact weather has on consumer demands.

Source: ibm.com

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Flexible payment model enables more companies to digitize and automate supplier transactions

Recent global events have convinced companies with complex, global supply chains and multiple tiers of suppliers that they need a better way to engage with trading partners. Eliminating manual processes is a critical step on the path to more efficient supplier onboarding and collaboration. But after decades of trying, over 66% of companies still use email, phone, fax and postal mail for B2B transactions with at least 30% of their trading partners.

To overcome the technical challenges of digitizing and automating B2B transactions with suppliers – including suppliers that lack the technology and expertise to support EDI transactions – companies have implemented solutions like IBM Sterling Supplier Transaction Manager. Users can create or exchange business documents easily through a web portal, and the solution converts the documents into a format each party can view and use without manual intervention.

While companies and their suppliers can see great benefits in an electronic alternative to paper-based communications, some need a way to share the investment of eliminating costly, manual processes. To help, IBM is launching a spoke-pay payment model as an alternative payment option.

Traditionally, the investment to eliminate manual, error-prone processes has been absorbed entirely by the sponsor of the trading partner network. While this model works for some companies, it may not for others. Suppliers also gain business value from digitization and automation as they benefit from better data quality, faster time to revenue, and additional business opportunities as a result of being easier to work with –but  are not sharing in the costs..

IBM’s new spoke-pay option enables companies to share costs with their suppliers. The sponsor invites the supplier to sign up and accept payment terms for their participation in the trading partner network. The supplier can register, pay and access the network through a web portal in a matter of minutes.

By reducing the technical and financial barriers to digitizing and automating B2B transactions, companies and their suppliers eliminate the pain of manual transactions and make leaps forward in supply chain efficiency.

To help companies get started, we are offering eligible organizations special discounts on Sterling Transaction Manager.

Schedule a consultation to explore how your business can benefit from Sterling Transaction Manager and the payment model options.

Source: ibm.com

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