Supply chain execs increase focus on sustainability, says Ernst & Young survey

Supply chain executives are focusing more on sustainability but are lacking the end-to-end supply chain visibility to meet their objectives, according to an Ernst & Young (EY) report.

According to the EY 2022 Supply Chain Sustainability Report, 80% of senior supply chain executives are increasing their emphasis on environmental, social and governance (ESG), but 35% are lacking a business case. Half of the 525 senior supply chain executives at large enterprises don't have an integrated scorecard to measure supply chain sustainability KPIs, according to EY.

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EY recommended that supply chain leaders need to estimate supply chain sustainability gaps, improve visibility with technology and data sharing, expand business cases, prioritize and leverage tax incentives.

Celonis customers are currently linking sustainability and supply chain initiatives and the overarching recommendation is to just get started so you can continually iterate on processes. For instance, ALDI SÜD aimed to reduce transportation costs along with CO2 emissions. ABB has a project focusing on outbound logistics for customer shipments and calculating emissions across modes of transport.

Why optimizing truck pickup, delivery processes are so important | See Webinar: Are Your Processes Keeping You From Filling Your Trucks On Time? Supply chain sustainability initiatives are being accelerated by a bevy of challenges including disruptions, inflation and compliance as the US Securities and Exchange Commission may require climate disclosures. "Our research shows that 63% of companies are accelerating the use of technologies for sustainability tracking and measurement," said EY.

EY's report indicated that 61% of supply chain leaders are focusing on sustainability for cost savings. Fifty-eight percent of supply chain executives are prioritizing end-to-end visibility with 47% focusing on resilience. The findings echo a recent report from Gartner on supply chain priorities.

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EY noted in its report:

Supply chain strategies call for visibility across a broad network of space and time — past, present and future. Without abundant transparency, mapping and traceability, supply chain executives can’t gauge the early warning signs of trouble, improve long-term value or plan for the ripple effects if a disruption were to occur.

Our survey results show increasing visibility throughout the supply chain is the top priority for supply chain executives through 2024. While visibility is a wide undertaking, a holistic end-to-end view of the supply chain helps companies prepare for changes in demand, monitor disruptions — and even better, to predict and avoid them.

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Part of that visibility will include supplier ratings and sustainable procurement practices. According to the EY survey, supply chain executives are also betting on autonomous supply chains that incorporate sustainable practices. The EY 2022 survey found that 45% of supply chains are expected to be mostly autonomous by 2035.

Larry Dignan

Editor in Chief (former)

Larry Dignan is the former Editor in Chief of Celonis Media. Before joining Celonis, he was Editor in Chief of ZDNet and has covered the technology industry and transformation trends for more than two decades, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine.