How the cloud can make supply chains greener
Aside from net-zero datacentres, cloud computing can do more to tackle climate change by addressing emissions created along global supply chains
Greening of the cloud is happening at pace, shifting computing en masse to remote datacentres powered by renewables. However, energy consumption is just one part of the picture. In the lead up to COP26, the United Nations Climate Change Conference, later this year in Glasgow, attention is being directed at the cloud’s ability to drive greater sustainability in supply chains.
The focus is on data and lots of it. When it’s organised and analysed on the cloud, via a single, uniform platform, organisations can start to reconfigure how they do business in a more environmentally friendly way. This can be achieved by driving efficiencies, fine-tuning logistics and transport routes, as well as by using natural resources.
“Sustainable supply chains aren’t driven by technology, they’re enabled by technology,” explains Mark Griffiths, global head of climate business at WWF. “Cloud-based technologies enable near real-time visibility, as well as greater accountability.”
The World Wide Fund for Nature isn’t the only organisation involved. Unilever has teamed up with Google Cloud to fight deforestation and source sustainable commodities, particularly palm oil. The idea is to connect satellite images of forested and deforested areas with data on suppliers, to make sure Unilever is buying products from reputable partners. The cloud acts as the ultimate ledger for such activity.
“Transparency, data analytics and better decision-making is the cloud’s unique selling point when it comes to sustainability,” says Vishal Patel, vice president at Ivalua, a procurement software provider.
“Then there’s the ability to monitor and track suppliers. Procurement can help drive green initiatives by selecting and rewarding companies for sustainable practices. This is done by validating environmental impact data from suppliers and tracking them against sustainability goals. Cloud-based procurement tools can certainly help identify these opportunities.”
Data and supply chain visibility are stumbling blocks
The cloud as a force for green good in the lead up to the biggest climate summit since the Paris Agreement sounds remarkable, but there are challenges. Data and visibility along supply chains is notoriously difficult to achieve if they stretch between Glasgow, Gurugram and Guangzhou, involving many data silos and tiers of suppliers, who now have to adopt cloud solutions. There’s a lot of inertia.
“Climate change is a big challenge for organisations, with effects that are far reaching, but addressing these is a long-term and more iterative process, so investment usually takes longer to prove its worth. It can be difficult for such investments to gain buy-in,” says David Basson, UK manufacturing lead at Fujitsu.
Cloud is more likely to be deployed as a supply chain solution because it creates efficiencies, reduces lead times and allows companies to respond, adapt and act faster, saving them money and time. Some of these wins could be future sustainability wins too.
“The cloud helps companies build a common infrastructure. Once supply chain partners adopt this, it gives them the foundation to evolve and adapt to any new challenge; this includes climate change,” Dan Martines, managing director at BCG Platinion, points out.
Cloud also provides an agile, just-in-time, elastic environment that is easy to configure for supply chains. It’s cheaper to build, with recognised standards and off-the-shelf tools as well as data services. This is likely to drive its adoption when it comes to sustainability.
“Arguably you could deliver the same systems out of the cloud to trace upstream and downstream value chains for sustainability. The challenge is the complexity of doing this,” says Grant Caley, chief technology officer (CTO) for UK and Ireland at NetApp.
“For instance, data from operational technologies can be combined with transportation internet of things sensor information and then cleaned with data services in the cloud, before running this against artificial intelligence (AI) models. This is then used as the basis to build cloud-based value-chain applications. The cloud makes all this a lot easier, more cost effective and accessible.”
Another driver will be government procurement, as adoption of cloud-based solutions that drive sustainability are being championed by the public sector, which is increasingly aware of emissions and the race to net zero. The cloud offers transparency and accountability when it comes to the public purse.
“Government requires sustainability and corporate social responsibility (CSR) issues to be addressed as part of procurement. This is happening in local government where up to 5 per cent of an evaluation could be assigned to this. We regularly see the CSR aspect of bids given equal weighting to technical functionality. The result is that it has become a core part of any offer,” says Nick Cobley, managing director of cloud at Agilisys.
New cloud-based tools deliver change
The cloud can be leveraged to generate sustainable supply chains in many industries, yet some represent more opportunities than others, such as manufacturing, retail and energy. There are also easy gains within sectors such as greener logistics. This has come to light during COVID lockdowns.
“Retailers have been collaborating with each other and acting more intelligently over the last mile, cutting their emissions as well as delivery costs and fulfilment processes. Without the flexibility the cloud offers, they would not be able to re-engineer their supply chains quickly enough to take advantage of this kind of opportunity,” says Matt Waldbusser, global field CTO at Blue Yonder.
AI and machine learning can also assist in generating more sustainable supply chains, since these technologies can be articulated on the cloud more easily, joining the data dots and providing new levels of insight, such as reducing overstocking or solving complex logistical issues.
“Amazon is a good example. It’s not surprising that an organisation with such strong cloud pedigree is connecting customers in-store directly into the supply chain through sensors, AI and the cloud. In the process they can make the entire supply chain more efficient and so more sustainable,” Alex Guillen, technology strategist at Insight, explains.
There are also new cloud-based tools that are assisting the sustainability drive. Virtual digital twins are becoming more common. This allows companies to model, simulate and analyse more environmentally friendly concepts and hypotheses in the virtual world. Then apply them in real life.
“You can use a virtual twin to create an entire supply chain. The pharmaceutical and energy industries are now deploying this approach to offer more accurate data across their supply chains and reduce their carbon emissions and waste,” says John Kitchingman, managing director, EuroNorth, at Dassault Systèmes.
So what of the future? More cloud-based data will enable supply chains to be reconfigured. The hope is we will transition to a circular economy, moving away from a take, make, dispose linear model. That involves an ecosystem of partners, recalibrating how they interact, which is easier on the cloud.
“This will be a destination for sustainable supply chains, where no net waste occurs in the produce and consume cycle. At the moment it’s being pushed in Europe and Japan, but its principles will soon be introduced in the United States,” says Dr Raj Agnihotri at IBM’s Global Supply Chain Center of Competence.
Certainly, the cloud now offers a window onto the art of the possible. “We are only limited by our imagination, prioritisation and drive to leverage the cloud in meaningful ways to help address our climate crisis,” Aaron Oser, leader of global sourcing at Pillsbury Law, sums up.