Greening Global Supply Chains via Digital Transformation

It is imperative to green global supply chains through digital transformation to curb their carbon trail
Greening Global Supply Chains via Digital Transformation

As climate change consequences accelerate across geographies, the role of sustainability in individual, institutional and industrial operations is indispensable. The recent COP26 summit has emphasized the need for arresting the effects of climate change at the earliest. Worldwide, countries are now seeking ways to shift towards green operations. 

Given this context, it is imperative to green global supply chains through digital transformation to curb their carbon trail. Be it production, processing, packaging, and distribution of goods, smart solutions can play a pivotal part in improving the efficiency and productivity of each segment. Fortunately, such solutions are available in every domain, including packaging and logistics. For instance, smart solutions enhance the efficiency and productivity of the Consumer Packaged Goods (CPG) segment. 

In the case of logistics, companies are leveraging digital systems such as artificial intelligence, machine learning, IoT, big data analytics, cloud, and more to promote sustainable supply chains. Here, select algorithms can use GPS data to track consignments, expedite delivery, drive cost-effectiveness and decrease waste. AI also plays a big role in the driverless vehicles of logistics chains, which increase efficiency and leave a low carbon trail. 

Digital, MSMEs, and Supply Chains

Considering the ongoing consequences of erratic weather patterns due to global warming, both public and private stakeholders are receptive to a shift towards sustainable practices. As per PwC’s Global Consumer Insights Pulse Survey, 50 percent of the global population has become more eco-friendly. The rising consumer awareness and climate targets underline the necessity for industry players to adopt green measures in the CPG sector. Here, digital transformation will play a major role in the CPG industry’s quest for driving energy efficiency, supply chain traceability, and quality checks.

Meanwhile, the MSME sector’s growth is critical for achieving an Atmanirbhar Bharat (self-reliant India), consequently, it is essential to ensure they don’t lag in the digital age. Universal automation has made it easier for MSMEs to integrate digital technologies into their business processes. For this, products from global automation players promise improved sustainability, efficiency, and traceability at every step of the value chain by enhancing plant and supply chain connectivity and providing better efficiencies.

Globally, supply chain players are deploying technology to establish future-proof operations. As per industry estimates, digitalizing supply chains can boost bottom lines by 5 percent while ensuring a 10 percent increase in revenues. 

Universally, the pharmaceutical sector is a pioneer in track-and-trace technology through serialization. Today, counterfeit goods account for 8 to 10 percent of global trade, which works out to more than US$ 600 billion yearly. Although counterfeiters leverage the latest technology to duplicate both products and packaging, smart packaging and supply chain digitalization are robust tools to combat counterfeits. These include RFID tags, holograms, and track-and-trace tools, among others. 

Benefits for CPG and Others

Digital technologies are also beneficial for CPG players, especially MSMEs, who are more vulnerable to fraud. Smart solutions are also advantageous for next-gen food, beverage, and life sciences entities. In response to supply chain disruptions, life sciences and F&B firms are swiftly altering production lines and rapidly reducing SKUs (stock-keeping units) to contain costs of impacted goods.

Additionally, they are augmenting access to data to facilitate better tracking and documenting the end-to-end lifecycles of products and processes. For drastically limiting time to market, digitally-savvy companies are also establishing and introducing global automation-based production infrastructure solutions. 

A key building block to resolve production and innovation hurdles is a tech concept termed universal automation. This denotes a landscape of ‘plug-and-produce’ automation software elements akin to an industrial app store. In this domain, hardware and software are segregated to build software-centric industrial automation structures that are portable and interoperable. 

Traditionally, CPG players have worked within the restrictions of legacy proprietary automation systems. Often, they had to choose a supplier they could coexist with although other suppliers had more innovative process-linked systems and technologies. Universal automation eliminates these old constraints, allowing the creation of industrial platforms on more open and data-driven architectures. 

Digital-first industrial firms and smart factories deploying universal automation can undertake step-change growth in efficiency, productivity, reliability, and sustainability in operations that are safe and secure while adapting seamlessly to customer demands and market dynamics. 

Universal automation is mainly enabled by an existing standard, IEC 61499. This permits the designing of software applications without dependence on hardware. Thereby, end-users, systems integrators, machine builders, and application developers have the freedom to work in unprecedented ways, promoting unparalleled degrees of productivity and efficiency. 

Considering this scenario, a global leader in green energy and automation solutions for sustainability and efficiency has been developing and launching novel products as per the IEC 61499 standard. In an era where the focus on ESG guidelines is increasingly the norm, greening global supply chains through digitalization makes perfect business sense – for MSMEs as well as other enterprises. 

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