supply chain profit sustainability celonis [shutterstock: 1805849848, GoodIdeas]
[shutterstock: 1805849848, GoodIdeas]
Management Press Release

Chief Supply Chain Officers Would Sacrifice Profit For Sustainability

According to the results of a new study from IBM and Celonis on supply chain resiliency, Chief Supply Chain Officers (CSCOs) recognize the critical role that hybrid cloud, AI, process mining and execution management play in helping them overcome the disruptions they’ve faced over the last two years.

In fact, 72 percent of CSCOs surveyed expect their processes and workflows to be automated over the next three to five years, and 69 percent plan to accelerate cloud adoption to enhance real-time data access.

The study, The resilient digital supply chain: How intelligent workflows balance efficiency and sustainability, conducted by the IBM Institute for Business Value (IBV) in cooperation with Celonis and Oxford Economics, surveyed almost 500 CSCOs across ten industries including banking, consumer products, manufacturing and automotive. The study findings indicate that organizations are searching for ways to modernize their supply chains by embracing data and hybrid cloud strategies as well as prioritizing sustainability.

The top challenges CSCOs are facing

  • 80 percent of CSCOs said that demand volatility is a top challenge, while 77 percent mentioned the increased cost of transportation and logistics.
  • Cost aside, 76 percent cited the availability of transportation and logistics as a top challenge.
  • These challenges lead to missed opportunities: 71 percent said lower inventory for raw materials and finished goods has led to stock-outs and lost sales. And 60 percent have had to expedite products for customers, leading to higher transportation costs.

Sustainability over profit

66 percent of surveyed CSCOs said sustainability is a core element of overall business value. More than half (51 percent) of CSCOs surveyed said they would be willing to sacrifice profit – on average 5 percent to improve sustainability outcomes – equating to $22bn for US Fortune 500 companies in one year.

To that end, CSCOs identify several specific actions they plan to take over the next three years in pursuit of circular economy goals:

  • 47 percent are initiating full lifecycle design of their materials and products to expand re-use of materials and reduce waste.
  • 44 percent plan to improve energy efficiency of their products and services.
  • 35 percent plan to develop new products and services based on renewable energy componentry, and 30 percent expect to engineer new zero-waste products and services.

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