Supply chain deliverables are under the gun in the run-up to Christmas. They are late; they are missing; they are being saddled with record freight cost increases.
They are also increasingly in the decarbonization cross-hairs.
Volume is rising on international calls to flip the net-zero switch on the cumbersome, complicated, disjointed, multibillion-dollar enterprise that moves close to 80% of goods internationally.
The trouble is, there is no convenient switch to flip. Also, global supply chains generate an estimated 80% of the world’s carbon emissions, so finding some switches to flip now is essential.
Additional bottom-line trouble is that bankrolling any supply chain net-zero switch-flipping is going to be expensive.
Delivering Net Zero Supply Chains estimates something north of US$100 trillion. That is daunting, especially when considering that around half of that total, according to the BCG-HSBC report, will have to be invested in small and medium-sized businesses (SMEs).
BCG analysis estimates that SMEs routinely make up more than 90% of the organizations in major supply chains. But SMEs are not routinely high rollers. Most have neither the finances nor the knowledge needed to set a course for net-zero operations.
Also, investments in proceeding along that course do not initially improve SME bottom lines.
The fundamentals of the many actions required to overcome the challenges as mapped out in the BCG-HSBC report focus on inter-company collaboration, supply chain technological education and data-analytics improvement.
Access to financing and government incentives to promote cleaner supply chain operations are also essential.
Add in the need to rethink product development to reduce the carbon footprint of what is being shipped and you have a checklist that cannot be tackled piecemeal.
However, you also have a framework upon which to build a better future for goods movement environmentally and, in the long run, financially.
That is a game-changing switch that can be flipped now.
