By Jon Chorley, Chief Sustainability Officer and Group Vice President of Product Strategy for Oracle's Supply Chain Management (SCM) Applications
As companies face rising demands from consumers, governments, and their own boards to better address environmental issues, they also have to deal with their customers’ ever-higher expectations for convenience. (Goodbye, two-day delivery, hello same-day!)
The competitive pressure to provide the best possible customer experience is not going to let up, and neither is the drive to make products, services, and operations more sustainable. How best to resolve this apparent dichotomy is yet another challenge facing today’s supply chain professional.
I maintain that the two are not mutually exclusive. In fact, some of the same technologies that businesses have used to improve customer service can play a critical part in improving sustainability. It’s all about providing information and choices that nudge the customer toward environmentally positive choices, while still delivering an excellent customer experience.
That requires a clear sustainability vision combined with some real creativity—and enabled by the right technology.
Here’s an example: given that more and more people say they want to make sustainable choices, what if a company gave them the power to do that, providing them with delivery choices that include information on environmental impact, and not just speed?
Imagine a website that as part of the user profile setup asks, “Do you prefer eco-friendly deliveries?” It then automatically provides the consumer with information about various delivery options, along with the environmental implications of each, and defaults to delivery choices that minimize the need to expedite and maximize the ability to consolidate. All of that helps to cut greenhouse gas emissions.
And what if that company charged less for the most environmentally-friendly mode of delivery or enabled the customer to accumulate credits that could be used against future purchases? This combination of modest financial incentives and the goodwill generated by empowering customers to make more sustainable choices could both make an environmental difference and enhance a company’s brand.
To make such a vision attainable requires companies to match each customer’s preferences with the product’s availability by location, whether the product is perishable, the different transport options available for delivery, the different shipment/delivery schedules, and so on. This can be combined with other factors based on data gathered from sensors and analyzed with artificial intelligence (AI).
Key to this scenario is the free flow of data among warehouse management, transportation management, order management, and other systems—all integrated with the company’s finance and ecommerce systems.
Taking a step further back, all of the systems necessary behind the scenes to present customers with environmentally-friendly delivery choices take power to run. The energy required to run those calculations needs to also be a part of the sustainability equation.
While data centers have been singled out as big users of energy, studies have indicated that the benefits of well-applied IT technology can provide an environmental benefit that is 5 to 7 times greater than its own costs. For example, compare the environmental cost of having people fly in for a meeting or conference to the energy it takes to host that meeting on Zoom.
For companies that run their own data centers, it’s important to make those facilities as energy-efficient and renewably powered as possible. That’s a complex and constantly evolving challenge for most IT organizations—and it’s one of the reasons why more and more companies are moving to public cloud providers.
In addition to offloading all of that maintenance time and expense by moving to the cloud, such companies also gain a sustainability benefit: public cloud providers are laser-focused on making their data centers as efficient as possible. They use the latest innovations and technologies to increase compute power and reduce energy usage, and all of the major cloud providers have made big commitments to power their data centers with renewable energy.
Circling back to giving consumers information about the most environmentally friendly delivery options: as companies explore ways to provide better and better customer service, sustainability should be a part of that equation. The technology exists today to connect more of the dots in business operations than ever before—and increasingly to use AI for real-time visibility.
The potential for providing consumers with transparency on the environmental cost of their choices is intriguing. In the short term, it could be a brand differentiator. Long term, it may be table stakes.
I don’t think any company has managed to take sustainability this far, but it’s already past time for company leaders to provide environmentally conscious choices, and not just ones focused on speed at any environmental cost.