Collecting sustainability data and setting goals to improve environmental practices is reaching impressive levels of growth. It’s great to see how organizations can make significant change in a relatively short period of time.
It’s a big challenge to go beyond environmental reporting and turn sustainability data into meaningful supply chain action. It requires a level of transformation and scale that organizations aren’t often making. What if we could connect sustainability data with supply chain data from within our existing processes? Would that help simplify decisions down the road?
Sustainability data combined with supply chain data under the same supply chain planning solution can be the answer we’ve been looking for. Chief supply chain officers (CSCOs) could bring sustainability metrics into their operations, share trading partner performance, and run what-if scenarios with simulations that consider the sustainability impact of changes to the supply chain.
As we know, sales and operations planning (S&OP) is an integrated planning process that aligns demand, supply, and financial planning and is intended to support decision-making towards a feasible and profitable material and financial plan.
Within an S&OP process, we can incorporate sustainability data and include a review step to monitor sustainability performance. We can assign tasks pertaining to sustainability objectives and reach out to trading partners to collaborate as needed.
We now have the ability to visualize sustainability metrics across the supply chain, and that can quickly expose many challenges to act on. Emissions, water consumption, waste, or any other sustainability metric can be placed in the context of a planning period and projection.
Extending this to your suppliers can give you access to their sustainability performance. Ranking them accordingly provides visibility into the current state of their sustainability initiatives and may influence how you do business with them in the future. You could also bring in downstream transportation and distribution data to understand the sustainability impact of routes and transportations methods.
The next step is to combine all metrics and aggregate them into a total score to provide a full picture of your supply chain’s sustainability performance. You can now monitor performance relative to your sustainability targets.
Adjusting make vs. buy, finding alternative suppliers, or using higher-grade material are some of the actions you could take—all within your S&OP process as you create new plans and review their feasibility. You could also see the impact in terms of revenue and cost, as some of these decisions can have an immediate financial impact.
Bringing sustainability data into an S&OP context can advance our ability to use sustainability data in a meaningful way. It also shows how we can plan for mid and long-term supply chain needs while taking into consideration our investments in making better, more sustainable supply chain decisions.
This is one out of many use cases companies can incorporate to meet sustainability goals. Sales and Operations Planning can put sustainability data into action—helping you integrate objectives into your S&OP process, monitor performance relative to targets, evaluate the impact, and improve on sustainability performance with simulations and planning updates.
Daniel Bachar leads Supply Chain Planning Product Marketing at Oracle. Daniel brings more than 10 years of experience in sales, marketing, supply chain planning, and advanced analytics. He provides a unique blend of business and industry knowledge, leading successful efforts to integrate new technologies into effective supply chain solutions. His experience includes development, design and go-to-market strategy of supply chain and advanced analytics products, helping clients with complex business problems to achieve complete visibility into their supply chain operations.