Simplifying the journey towards a sustainable future – Ecosystem partnerships and collaborating solutions

Sustainability and responsible transition are the most important and complex challenges of our time. Collaboration is a critical factor in the transition to a resilient and circular economy.?

It would be rare for any aspect of the 21st-century global economy to escape climate economy and sustainability factors to leverage sustainability as a growth engine. However, the growth path to sustainability is often fraught with a lack of adequate adoption and approach.?

In my previous blogs, part 1 and part2, I have discussed pragmatic approaches to achieve short, medium, and long-term organization sustainability goals.

A few key take-away from part 1 and part 2 are:?

• ?Start your journey with short-term quick wins to embed sustainability in overall strategy and practices to make it a part of day-to-day decision-making and sustainable operations.
• Ways to achieve climate change impact (decarbonization) in the “End to End” supply chain operations
• “Transition pathway” approach to combine “short to medium” & “medium to long-term” sustainability solutions and make a balance between immediate benefits and longer-term value opportunities?

In this blog, I will address the challenges to sustainability and cover “Ecosystem partnership and sustainable collaborating solutions”?by forming new alliances, new business models approach with the power of advanced technologies, and digital capabilities to drive sustainability goals.

The Challenges to sustainability

There are still many open challenges to sustainability for operating a business differently, particularly in managing carbon footprint and building a circular economy from linear to circular at scale.?

Lets consider some of these.?

Supply chain planning to support future networks

· Design an?optimal supply and logistic network?based on demand pattern that is futureproofed to move manufacturing to a new local or regional location or add specific product lines to existing sites to support smoother supplies, optimize locations for warehouses, cost of logistics, etc.?

· Sourcing network?with appropriate contract management, supplier quality & performance management by finding local, regional, or global suppliers with adequate agility in supply, cost, and quality.?

·?Last-mile delivery?to provide visibility, where customers demand constant updates of their shipments.

R&D and Product Design for sustainable products

· Re-tool and engineer manufacturing lines, decarbonization needs from consumers, re-purchase new material, change in size or shape of the packaging design, recycled grades differ by country to adjust the content accordingly.

·?End of life / Repair to Circular transition economy - The high capital investment of setting up the collection, recycling, and material recovery facilities (MRFs) for more recycled content in factories.

·?Infrastructure?to support the continual looping of materials (e.g., take-back programs, reverse logistics, etc.). The economics behind this circular ecosystem must be attractive to sustain and scale.

Sustainable products as a service

· Shifting to servitization requires new business ownership models, organizational changes to align products, technologies, operations, supply chains to provide new services and changes to business processes and systems.

·?The different types of contracts need to be put in place. Product usage data must be available to support outcome-based or pay-per-use business models for billing customers, and ensure timely service, repair, replacement, or renewal.?

·?Changes to financial processes such as product costing, revenue and cost allocation, planning, and budgeting.?

Ecosystem partnerships and sustainable collaborations

To drive?sustainability goals, many system-wide challenges require system-wide solutions through new partnerships, alliances, innovations, and the power of technologies directed towards sector or issue-specific collaboration.

Businesses will collaborate around systems-based business-critical sustainability concerns in order to find a better way to address common industry problems. Cooperation around new products and services will be the inevitable next step in the growth of collaboration evolution.

To build new sustainable business models, we need partnering organizations to pool resources, discover and solve problems together by exchanging capabilities through cross-industry/sector alliances.? This can lead to exploring new markets to expand the value chains at scale to maximize collaborative advantage in an inter-connected world.?

Industry collaboration

Building strategic connections with other organizations necessitate a clear understanding of the development and competitive advantage, which can be realized by using an expanded business platform for all to participate.

Some use cases:

• The Walmart-Schneider Electric program, called the?Gigaton PPA, allows Walmart’s suppliers to pool together to transition to green energy cost-effectively by entering into a PPA and tap into Schneider’s expertise.?
• Further,?HSBC and Walmart Join Forces?to roll-out of a sustainable supply chain finance program to allow Walmart’s suppliers, who demonstrate progress in Walmart’s Project Gigaton or Sustainability Index Program to apply for improved financing from HSBC based on their sustainability ratings.
• Plastic traceability start-up?Circularise?launched a project with?Porsche?and material suppliers, including?Borealis,?Covestro, and?Domo Chemicals,?to trace plastics and ensure sustainable materials are used in Porsche car production.?
• GENERALI?announces a joint venture for the creation of a digital ecosystem dedicated to e-health. A first in Europe, the project will bring together start-ups and leading players in the healthcare, technology, and insurance sectors to accelerate the development of tomorrow’s healthcare services on a digital platform.?

Harnessing the Power of Technologies and digital capabilities

The potential for ecosystems has been through digital connectivity, sharing of data/information, access to technologies such as artificial intelligence, the Internet of Things (IoT). Building architecture on open & secure standards will enable business processes to operate faster in real-time across industries.?

Some use cases:

• ?UPS?package delivery and logistics giant has developed an algorithm?by applying data analytics and AI to create the most efficient daily?dynamic route?for drivers to reduce miles traveled, fuel consumed, and CO2 emission.?
• Siemens is working with?Mercedes-Benz?to advance digitalization in engineering and sustainable production methods and?microgrid solution, enabling the share of renewables to increase to 60% while significantly reducing CO2 emissions.
• Energy management / Efficiency: Schneider electric uses AI engines to boost grid energy consumption and forecasting accuracy to manage supply and demand variations across an electrical?grid.???

Conclusion

Ecosystem partnerships, digitalization, and building common platforms across alliances will drive the building blocks of competitive advantage. Circular innovation will be a new form of currency with advantages that go beyond the financial.

Successful collaboration can be encouraged through shared interpretations of the problem, potential approaches, and ideal solutions.?Getting everyone to work together and support the development, deploying and ownership of common goals will be critical.

These are my personal opinions and thoughts – I would love to hear your views on the ecosystem partnership and sustainable collaborating solution approach, and invite you to connect with?me?to discuss and support your journey to sustainability-driven business transformation.