Supply Chains & Sustainable Choices

Priorities for innovation and sustainability have weight as focal points for setting strategic objectives however some recent announcements and workshops have prompted further consideration of the sustainable options and what effects these choices will have on our global supply chains. Principally - it is in adding to the array of factors that decision makers can, and should, weigh in balance when setting in motion strategies, systems and supply chain operations to achieve these newly framed objectives. Looking at each in turn, as well as the cumulative effects of events, disruptions, policy and decisions may fuel some further reflections. I look forwards to hearing your thoughts.

Firstly - the University of Wollongong’s? Supply Chain Success Symposium last week offered a deep dive into the opportunities inherent in the supply chain operations to embed sustainable options. The presentations from industry experts as well as PhD Candidates coupled with announcements from some of the Primes regarding Sustainable initiatives and the achievements in the past year demonstrates where some objectives are gaining ground, as well as being worthy of scrutiny for lessons learnt. Research is underway into the supply chains that support tourism in some of our neighbouring countries where exploitation has historically been camouflaged in "ecotourism". Ensuring that supply chain operations are undertaken effectively, efficiently and ethically was a key message across all deliberations. The ballistic nature of Freddo Frogs was also a point of discussion.....

On the announcement front:

The Defence Global Supply Chain program has been refreshed and the new team of 13 is taking up the challenge to increase opportunities for Australian Suppliers to enter these global markets. This offers risk mitigations of second source of trusted supply for the multinational corporations as well as durability and knowledge transfer for Australian SMEs.

Additionally - the Defence Digital Engineering Strategy 2024 was released last week, offering a window for industry to collaborate on innovative practices that can assist with the design, development and sustainment options for Defence, through five Goal areas:

• Defence Culture and workforce - empowered to deliver digital engineering
• Development, integration and use of Digital Models to inform decision making and design
• Trusted, enduring and authoritative data being a fundamental input to digital engineering
• Technological Innovation enabled by Digital Engineering
• Defence's digital environment enabling collaboration and performance of digital engineering.

This week has also seen the Department of Industry release the 2024 National Science & Research Priorities , and these too offer goals for reshaping supply chains and industry development initiatives.??The new? National Science and Research Priorities establish the imperatives for collaboration as well as placing emphasis on Australia’s specific needs for the future. These include:?

• transitioning to a net zero future?

• supporting healthy and thriving communities?

• elevating Aboriginal and Torres Strait Islanders knowledge systems?

• protecting and restoring Australia’s environment?

• building a secure and resilient nation.??

Notwithstanding that I would prefer to discuss creating an Antifragile Nation (and as a shameless hint- I am calling for my next round of interviewees, if you would like to make time with me….and I do have names to follow up with, I haven’t forgotten!) these objectives have a high degree of interconnectivity with the Indigenous Goals set out in major companies’ Reconciliation Action Plans as well as with objectives of other national programs.

Particularly, there is the demonstrable underscoring of one of the key Industry 4.0 precepts: that human centred values must remain at the forefront of decision making.? The argument here is that rapid advancements in digital, physical, and biological spheres should enhance human capabilities and improve quality of life rather than solely drive productivity and economic growth.? This partners with the UN’s 17 Sustainable Development Goals (SDGs) as the integration of human-centered values in an Industry 4.0-shaped operation becomes a channel to enhance decision-making processes, making them more inclusive and ensuring the consideration of a broader range of impacts on the environment. More importantly, they will also act upon the societies around each level of supply chain operations in order to ensure all people and communities can benefit from the supply chains operating in their region. This perspective is not only about adopting new technologies: moreover rethinking organizational structures, leadership styles, and the overall approach to industrial activities to prioritise sustainability and transcend resilience - truly Antifragile systems taking the stage.?But critically here- in concert with the sustainable and antifragile characteristics, should be the ethical points.

Introducing ethical considerations into the mix prompts some reflection upon why businesses may choose to join our supply chains – alignment with the ethics and values, sustainability choices and research priorities start to transcend mere transactional relationships. This is where I borrow the scientific term Covalent and start to identify the value of covalency in supply chains – where the bonds between companies unite to form a more stable state.

When values and priorities are identified and socialised, it offers a greater number of points to connect across the essential network of primary producers, manufacturers and integrators, tempering the supply chain to achieve greater benefits as well as attracting more like-minded businesses and: customers.???

Another document released this week showcases L3Harris Technologies' commitment to our 2030 Sustainability Goals , part of our commitment to achieving greater sustainability in human capital as well as production factors.?? There are some interesting threads to be pulled on with the SDGs , which should prompt further examination of supply chain operations and where we can make ever more responsible decisions regarding education and social conditions.??

Laying out a stylised Supply Chain by phases (below), we can see where the sustainable choices present themselves to decision makers as well as where we can use the UN SDGs as headmarks.? Impetus for enacting these changes comes from several directions: such as the customer who brings expectations to the marketplace and will eschew products without satisfactory Sustainability credentials. Additionally, global Policy makers and the agencies, including the International Maritime Organization , banks and signatories to agreements signed in Paris and Kyoto , set other imperatives that impact Supply Chain operations, especially in the Transportation layer.?

The L3Harris Sustainability goals find correspondence here, with the goals of reductions in emissions, water usage and production of waste.? Identifying realistic (and my students may remember the emphasis I place on SMART ) opportunities to do so at each stage in the global supply chain elicits a template for “hard coding” sustainability practices into operations, which might look something like the table below.?

When seeking the design and delivery of the next generation of capability,?alignment with the Sustainable Development Goals can offer a roadmap for the Defence and technology primes. As the SDIPs , AUKUS Pillar 2 domains, research and national Priorities are identified, they also illustrate the avenues for? greater potential and valuable contributions to global sustainability. The implications being better conditions on land, sea and air as well as opportunities for improved quality of life for workers and communities.?

There are unquestionably,? challenges to navigate with these implementations, as a change to a Sustainable option often represents points of potential fragility to the system, as well as ripples of disruptions.? The IMO 2020 sulfur oxide emission control limits enacted through MARPOL Annex VI (with flow on changes that will enter force in May 2025 ) had an effect on the availability of vessels to service specific routes in 2019. As the initial effects of COVID-19 began to manifest, reduced number of vessels, alterations in routing patterns and crewing distorted the transportation layer of our supply chains . This was compounded by further shocks: the Ever Given Suez Canal incident , the Gotthard tunnel derailment and more recently: the Francis Scott Keys Bridge Allision . All of these events and factors compound to place unequal strains on our supply chain network and adopting the Antifragile approach – to embrace disruption in order to achieve growth, offers a way ahead.?

Integrating sustainability into supply chains—considering the people, processes,? and systems involved—presents challenges and trade-offs at every level. The global Defence and technology giants can advance these global initiatives by exhibiting thought leadership, investing in research and a continuous dedication to improving operational efficiency and meeting future defence needs.??

This approach, which intertwines ethical considerations essential for global welfare and ecological balance, answers the key question "What can we do better?". When we emphasise environmental and cultural stewardship in order to set new benchmarks for sustainable goals and practices in research, innovation, our operations and decision-making, we can achieve ethical, sustainable growth in tomorrow's supply chains.?