Time to Reboot: Sustainability Today, Security Tomorrow

The corona epidemic has changed the socio economic and geo political scenario of the entire globe irrevocably. The breakneck pace of the global economy has come faltering down to barely a crawl and businesses such as tourism, construction and manufacturing have been severely hit. How does this bode for the prospect of sustainability, a concept that had found much acceptance over the past decade and which now is being pushed aside citing costs and market slowdown.

Well, Sustainability is the best insurance against a market shock! When you look from the “Sustainability Lens” , terms like “Business Continuity” and “Contingency” planning actually hold some meaning and don’t just appear once a year in your Annual report. And ofcourse let’s not forget about this “widely talked about” and barely implemented concept of circular economy!!

Introduction of Circularity within a business not only ensures huge cost savings but infact maximization of profit in the long term as well as a reduction of dependence on allied businesses through rigorous adoption of the 7 Rs- Rethink, Reduce, Repair, Reuse, Refurbish, Recycle and Recover. This, in turn, acts as an excellent hedge against market shocks of any kind, a concept we are better familiar with under the name ‘Risk Management’.

And here is where sustainability comes in, for it is nothing more than the application of a long term and stable risk management module with the added benefits of enhancing optimization and efficiency. In the present times of crisis, it seems that supply chain management is spelling the difference between profit and loss.

Sustainability as a tool for amplifying supply chain resilience? Yes of course! Sustainable supply chains differ from more traditional supply chain models as they’re not cost effectiveness based, rather they are revenue based. Thus the lowest cost is not the criteria for supplier selection; rather it is a holistic view which guarantees revenue, making allowances for market fluctuations and calamities. Moreover, supply network mapping is labour intensive and expensive, and it is an integral part of sustainable supply chains. This is cited as a pretext by many to not implement sustainable supply chains, but considering this step to be one which completely ensures against market risks and calamities; it should be a step which is best undertaken as soon as possible for the return far outweighs the initial investment.

Many of the larger global corporations have understood this point and have actively implemented sustainability into their business value chains by using analytics to develop inventory, transportation and warehouse optimization models. Companies such as IKEA, Phillips, Trimo, Steelcase and many more implement green supply chains and have reaped the benefits of it, even in these trying times.  Case in point is IKEA which implements their famed IWAY green supply chain management system. This system has ensured the reduction in health costs for its workers as well as an increase in efficiency. The health benefits directly translate as low health insurance premiums, reduced sick day leave and enhanced worker productivity. Another example is Intel, they build semiconductor fabrication factories with identical layouts for machinery and production processes. This standard fabrication design greatly aids Intel in transitioning their production to other facilities, if the need arises. And lets not forget, corporate culture and internal communication. It is absolutely vital to communicate the state of the business operations and strategic goals to employees. A good example is that of Dell – Amongst a wide variety of information, Dell employees have continuous access to product manufacturing and shipment data so that when a disruption takes place, employees are aware of status of the company. This includes information around which product is still selling, raw materials, operation updates etc. Companies like Dell, Intel, IKEA and so many other responsible companies, make it a point to provide quick and accessible support for risk and disaster management planning.

Sustainability is slowly but surely pervading all economics and commerce as a core principle, and if anything the corona epidemic has done for us, it is that it made us aware of the practicality of sustainability. More importantly for companies facing the aftermath of massive supply chain disruption, the lesson learnt here is - active consideration and inclusion of social and environment risks and their mitigation strategies into core business decisions. These steps would not only ensure stability and longevity of a business but re-balance our relationship with nature.