Sustainability and responsible green transition are the most important and complex challenges of our time. Collaboration is critical 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 sustainable business models to leverage sustainability as a growth engine. However, the growth path to sustainability is often fraught with inadequate adoption and approach.
The Challenges to Sustainability
There are many challenges to sustainability for operating a business differently, particularly in managing carbon footprint and building a circular economy from linear to circular at scale.
Let’s consider some of these.
Supply Chain planning to Support Future Networks
- Design an optimal supply and logistic network based on a future-proofed demand pattern 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, and more.
- Sourcing network with appropriate contract management, supplier quality and 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 when it comes to 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). 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, and supply chains to provide new services and changes to business processes and systems.
- 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.
Embracing Sustainability for a Stronger and More Resilient Business Future
To drive sustainability goals, many system-wide challenges require system-wide solutions through new partnerships, alliances, innovations, and the power of technologies directed toward sector or issue-specific collaboration.
Businesses will collaborate around systems-based business-critical sustainability concerns 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 and discover and solve problems 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 interconnected world.
Cross Industry Collaboration
Building strategic connections with other organizations necessitates a clear understanding of the development and competitive advantage, which can be realized by using an expanded business platform for all to participate.
For example, the largest global insurance and asset management providers announced a joint venture to create a digital ecosystem dedicated to e-health. It 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, and access to technologies such as artificial intelligence and the Internet of Things (IoT). Building architecture on open and secure standards will enable business processes to operate faster in real-time across industries.
For example, a packaging 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 travelled, fuel consumed, and CO2 emission.
A European multinational company specializing in digital automation and energy management uses AI engines to boost grid energy consumption and forecast accuracy to manage supply and demand variations across an electrical grid.
Simplify the Journey to Sustainable Future
Ecosystem partnerships, digitalization, and building common platforms across alliances will drive the building blocks of competitive advantage. Circular innovation will be a new currency form with benefits 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, deployment, and ownership of common goals will be critical.
We have simplified and sharpened our commitments toward sustainable digital transformation in the new world order. We Rise for a more equal world, to be future-ready, and to create value.
In Tech Mahindra, we see ourselves sprinting towards a more equitable world with a two-fold imperative of future readiness and sustainable digital transformation through collaborating solutions and ecosystem partnerships to drive the adoption of innovative technology.
The four key pillars of Tech Mahindra’s Sustainability Framework and our sustainability solutions have been built on to enable sustainability-driven business models and embed them into enterprise business strategy and operations.
Author:
Avanish Kumar
SAP Practice Head, Tech Mahindra.
Avanish has over 28 years of experience in the Industry and SAP domain. Avanish is passionate about working in sustainability to enable business value-driven S/4HANA sustainable transformation for clients. He has extensive experience developing sustainability solutions for different industries using SAP technologies and digital platforms.
He is a certified sustainable supply chain professional and a regular blogger on sustainability, supply chain, and SAP. Avanish has a Bachelor’s in Engineering from IIT, Roorkee, and a diploma in sustainable business strategy from Harvard Business School.
