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Video

Building an Efficient, Resilient and Sustainable Supply Chain

Bain's Hernan Saenz outlines why sustainable supply chains are within reach and how supply chain visibility is a key factor for supporting them.

Video

Building an Efficient, Resilient and Sustainable Supply Chain
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For years, supply chains have been built to focus on efficiency at the expense of resiliency. But Covid-19 has laid bare the shortcomings of modern supply chains. Ahead of the World Economic Forum's Sustainable Development Impact Summit, Bain Partner Hernan Saenz discusses why executives are rethinking their operations to focus on digital traceability and increased visibility to create supply chains that are resilient, efficient and sustainable.

Related: Four Ways Industry Can Make Supply Chains More Sustainable

Read a transcript of the video below:

HERNAN SAENZ: The World Economic Forum has called for the great reset of our economic and social institutions, looking forward to a world that will be more resilient, more sustainable and more fair. Supply chains will no doubt be part of this great reset. If we look back, we see supply chains that have been built to deliver efficiency.

But, as Covid-19 has shown us, these supply chains are also opaque, they are inflexible and they are brittle. In fact, efficiency has come at the expense of sustainability and resiliency. And it doesn't have to.

Supply chain resilience and sustainability is now at the top of the executive agenda. It is reinforced by customers, by investors, by employees and by regulators. Across sectors, companies are building control towers, essentially digital twins of their end-to-end supply chains. With these tools, management is realizing that the so-called inevitable trade-offs between efficiency and resiliency and sustainability are not so inevitable. In fact, all types of complementarities can be found.

Of course, there are many barriers that need to be addressed. We need data standards. We need end-to-end platforms that host the data and provide the right information. We need the organizational mechanisms to share data across companies but protect privacy.

We believe that overcoming these hurdles will require a number of stakeholders. Leading companies will become the conveners and bring their ecosystems. Sectors will come together, define the data standards, the sharing protocols, and help create the platforms. But third parties will be required, too, to provide the technology, the data security and the certification.

At the Sustainable Development Impact Summit over the coming weeks, we will continue to pave the path forward. Part of this is the smaller steps -- more visibility and more traceability for each company's supply chain. But our goal is broader. It is about building the environment, the mechanisms and the tools so that companies can share data and best practices more broadly.

More from the World Economic Forum

Four Ways Industry Can Make Supply Chains More Sustainable

Covid-19 shattered brittle supply chains around the world and thrust resilience—the ability to heal, reroute or substitute—to the top of the agenda for supply chain executives.

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