by Joyce Coffee My team hosted a recent conversation with our stakeholders titled “Maximize Supply Chain Gain: Addressing Social and Environmental Issues for Economic Return.” It occurred to me that adaptation is an increasingly important element of a cost-effective supply chain. In earlier posts, I’ve noted the risks corporations face from supply-chain disruptions due to severe weather or agricultural pests. It’s apparent that from meeting evolving customer needs to providing higher-tech solutions, suppliers are adapting.
Indeed, while corporate supply-chain audits today may focus on cost-saving opportunities, labor practices and “greener” products. A good number of companies are employing innovative approaches to climate adaptation. These examples are taken from the Carbon Disclosure Project report.
Climate adaptation boosts demand for certain products. For instance, Coca-Cola and Carlsberg Group anticipate an increased demand for bottled beverages as a result of temperature increases.
Climate adaptation translates into fresh problems to solve. Companies are creating proprietary public tools. For instance, America Latina Logistica developed a new crack-detection technology that detects fissures along railway networks caused primarily by temperature changes. And EMC acknowledges that its business recovery, continuity and back-up products, solutions and services are climate-adaptation tools.
Belt and Suspenders
Hitachi is ensuring business continuity by providing in-house energy generation, while Sprint has invested in mobile generators that help to restore electric service quickly.
United Parcel Service uses “intermodal downshift” to avoid or respond to extreme weather events. This system lets UPS substitute different modes of transportation for each another to transport the same goods when challenging conditions warrant it.
Adidas employs a multi-country sourcing strategy to balance environmental and other risks, allowing for a shift in production in the event of extreme weather.