By: Tom Christensen, Head of Thought Leadership - Nordics, LTIMindtree

Last week, we hosted a supply chain and logistics discussion, this time at the LEGOLAND hotel in Denmark. We had 14 senior delegates ready to share views and ideas on fulfilling the new EU sustainability directive. A directive that helps customers, investors, consumers, and other stakeholders evaluate your corporate sustainability performance. We addressed classic challenges where peers could share concerns and discuss possible solutions.

Driving environmental responsibility and competitive advantage

The EU sustainability directive promotes environmental sustainability by reducing carbon emissions, minimizing waste, and optimizing resource usage in the supply chain. This can lead to a cleaner and greener operation, aligning with EU sustainability goals. However, it also has the potential to enhance brand reputation and customer loyalty. Consumers are increasingly conscious of sustainability practices and prefer to support businesses that prioritize environmental responsibility. By showcasing a commitment to sustainability, companies can attract environmentally conscious customers and gain a competitive edge in the market.

Inspiration

Our guest speakers for the evening included Hartanto Wong, Associate Professor at Aarhus University, and Dominic Regan – Senior Director for Oracle’s Value Chain Execution. In addition, we had the pleasure of Glen Campbell, Supply Chain Strategy Director – EMEA, and myself from LTIMindtree hosting the roundtable.

Here are some of my thoughts and findings from the event.

New laws push frontiers

The new EU Corporate Sustainability Reporting Directive (CSRD) is a directive that modernizes and strengthens the rules concerning the social and environmental information companies must report. The first companies must apply the new rules for the first time in the 2024 financial year for reports published in 2025.

One delegate pointed out that in January 2023, Germany implemented a supply chain law with a fine of 8 million euros or up to 2% of annual global turnover for non-compliance. The Act initially applies to enterprises with at least 3,000 employees and, from 2024 to enterprises with at least 1,000 employees in Germany.

No wonder this is a high-priority

The EU directive is highly relevant as the transportation sector accounts for 64% of global oil consumption, 27% of all energy use, and 23% of the world’s energy-related carbon dioxide (CO₂) emissions.

Buy-to-buy sustainability

Hartanto highlighted an example where a Danish dairy company—Arla Foods, whose objective is to improve their climate footprint—proactively pays subcontractors to reduce the climate impact on their farms. As much as 2.2 billion DKK is earmarked annually to reward the most climate-efficient farmers.

Spotlight on challenges

Delegates face day-to-day challenges, such as fragmented operations due to outsourcing in the supply chain, difficulty in benchmarking performance without sufficient data, and concerns about cost optimization when outsourcing to a single logistics company. These challenges all stem from a need for comprehensive insights into the network of companies involved in creating a product and delivering it to the consumer.

The stick and carrot

Throughout the discussion, delegates shared insights of interest. Some representatives argued they had to find a way to follow the law; others highlighted the importance of achieving certification to secure scientific proof to avoid greenwashing. Greenwashing can lead to a bad reputation and, eventually, the layoff of the chief executive. However, some delegates came from an angle of opportunities like can I accelerate business by meeting my customer’s expectations? In that case, I am motivated by people’s power to strengthen my green image. A delegate explained how Lego refurbishes Lego bricks and sells them as a recycled product. They see sustainability as an opportunity to do something good for the environment while developing and optimizing their business.

I was left the feeling that all delegates were motivated, seeking to find a service that could bring them to the next level.

Tracking solution

Orchestration is seen as a way to address many of the challenges outlined. It enables delegates to create the foundation for meeting the sustainability requirements (report) but also to optimize logistics processes, process simplification, and achieve cost savings. Connecting, importing, and analyzing operational data across the supply chain is necessary to get a clearer view of the logistics operation. However, implementing such a solution may require an initial investment in technology and training for people.

Source: Oracle

Further optimization

Such an overview opens an opportunity for further optimization among current suppliers. Now, it is possible to take a deeper look at the different vendors’ internal focus on running a sustainable business – does it match your expectations, and can you deliver a greener service by selecting a different vendor? This can be any vendor from truck service to warehouse to IT supplier.

Each industry has different ways of measuring the vendors’ focus on sustainability. The “sustainability index TSI” is one way of selecting IT vendors. Oracle software has a score of 97, and LTIMindtree services a score of 83. This indicates two vendors with top performance in delivering sustainable software and services.

Walking the talk

Overall, the aftermath of transforming to a sustainable supply chain and logistics roundtable can result in environmental, social, and economic benefits for businesses and society.

At LTIMindtree, we approach these challenges holistically and attack them on multiple levels. From creating and implementing a strategy, we select the exemplary architecture with a supporting toolset. We bring the right resources, experience, and education to succeed in helping customers meet their goals.

To amplify the implementation, we bring our digital know-how from similar projects. However, it is equally important to focus on budgeting, planning, and technical readiness to ensure a successful migration while managing costs and technical challenges. Collaborating with an experienced partners like LTIMindtree and Oracle minimizes the risk and helps navigate these complexities effectively.

Overcame barriers

A global manufacturer faced challenges in obtaining a comprehensive view of their business. They specialize in producing lifting and material- handling equipment for various industries such as construction, infrastructure, transportation, refining, and utilities. The company’s primary business segments include aerial work platforms, construction cranes, bulk-material hauling machines, road-paving machines, and container- port cranes. To overcome these barriers, the manufacturer implemented strategies such as rolling out IT to global locations to incorporate data points that could provide insight into the entire supply chain. As a result, they achieved several benefits, including a unified view of assets and price structures. This promoted global alignment and allowed for a more sustainable and optimized approach on a global scale.

Explore more here:

LTIMindtree use case:  Global Material Handling Major Reduces Oracle E-Business Operations Costs by 35%

Oracle use case: Unilever cuts transport costs and emissions with Oracle

Oracle use case:  Tetra Pak modernizes global logistics with Oracle Cloud

Gartner Magic Quadrant for Transportation Management

Watch video here