What bold supply chain strategies will be needed in the next decade?

Supply chains were once taken for granted – simply a routine aspect of business operations. How times have changed. Over the past decade, they have faced disruption and criticism like never before, thrusting them into the spotlight.

International conflicts, natural disasters, a global pandemic – there is reminder after reminder that supply chains can be surprisingly fragile. “Manufacturers are now absolutely focused on ensuring their supply chains are robust and resilient,” said Rohit Moudgil, Head of Manufacturing & Industrials at HSBC UK. “At the same time, they face another imperative, namely ensuring they align with the ESG objectives of their own organization and those of their customers and partners.”

The latter is about improving ecological sustainability. A report published by the World Economic Forum argued that decarbonising supply chains would be “a game changer for the impact of corporate climate action”. But there is also pressure to make supply chains socially responsible: free from child labor and free from human rights violations.

As regulatory pressure focuses minds, manufacturers are increasingly exploring new tools to address these challenges.

We spoke to three manufacturing Trailblazers to ask them what new supply chain strategies they expect to see come to the forefront over the next decade…

“Products will need their own passport.”
_{— Douglas Johnson-Poensgen, Founder and CEO, Circulor}

Circulor helps companies gain visibility into their supply chains to demonstrate responsible sourcing, improve their ESG performance and manage risk. With £34.6 million in funding, Circulor’s customers include Volvo Cars, Polestar, Tesla and BHP.

Douglas Johnson-Poensgen, Founder and CEO, Circulor

“In the next ten years we will all know what a digital product passport (DPP) is. Essentially, DPPs (digital documents that contain information about a product’s origins, its components and materials) make manufacturers responsible for what happens upstream, but they can also equip us as consumers to make better choices. I think we’ll all get used to scanning QR codes or touching our phone to an NFC when making purchases to discover more about how and where something was made. This trend has already started with batteries.

“The system requires digitalization throughout the supply chain to work. Imagine you have a battery containing cobalt from a mining site in Congo. The DPP must show and validate where it comes from and prove its sustainability impact. So: the material is put in bags and provided with, for example, a QR code. When approved people register the scan and its origin in the app, facial recognition confirms their identity and GPS confirms the location.