What is the future of sustainability in supply chain education?
Supply chains are striving to improve sustainability as downstream companies demand it. As sustainability grows in importance in the eyes of businesses, consumers and investors, the training of the next generation of supply chain professionals will have to adapt.
FreightWaves asked Matt Waller, dean of the Sam M. Walton College of Business and professor of supply chain management at the University of Arkansas, how supply chain education might evolve.
Waller is also an advisor to FreightWaves and will speak at FreightWaves Event The Future of the Supply Chain in northwestern Arkansas in May.
The interview has been edited for clarity and length.
FREIGHTWAVES: How do you think sustainability will impact supply chain education in the future?
Waller: “Enterprise logistics is about managing the flow and storage of inventory in a way that minimizes total costs and achieves customer service goals. These total costs include storage costs, transportation costs, the cost of poor service, handling costs, labor costs, etc. Minimizing these costs while achieving various customer service goals was not subject to customer visibility, but it is in the process of change. .
“Now we can’t just minimize these costs based on customer service goals, but we also need to consider how how we trade these costs for each other affects customer perceptions, such as preferences for certain types of sustainability and how customers perceive them to be good for the environment.
“Everything will eventually become visible, and more and more metrics will be measured and made public. The effect of all of this must be considered when setting various customer service goals and when trading off those costs. »
FREIGHTWAVES: Can you give an example of the trade-offs you mentioned?
Waller: “To achieve a given fill rate, a company can hold more inventory and use slower transportation, or it can hold less inventory and use faster transportation. Similarly, for a given inventory level, a company may use slower transportation and achieve lower fill rates.
“Additionally, to achieve a given fill rate, a company may hold more inventory and use less reliable transportation, or it may hold less inventory and use more reliable transportation. These are basic examples of such compromises. All will have different impacts on sustainability metrics.
Read: 5 Reasons to Attend FreightWaves Future of Supply Chain Event
FREIGHTWAVES: Can you list the specific aspects of sustainability that you think will be most important in supply chain education in the future?
Waller: “As I mentioned earlier, enterprise logistics is about managing the flow and storage of inventory in a way that minimizes total costs and achieves customer service goals. Supply chain management is about integrate business processes between functions within a company and between companies in a supply chain.
“Such integration includes things like sharing information, including information relevant to sustainability. Thus, one of the most important aspects of sustainability that will prevail going forward will be sustainability metrics and how those metrics are affected by logistics and supply chain management decisions. Additionally, systems theory will be key to understanding sustainability and supply chain management.
Waller recommended reading The Luxury Paradox: How Systems Thinking and Supply Chain Collaboration Can Embed Sustainability in Everyday Practice from the Journal of Business Logistics for more information.
FREIGHTWAVES: How is the Sam M. Walton College of Business at the University of Arkansas adapting to growing industry demand for sustainable supply chains?
Waller: “We collaborate with industry partners on environmental, social and governance issues and conduct research on topics related to sustainability and ESG generally. We have worked with JB Hunt Transport Services Inc. on this, and we have also The Sustainability Consortium.”
Tyler Cole, director of carbon intelligence at FreightWaves, drew attention to the importance of including sustainability in supply chain education.
Cole said: “There is no doubt that higher education is gearing up for an explosion of interest in sustainability and supply chains. Historically strong supply chain schools should double down to develop future leaders who can understand and assess network risks and maximize stakeholder value. The days of a focus on cost reduction and maximizing stock value are long gone. I look forward to seeing more and more graduate and PhD case studies demonstrating the value of resilient and sustainable supply chains.
Click here for more FreightWaves articles by Alyssa Sporrer.
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