Digitalization is thought to revolutionize sustainable supply chains through the economic and environmental advantages presented by major technologies. These include artificial intelligence, additive manufacturing, blockchain, big data, and the Internet of Things. These technologies create more transparency, reduce inventory and waste, lower environmental footprints, save time, and cut costs-essentially, transform the way businesses pursue their sustainability goals.
But these benefits accruing from this digital revolution are not equitably distributed. Almost two-thirds of the population of the least developed countries remain offline and hence left out of these advances. It becomes important to include these excluded populations in the digital economy in ensuring that digitalization creates inclusive growth and does not follow the same development models of the past where the benefits remained concentrated in already developed areas.
Impact of Digitalisation on Supply Chains
In addition, digital technologies have also been incorporated into the supply chains and demonstrate promising results. For example, digitalization allows better visibility and efficiency within supply chain operations, in that it considers all dimensions of the triple bottom line: economic, social, and environmental.
Technologies Driving Change
Artificial Intelligence (AI): Operational optimization, demand predictions, improved decision-making
Additive Manufacturing: Also known as 3D printing, it reduces waste by making only what is needed.
The blockchain ensures transparency and traceability to reduce fraud and various inefficiencies. Big Data bears insights that drive efficient resource management and waste reduction. Internet of Things-IoT connects devices and systems for real-time monitoring and management of resources. Challenges facing the Least Developed Countries
These advantages notwithstanding, LDCs are still grappling with serious hurdles on the road to digitalization. About 66% of the offline population of LDCs thus misses out on the economic and environmental dividends to be expected from such digital technologies. The need to deal with these differences is great to avoid a “winner takes all” situation where only developed regions will be benefited by the fruit of digital advancements.
Efforts to involve LDCs into the digital revolution can answer certain questions about sustainability in these regions. Such examples could be given through digitalising trade facilitation and business processes which will have a very high value for small businesses and farmers in these regions.
Case Studies of Digitalisation Impact
Vanuatu: The Electronic Single Window project in Vanuatu decreased the processing time of biosecurity certificate issuance from six days to just ten minutes. The shift online has reduced paperwork by 95% and physical trips by 86%. Which means that in terms of CO2 emissions, it is translated into a reduction of 5,827 kgs.
Timor-Leste: The implementation of an Electronic Single Window reduced by 90% the number of physical trips among government agencies and printed customs documents by 80%. It resulted in an estimated reduction in CO2 emissions of 14,492 kgs.
Cambodia: The design of an Electronic Advanced Data interface was developed with the collaboration of the Universal Postal Union, UN Conference on Trade and Development, Global Alliance for Trade Facilitation, and Swisscontact. It fast-tracked e-commerce transactions for MSMEs in general and increased efficiency both at the posts and customs departments.
Bhutan: The “e-infrastructure for trade and services” project by the Food Corporation of Bhutan ushered in machine grading with an e-auction system for potatoes. This has indeed increased price transparency, prevented cartelisation, and lowered the transaction cost.
Future of Digitalization in Sustainable Supply Chains
But digitalization can change the nature of global value chains, which can only be accomplished successfully through the spirit of inclusiveness. In order for all sustainability goals to be achieved worldwide, all nations need access to digital means and infrastructure.
Digitalization increases efficiency and productivity but also enables flexible and customized production processes. This creates a positive circle where progress in digitization reinforces sustainability; innovations promote more sustainability and improve supply chain management.
While these technologies are still evolving, focus must be directed towards integrating these tools at all levels in the world’s economy to ensure that their benefits are available universally. Only with the addressing of this digital divide can there be a search for a more equal and sustainable world.
Conclusion
Digitalization is a game-changer for sustainable supply chains, promising immense economic and environmental advantages. Advanced technologies are changing industries and allowing better transparency; however, this digital divide leaves people, in particular in LDCs, far behind. Inclusive strategies need to be put in place so that digitalization contributes to meeting global sustainability goals and benefits all regions.
Source,
[Source: Study on Digitalisation Impact on Sustainable Supply Chains]