Essity B 263.3 (+0.1 SEK) on 29-Nov-2023 16:39


Three Ways to Future-Proof Your Supply Chain

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Though much of the news in the supply chain world the past few years has been defined by shortages and disruptions in the public eye, big changes are on the horizon in the industry.

As the world transitions out of the COVID context, building supply chain resilience and meeting sustainability targets, as well as leading the way in innovation and digitalization, will be key drivers for success, especially as consumers demand more sustainable solutions without sacrificing availability or convenience.

With an eye on the future, let’s explore three ways that businesses can future-proof their supply chains and remain competitive in a rapidly changing market.

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Increasing resilience with responsible sourcing

Supply chain risks, such as global pandemics, natural disasters, and labor shortages, are becoming more frequent and having greater effects on commerce.

This is expected to continue to define the industry for years to come, and the financial fallout over a decade could be as high as 30% of one year’s EBITDA in the consumer goods sector. However, one of the most effective ways to mitigate these risks is to ensure resilience and sustainability in sourcing practices through independent accreditation.

At Essity, we practice responsible sourcing across our supply chain, ensuring sustainable and resilient business practices among our suppliers according to a Global Suppliers Standard (GSS). All of our raw materials, including fibers, wood pulp, and cotton, are certified by independent organizations like FSC® and PEFC™, emphasizing renewability and habitat health so that the supply of these materials are less susceptible to unforeseen disruptions.

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Sustainable production through innovation and care

Those that will lead the transition to sustainable and innovative supply chains must be willing to push the boundaries of technology in their operations. Many well-established and emerging technologies will define the next few decades of supply chain management, such as IoT, AI, predictive analytics, and revolutionary new production processes that improve sustainability exponentially.

Essity has a long history of innovation in our production and products, leading through digitalization, utilizing dynamic planning at our Supply Chain Center of Excellence in Barcelona, and supporting research institutes such as AI Sweden, of which we are a founding partner.

We are also pioneering groundbreaking new concepts and processes for sustainable tissue manufacturing, including utilizing alternative fibers like wheat straw and piloting new CO2-free production processes partnering with technology company Voith to develop a new way of producing hygiene products to reduce water consumption by up to 95% - and we are also pioneering the use of green hydrogen instead of natural gas in paper making process.

Beyond innovating new technologies, sustainability and safety in the supply chain starts with the individuals who are a part of it. Improving occupational safety and health at work are vital to a thriving supply chain and a supportive work environment, and programs that put these factors first will lead the change. 

Essity’s I Care commitment to employees is a cultural journey towards a safe and healthy work environment that fosters growth, development, and well-being. Our commitment to ethical behavior and sustainable practices is deeply ingrained in our culture, and we seek to establish long-lasting relationships built on trust, collaboration, and respect with our employees, customers, and stakeholders.

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Transforming transport

One of the biggest areas for improvement in the supply chain is transportation. According to the International Energy Agency (IEA), global transport was responsible for 37% of CO2 emissions from end-use sectors in 2021.

To lead the change, Essity is transforming its logistics networks to be cleaner and more sustainable as part of our journey to net zero by 2050. We are shifting the transport balance to more sustainable modes, such as short-sea, rail, and intermodal, and partnering with green logistics programs, governments, and non-governmental organizations to utilize vehicles with lower emissions fuels, such as biodiesel and compressed natural gas.

Looking ahead

As both risks and consumer expectations increase, cutting-edge supply chain management is set to become less predictable and more crucial than ever before. These are just three examples of the myriad ways that businesses can future-proof their supply chains, but those that practice what they preach in terms of sustainability and innovation will lead the transition to a more resilient and cleaner global logistics network.