{"id":2799,"date":"2023-02-09T11:03:47","date_gmt":"2023-02-09T10:03:47","guid":{"rendered":"https:\/\/lucianoattolico.it\/blog\/economic-and-human-sustainability-in-the-supply-chain-is-digitization-enough\/"},"modified":"2024-11-16T11:52:19","modified_gmt":"2024-11-16T10:52:19","slug":"economic-and-human-sustainability-in-the-supply-chain-is-digitization-enough","status":"publish","type":"post","link":"https:\/\/lucianoattolico.it\/en\/blog\/economic-and-human-sustainability-in-the-supply-chain-is-digitization-enough\/","title":{"rendered":"<strong>Economic and Human Sustainability in the Supply Chain. Is digitization enough? <\/strong>"},"content":{"rendered":"<div class=\"wp-block-image is-style-default\">\n<figure class=\"aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/sostenibilita-economica-e-umana.jpeg\" alt=\"economic and human sustainability in the supply chain\" class=\"wp-image-2103\" width=\"1200\" height=\"339\"\/><\/figure>\n<\/div>\n<hr class=\"wp-block-separator has-text-color has-white-color has-alpha-channel-opacity has-white-background-color has-background\"\/>\n\n<p>In an increasingly competitive world, companies must do everything to stay ahead of the curve.<\/p>\n\n<p>Many companies rightly see <strong>digitization<\/strong> as one of the ways to do this, as it enables them to optimize the supply chain <strong>while reducing costs<\/strong> and <strong>increasing productivity<\/strong>. Above all, because the time associated with finding and processing data is reduced and as a result a number of transactional decisions and operations along the entire value chain are expedited. <\/p>\n\n<p>However, digitization alone is not enough to ensure human, economic and <strong>supply chain<\/strong> sustainability.<\/p>\n\n<p>To achieve a sustainable supply chain, it is still increasingly necessary to <strong>eliminate the waste <\/strong>that lurks within the organization, in management processes and often in the &#8220;unsustainable&#8221; way of thinking of many people. <br\/>We know from the literature that any activity that does not add value to the final product or service is considered waste.<\/p>\n\n<hr class=\"wp-block-separator has-text-color has-white-color has-alpha-channel-opacity has-white-background-color has-background\"\/>\n\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile is-image-fill\" style=\"grid-template-columns:auto 44%\"><div class=\"wp-block-media-text__content\">\n<p>Speaking of waste, we cannot remain indifferent to the <strong>staggering figures<\/strong> of waste in the queen of Supply Chains: the food chain. <br\/>According to the<a href=\"https:\/\/www.unep.org\/resources\/report\/unep-food-waste-index-report-2021\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>UNEP Food Waste Index<\/strong> <strong>2021<\/strong><\/a>, some 931 million tons of<strong> food waste<\/strong> were generated in 2019, coming to the conclusion that 17 percent of global food production is in fact not used and becomes, therefore, waste. <br\/>In the European Union alone, 10% of all food produced is not used, it is wasted. Paradoxical, if we think that at the same time, again in Europe, some 36.2 million people cannot afford a quality meal every other day. <\/p>\n<\/div><figure class=\"wp-block-media-text__media\" style=\"background-image:url(https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-anna-shvets-3645591-683x1024.jpeg);background-position:47% 21%\"><img loading=\"lazy\" decoding=\"async\" width=\"683\" height=\"1024\" src=\"https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-anna-shvets-3645591-683x1024.jpeg\" alt=\"global food production, food waste and supply chain, food chain waste\" class=\"wp-image-2087 size-full\" srcset=\"https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-anna-shvets-3645591-683x1024.jpeg 683w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-anna-shvets-3645591-200x300.jpeg 200w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-anna-shvets-3645591-768x1152.jpeg 768w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-anna-shvets-3645591-1024x1536.jpeg 1024w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-anna-shvets-3645591-1365x2048.jpeg 1365w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-anna-shvets-3645591-97x146.jpeg 97w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-anna-shvets-3645591-33x50.jpeg 33w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-anna-shvets-3645591-50x75.jpeg 50w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-anna-shvets-3645591-scaled.jpeg 1707w\" sizes=\"auto, (max-width:767px) 480px, 683px\" \/><\/figure><\/div>\n\n<hr class=\"wp-block-separator has-text-color has-white-color has-alpha-channel-opacity has-white-background-color has-background\"\/>\n\n<h2 class=\"wp-block-heading\"><strong>Causes of waste in production<\/strong><\/h2>\n\n<p>Among the <strong>causes<\/strong> of this waste we can find factors related to improper supply chain management:<\/p>\n\n<ul class=\"wp-block-list\">\n<li><strong>Inventory management issues for manufacturers and retailers<\/strong>;<\/li>\n\n\n\n<li><strong>Overproduction or lack of demand for certain products at certain times of the year<\/strong>;<\/li>\n\n\n\n<li><strong>Production errors<\/strong>;<\/li>\n\n\n\n<li><strong>Inadequate storage\/transport at all stages of the food chain<\/strong>.<\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\"><strong>How to achieve a sustainable supply chain?<\/strong><\/h2>\n\n<p>Eliminating waste in the supply chain is one of the most effective ways to ensure a sustainable supply chain. Eliminating waste in the supply chain can help companies to:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>reduce <strong>costs<\/strong>,<\/li>\n\n\n\n<li>Improve the <strong>quality of<\/strong> products and services,<\/li>\n\n\n\n<li>Increasing <strong>productivity<\/strong>,<\/li>\n\n\n\n<li>Reduce <strong>environmental<\/strong> <strong>impact<\/strong>,<\/li>\n\n\n\n<li>Reduce <strong>production<\/strong> <strong>interruptions<\/strong>,<\/li>\n\n\n\n<li>Increase <strong>customer<\/strong> <strong>satisfaction<\/strong>,<\/li>\n\n\n\n<li>Increase <strong>profitability<\/strong>,<\/li>\n\n\n\n<li>Improve <strong>corporate<\/strong> <strong>reputation<\/strong> and become more competitive.<\/li>\n<\/ul>\n\n<hr class=\"wp-block-separator has-text-color has-white-color has-alpha-channel-opacity has-white-background-color has-background\"\/>\n\n<div class=\"wp-block-media-text alignwide is-stacked-on-mobile is-vertically-aligned-center is-image-fill\" style=\"grid-template-columns:35% auto\"><figure class=\"wp-block-media-text__media\" style=\"background-image:url(https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-karolina-grabowska-5632384-683x1024.jpeg);background-position:58% 72%\"><img loading=\"lazy\" decoding=\"async\" width=\"683\" height=\"1024\" src=\"https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-karolina-grabowska-5632384-683x1024.jpeg\" alt=\"Logistics and supply chain, how to increase profitability\" class=\"wp-image-2086 size-large\" srcset=\"https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-karolina-grabowska-5632384-683x1024.jpeg 683w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-karolina-grabowska-5632384-200x300.jpeg 200w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-karolina-grabowska-5632384-768x1152.jpeg 768w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-karolina-grabowska-5632384-1024x1536.jpeg 1024w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-karolina-grabowska-5632384-1365x2048.jpeg 1365w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-karolina-grabowska-5632384-97x146.jpeg 97w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-karolina-grabowska-5632384-33x50.jpeg 33w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-karolina-grabowska-5632384-50x75.jpeg 50w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/pexels-karolina-grabowska-5632384-scaled.jpeg 1707w\" sizes=\"auto, (max-width:767px) 480px, 683px\" \/><\/figure><div class=\"wp-block-media-text__content\">\n<p><strong>In the area of logistics and supply chain, we can unfortunately find frequent macroscopic errors. In Italy, many companies treat suppliers as &#8220;commodities,&#8221; and often their main goal in purchasing negotiations is simply the lowest price.<\/strong><\/p>\n<\/div><\/div>\n\n<hr class=\"wp-block-separator has-text-color has-white-color has-alpha-channel-opacity has-white-background-color has-background\"\/>\n\n<p>In a project, led with my company <strong><a href=\"https:\/\/www.lenovys.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Lenovys<\/a><\/strong>, for a <strong>multinational big process manufacturer<\/strong> (678M turnover in Italy) brilliant results were achieved in terms of <strong>improving line efficiency<\/strong> and <strong>reducing waste in production<\/strong>, key drivers for corporate economic sustainability.<br\/>The project also had expansion in the logistics and supply chain area. Actions have been put in place to <strong>reduce stocks<\/strong> nationwide in a way that is sustainable over time-that is, by solving the root of the problems that made them necessary.<\/p>\n\n<h2 class=\"wp-block-heading\"><strong>Is reducing inventories in the company possible?<\/strong><\/h2>\n\n<p>How was it possible to reduce the company&#8217;s stocks?<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Step 1: <strong>Insight into the problem<\/strong><br\/> Detailed inventory analysis to identify <strong>causes<\/strong> and <strong>waste<\/strong> along the supply chain<\/li>\n\n\n\n<li>Step 2: <strong>&#8220;Deployment&#8221; i.e., decomposition of stocks according to their respective causes<\/strong><br\/> What are the &#8220;justified&#8221; stock levels? Which stocks need to be eliminated?<\/li>\n\n\n\n<li>Step 3: <strong>Analysis of stock values<\/strong><br\/> <strong> Problem solving<\/strong> to analyze in depth the individual root causes generating high stock levels and <br\/> identify possible countermeasures<\/li>\n\n\n\n<li>Step 4: <strong>Definition of critical areas and articulated development of solutions<\/strong><br\/> &#8211; Inter-functional improvement teams were chosen to apply problem solving and<br\/> &#8211; <strong>PDCA<\/strong> cycles so as to identify in detail causes of waste and define countermeasures<\/li>\n<\/ul>\n\n<p>These in-depth analysis steps led the team to <strong>see waste that was not previously apparent<\/strong> and allowed them to clearly identify priorities for action.<br\/>Initially, everyone was convinced that the main reason why the current level of stock was essential was related to production or delivery batches, which were too high to allow for reduced inventories; however, by quantifying these root causes, the team realized that this factor weighed only a small percentage of the total value in stock!<br\/><strong>Far more important, however, were the unoptimized planning process and its operating parameters, such as planning frequencies and safety stocks.<\/strong><\/p>\n\n<h2 class=\"wp-block-heading\"><strong>Results of inventory reduction in Supply Chain<\/strong><\/h2>\n\n<p>In the first year of countermeasures implementation alone, the<strong>company reduced stocks by 25 percent in raw materials<\/strong> and in finished product by 33 percent. This improvement has also been appreciated in subsequent years, <strong>securing new opportunities for the company<\/strong>.<\/p>\n\n<p><strong>Human<\/strong>, <strong>economic<\/strong> and <strong>environmental<\/strong> <strong>sustainability<\/strong> is a top priority for many companies.<br\/>If companies adopted <strong>sustainable practices<\/strong>, they could help reduce environmental impact, <strong>increase productivity<\/strong> and <strong>improve the quality of life for workers<\/strong>. In addition, inventory optimization, in-depth <strong>supply chain<\/strong> analysis, and some countermeasures to eliminate overproduction can help companies better manage resources, reduce costs, and increase security of supply. <strong>This can help create a more sustainable future for all.<\/strong><\/p>\n\n<p><\/p>\n\n<hr class=\"wp-block-separator has-text-color has-white-color has-alpha-channel-opacity has-white-background-color has-background\"\/>\n\n<hr class=\"wp-block-separator has-text-color has-white-color has-alpha-channel-opacity has-white-background-color has-background\"\/>\n\n<p><\/p>\n\n<p><\/p>\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:33.33%\">\n<figure class=\"wp-block-image size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/lucianoattolico.it\/wp-content\/uploads\/2022\/11\/solo-libro-management-incertezza.png\" alt=\"Management in the age of uncertainty\" class=\"wp-image-1987\" width=\"351\" height=\"392\" srcset=\"https:\/\/lucianoattolico.it\/wp-content\/uploads\/2022\/11\/solo-libro-management-incertezza.png 701w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2022\/11\/solo-libro-management-incertezza-268x300.png 268w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2022\/11\/solo-libro-management-incertezza-131x146.png 131w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2022\/11\/solo-libro-management-incertezza-45x50.png 45w, https:\/\/lucianoattolico.it\/wp-content\/uploads\/2022\/11\/solo-libro-management-incertezza-67x75.png 67w\" sizes=\"auto, (max-width:767px) 351px, 351px\" \/><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:66.66%\">\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>In my latest book, &#8220;Management in the Age of Uncertainty,&#8221; <strong>I explore managerial strategies for being more flexible in every part of the company<\/strong> in such a complex, uncertain and variable period as the one we are living in.<\/p>\n\n\n\n<p><strong>Practical insights and strategies<\/strong> to make the company more compact and strong, to make <strong>better decisions<\/strong>, to <strong>innovate and experiment<\/strong> with greater market impact, and to better manage <strong>personal and business change<\/strong>.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-fill\"><a class=\"wp-block-button__link has-white-color has-luminous-vivid-orange-to-vivid-red-gradient-background has-text-color has-background wp-element-button\" href=\"https:\/\/lucianoattolico.it\/en\/management-in-the-age-of-uncertainty\/#pre-ordina\" target=\"_blank\" rel=\"noreferrer noopener\">Download the preview now<\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n\n<ul class=\"wp-block-list\">\n<li>Photo credits: Pexel &amp; AI Dall-E<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>In this article, Luciano Attolico discusses the consequences of supply chain digitization. Attolico states that digitization is not sufficient to ensure the balance between economic sustainability and human sustainability. To achieve the balance and obtain the best results, Attolico proposes business management based on three elements: a holistic approach within the organization, increased awareness among partners, and increased flexibility in process management. To support his thesis, Attolico offers a series of concrete examples drawn from companies that have achieved success in implementing these solutions. This article offers a general and practical overview of the topic, providing valuable suggestions on how to manage supply chains in a more sustainable way from both an economic and human perspective.    <\/p>\n","protected":false},"author":2,"featured_media":2748,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[70,68],"tags":[86,69,93,88,95,85,96,83,92,94],"class_list":["post-2799","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-management","category-management-en","tag-crisis","tag-lean-en","tag-logistics","tag-operational-methodology","tag-pdca-en","tag-planning","tag-problem-solving-en","tag-strategy","tag-supply-chain-en","tag-waste-in-production"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Economic and Human Sustainability in the Supply Chain. Is digitization enough?  | Luciano Attolico | Strategia Lean Lifestyle<\/title>\n<meta name=\"description\" content=\"How digital technology can be used to improve product traceability and supply chain transparency to create more efficient and sustainable management over time. How to make the supply chain economically and humanly sustainable?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/lucianoattolico.it\/en\/blog\/economic-and-human-sustainability-in-the-supply-chain-is-digitization-enough\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Economic and Human Sustainability in the Supply Chain. Is digitization enough?\" \/>\n<meta property=\"og:description\" content=\"Not only digitization to achieve efficient and sustainable supply chain management. How to make the supply chain economically and humanly sustainable?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/lucianoattolico.it\/en\/blog\/economic-and-human-sustainability-in-the-supply-chain-is-digitization-enough\/\" \/>\n<meta property=\"og:site_name\" content=\"Luciano Attolico | Strategia Lean Lifestyle\" \/>\n<meta property=\"article:published_time\" content=\"2023-02-09T10:03:47+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-11-16T10:52:19+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/lucianoattolico.it\/wp-content\/uploads\/2023\/02\/sostenibilita-economica-e-umana.jpeg\" \/>\n<meta name=\"author\" content=\"Luciano Attolico\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/lucianoattolico.it\/en\/blog\/economic-and-human-sustainability-in-the-supply-chain-is-digitization-enough\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/lucianoattolico.it\/en\/blog\/economic-and-human-sustainability-in-the-supply-chain-is-digitization-enough\/\"},\"author\":{\"name\":\"Luciano Attolico\",\"@id\":\"https:\/\/lucianoattolico.it\/en\/#\/schema\/person\/ad96b228100868cedb712bd5032d678c\"},\"headline\":\"Economic and Human Sustainability in the Supply Chain. 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