Brands and consumer product companies are planning to dole out more money on technology to align operations with sustainability goals while also driving business growth. The study, from IBM and the Consumer Goods Forum, found that brand executives are focused on “improving supply chain operations, leveraging analytics, AI and other technologies in an effort to drive greater efficiencies” to reach their goals.
The survey found that 34 percent of those polled plan to increase spending on technology over the next three years to operationalize sustainable practices. Seventy-seven percent of respondents agreed that sustainability investments will accelerate growth.
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The 32-page report also spotlights successful executions of companies leveraging technology to align sustainability goals with operations. The case studies include brands such as Levi Strauss & Co., Pandora, Reckitt, Unilever and Walmart.
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Ruediger Hagedorn, end-to-end value chain director at the Consumer Goods Forum, said the report “provides valuable insights into what determines decision-making at the boardroom level globally, which will shape our future.” The study, titled “Redesigning brand values: Purpose and profit converge in core operations,” is based on the responses of 1,800 consumer goods executives across 23 countries.
Other key takeaways from the report include that 61 percent of those polled “are purposefully aligning sustainability and operational goals to optimize investments and efforts,” the report’s authors said, adding that nearly 75 percent of respondents “agree on the need to recalibrate how they measure and report on sustainability targets. However, many lack the capabilities to monitor and measure progress in real time.”
When asked which technologies would play a role in aligning sustainable practices with operations, automation came in at 71 percent and was followed by analytics at 69 percent, IoT at 62 percent, AI at 55 percent and intelligent workflows at 44 percent. “As they revamp their supply chain operations, 67 percent cite the use of predictive and prescriptive analytics and AI-powered demand sensing (69 percent) to improve inventory management and eliminate excess stock,” the report’s authors said. “They are also applying AI-enabled workflows (70 percent) and are beginning to adopt the emerging technology of digital twins (26 percent) to drive efficiencies.”
Luq Niazi, global managing partner for industries at IBM, said being successful requires full integration, commitment and collaboration. “In today’s world, consumers actively seek out brands that reflect their values, making sustainability integration an important differentiator for consumer goods businesses and the retailers they service,” Niazi said. “Meaningfully embedding sustainability into brand operations can only be achieved through a robust combination of business process, technology, ecosystem partnerships and C-suite collaboration across manufacturing, technology, operations, supply chain and sustainability.”
Niazi said by embracing a holistic approach, “consumer industry executives can help drive sustainable business performance to tap into a larger share of consumer spending.”