NEWSLETTER

March 2024

Editorial

Amidst a rapidly evolving global supply chain landscape, March witnessed notable developments across various industries. Intel's new chip foundry reflects CEO Pat Gelsinger's mission for sustainable supply chains, addressing energy efficiency amid AI growth. Meanwhile, Apple supplier Rayprus eyes a Bengaluru facility, aligning with Apple's diversification efforts and Foxconn's investment in India. In the EV sector, Ford, Mercedes, and Tesla lead in clean supply chains, showing progress in reducing emissions and human rights violations. UPS's win of the US Postal Service contract and Walmart's offer of route optimization tech highlight expansions beyond traditional roles. On the geopolitical front, Logistics UK's call for a dedicated minister and President Biden's supply chain resilience order indicate efforts to drive economic growth and enhance supply chain strength. The EU's support for a supply chain audit law reflects a shift towards sustainability and responsible sourcing practices. Amid these developments, the aftermath of the Baltimore bridge collapse disrupts East Coast logistics. Finally, Industry Minister's visit to Mongolia aims to strengthen UK critical minerals supply chains, marking a milestone in diplomatic relations. In sustainability, GIS technology enhances supply chain efficiency, while companies focus on sustainable packing materials and renewable sourcing. The UK solar industry and H&M Group reinforce commitments to sustainable supply chains, while Herbalife India's partnership with IIMB aims to drive sustainable practices through research and collaboration.

Company Focus

Intel’s new chip foundry for the AI age builds on CEO Pat Gelsinger’s mission to establish sustainable supply chains

The growth potential of AI is accompanied by a significant increase in energy demand, with data centers projected to double their electricity consumption in the next two years, equivalent to Japan's total energy usage.
Nvidia's advancements in GPU technology, while promising greater capabilities, raise concerns about energy consumption, prompting the industry to explore partnerships like Nvidia relying on Intel's sustainable chip manufacturing to address energy efficiency

Apple supplier Rayprus eyeing Bengaluru facility

Rayprus Technologies, a supplier for Apple specializing in precision camera and lens solutions, is in advanced talks with Foxconn to establish a manufacturing facility within the new Foxconn campus in Bengaluru, indicating a significant step in Apple's efforts to diversify its supply chain in India.
This move aligns with Foxconn's substantial investment in Bengaluru and Apple's strategy to reduce reliance on China for manufacturing, reflecting a shift towards a manufacturing model akin to the 'Nokia model', where multiple specialized suppliers are housed within the same facility for enhanced efficiency and quality control.

Ford, Mercedes, and Tesla have the least problematic EV supply chains

Ford, Mercedes-Benz, and Tesla rank highest among 18 global automakers in efforts to eliminate carbon emissions, environmental harms, and human rights violations from their supply chains, with US automakers, particularly Ford, showing the most
Despite overall progress in cleaning up supply chains, major gaps persist in human rights practices, particularly concerning Indigenous rights, and average scores across indicators remain low, indicating a need for more serious efforts to reduce carbon emissions and embrace human rights in the auto industry.

UPS wins US Postal Service air cargo contract, usurping FedEx

UPS has secured a deal with the U.S. Postal Service (USPS) to become its primary provider of air cargo transportation, replacing FedEx Express.
The new contract, with a five-and-a-half-year minimum base term, will commence the day after FedEx Express's contract expires on Sept. 29, but further terms and value were not disclosed.

Walmart letting businesses tap into its route optimization tech

Walmart launches route optimization software through its Walmart Commerce Technologies unit, expanding beyond retail.
Entering a competitive market, Walmart aims to leverage its technology to reduce emissions and empty fleet miles for various industries, including fleet operators, lumber, and medical device companies.

Country Focus

Logistics UK calls for dedicated logistics and supply chain minister

Logistics UK advocates for the appointment of a dedicated minister for logistics and supply chain by the UK government to drive future economic growth across various sectors, emphasizing the vital role of logistics in supporting the country's economy.
The organization's manifesto highlights the public's perception that the government is not doing enough to support the transport sector and underscores the importance of logistics in delivering goods efficiently and cost-effectively. They propose the establishment of a cross-Whitehall Logistics Productivity Forum and call for various reforms and investments to ensure continued growth, job creation, and sustainability within the logistics industry.

Supply chain chaos threatens the East Coast after Baltimore bridge collapse

The collapse of Baltimore's Francis Scott Key Bridge due to a cargo ship collision has caused significant disruptions to the local region's supply chains, impacting logistics, distribution, and warehousing.
The fallout extends beyond the immediate vicinity of the port, affecting East Coast supply chains with short-term congestion and delays at other ports as container ships are diverted, potentially leading to long-term impacts on global supply chains, as shipping companies may redirect routes from Northeast Asia to West Coast ports.

Industry Minister makes historic visit to Mongolia to boost UK critical minerals supply chains

UK Industry Minister Nusrat Ghani visits Mongolia to strengthen ties and explore opportunities for UK mining businesses in the critical minerals supply chain.
The visit commemorates the 60th anniversary of the UK establishing diplomatic relations with Mongolia and aims to bolster trade relations, promote UK renewable energy sectors, and discuss investment opportunities in critical minerals supply chains.

EU backs supply chain audit law after Italy switches sides

European Union governments have backed a proposed law requiring large companies to conduct due diligence on their supply chains to prevent forced labor and environmental damage, with Italy changing its stance to support the measure.
The corporate sustainability due diligence directive (CSDDD) received backing from a qualified majority of EU countries, with no votes against, after Italy previously abstained from supporting the law. The law aims to address forced labor affecting over 20 million people worldwide and environmental concerns by requiring large companies to identify and take action against such practices in their supply chains.

President Biden’s supply chain resilience executive order signals work for U.S. businesses

President Biden's Executive Order on supply chain resilience marks a significant shift for U.S. businesses, emphasizing collaboration and investment in critical areas to enhance supply chain strength and resilience.
Key themes of the Executive Order include the creation of new cross-governmental supply chain data-sharing capabilities, domestic investment in critical areas such as energy manufacturing and recycling, and deepening engagement with allies to strengthen global supply chains, all aimed at addressing vulnerabilities and enhancing stability in the supply chain.

Sustainability

Is a sustainable, profitable supply chain within reach?

Global supply chains suffer from inefficiency due to a lack of data-based decision support and information sharing, exacerbated by the complex network of companies involved in logistics, highlighting the critical need for real-time visibility and analysis.
Incorporating geographic information system (GIS) technology into logistics operations enables real-time visibility, scenario planning, and reliable data analysis, leading to efficiency gains, reduced environmental impact, and improved resilience against disruptions in the supply chain.

Packing materials and supply chain sustainability

Many organizations are utilizing recycled or reused packing materials, with the median reporting 80% of total annual packing material consumption sourced from recycled or reused materials, indicating a positive trend towards sustainability in packaging practices.
However, there is still room for improvement in leveraging renewable packing materials, with only 60% of packing materials coming from renewable sources on average. Companies utilizing renewable materials have the opportunity to enhance their sustainability efforts and appeal to environmentally conscious consumers while reducing harmful waste in the supply chain.

UK Solar Industry bolsters pledge to sustainable supply chains

55 UK solar industry companies and organizations commit to Solar Stewardship Initiative for sustainable supply chains, aiming for transparency, social responsibility, and environmental conservation.
Solar Energy UK CEO emphasizes the importance of upholding human rights and environmental standards, while creating sustainable supply chains, which could boost investor confidence and support the rollout of solar technologies globally.

H&M group prioritises sustainable sourcing to hit targets

H&M Group's 2023 Annual and Sustainability Report highlights achievements including 85% sustainable material sourcing and a 22% reduction in greenhouse gas emissions.
The company aims for a 56% reduction in GHG emissions by 2030 and reached 22% reduction in 2023, while also striving for 100% of materials to be recycled or sustainably sourced by 2030.

Herbalife India partners with IIMB to drive sustainable supply chain practices

Herbalife India partners with IIM Bangalore to establish a Supply Chain Sustainability Lab aimed at advancing sustainable practices through research and development initiatives.
The lab focuses on knowledge creation, expert consulting, collaborative ecosystem building, and practical tools development, such as the Transportation Emission Measurement Tool (TEMT), to empower businesses in minimizing their carbon footprint and fostering a greener future.

Sources

https://www.supplychaindive.com/
https://www.theverge.com/
https://sustainabilitymag.com/
https://www.gov.uk/
https://www.aircargonews.net/
https://www.solarpowerportal.co.uk/
https://fortune.com/
https://www.pymnts.com/
https://www.reuters.com/
https://www.forbes.com/
https://www.sdcexec.com/
https://www.thehindu.com/
https://economictimes.indiatimes.com/