Day 8: Global Supply Chain

Today you will learn about the global supply chain, why it exists, and how we might positively influence them to solve climate change.

Summary

Explain succinctly what global supply chains are from first principles.

Global supply chains refer to the interconnected networks of companies, manufacturers, suppliers, and distributors involved in the production and distribution of goods and services on a global scale. These chains encompass all the steps from sourcing raw materials, manufacturing, assembly, transportation, warehousing, and retailing until the final product reaches the consumer. Supply chains have become increasingly complex and globalized as companies seek cost efficiencies, access to diverse markets, and specialized resources worldwide.

Why do global supply chains exist? What role does it play in the complex systems of our lives?

Global supply chains exist due to several reasons:

• Economies of scale and specialization: Companies can optimize production costs and efficiency by sourcing materials and labor from different parts of the world where they are most abundant or cost-effective.
• Access to global markets: International supply chains enable companies to reach a wider customer base and expand their market presence globally.
• Diversification and risk management: By operating in multiple countries, companies can reduce their exposure to geopolitical, economic, or environmental risks that may affect a single location.
• Innovation and knowledge transfer: Collaboration across borders allows for the exchange of ideas, technologies, and best practices, fostering innovation and continuous improvement.

Global supply chains have become essential in modern society as they facilitate the availability of a vast array of products and services worldwide, impacting our daily lives in terms of consumption, affordability, and accessibility of goods.

How do global supply chains interact with the problem of climate change?

Global supply chains have significant interactions with climate change:

• Greenhouse gas emissions: The transportation of goods across long distances involves fossil fuel consumption, leading to the release of greenhouse gases (GHGs), such as carbon dioxide and methane, contributing to climate change.
• Deforestation and land-use change: Some supply chains contribute to deforestation and land degradation to meet demands for agricultural commodities, such as soy, palm oil, and beef, which releases stored carbon and reduces carbon sequestration capacity.
• Water use and pollution: Industrial processes and agriculture within supply chains can lead to excessive water usage, pollution, and degradation of freshwater ecosystems, affecting water availability and quality.
• Climate-related disruptions: Climate change-induced extreme weather events (e.g., hurricanes, floods, and wildfires) can disrupt supply chain operations, leading to economic losses and disruptions in the availability of goods.

Global supply chains are both impacted by and contribute to climate change, creating a complex and interconnected relationship with climate-related risks and opportunities.

How might we positively influence global supply chains to help solve climate change?

Positive actions to influence global supply chains and address climate change include:

• Sustainable sourcing and procurement: Encourage companies to adopt sustainable practices by sourcing materials from suppliers that follow environmentally friendly and socially responsible principles.
• Carbon footprint reduction: Promote the adoption of cleaner transportation methods (e.g., electric vehicles, alternative fuels) and energy-efficient manufacturing processes within the supply chain.
• Circular economy approach: Advocate for a circular economy where products are designed for durability, repairability, and recycling to minimize waste and resource depletion.
• Supply chain transparency: Push for increased transparency within supply chains to ensure that environmental and social impacts are disclosed and addressed.

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Additional Resources

Books:

• "The Climate Nexus: Water, Food, Energy, and Biodiversity" by Jon O'Riordan, Robert William Sandford, and E. Mark Lee - This book explores the interconnectedness of global supply chains and the impacts of climate change on critical resources like water, food, energy, and biodiversity.
• "The Sustainability Secret: Rethinking Our Diet to Transform the World" by Keegan Kuhn and Kip Andersen - While not exclusively about supply chains, this book delves into the environmental impacts of our food choices and highlights the role of global supply chains in the agriculture and food sectors.
• "The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage" by Yossi Sheffi - This book discusses how businesses can build resilience into their supply chains to cope with climate change-related disruptions and foster long-term sustainability.

Courses:

• Sustainable Supply Chain Management by Rutgers - This course covers sustainable practices in supply chain management, including climate change considerations and strategies for reducing environmental impacts.
• Supply Chain Fundamentals by MITx - While not solely focused on climate change, this course offers a comprehensive understanding of global supply chains and their role in today's economy.
• Climate Change and Resilience in Food Systems by University of Leeds - This course examines the links between climate change, food production, and supply chains, emphasizing the need for sustainability.

Scholars:

• Dr. Edgar E. Blanco - An expert in supply chain management and sustainability, Dr. Blanco has conducted extensive research on the environmental and social impacts of global supply chains.
• Dr. Dara O'Rourke - Known for his work on environmental sustainability and supply chain transparency, Dr. O'Rourke's research focuses on corporate responsibility and social impacts in global supply chains.
• Dr. Hau L. Lee - A renowned scholar in supply chain management, Dr. Lee has studied climate change's implications on supply chain design and risk management.

Videos:

• "The True Cost" - This documentary film explores the environmental and social impacts of the fast fashion industry and its supply chains.

Podcasts:

• "Supply Chain Now" - This podcast covers various aspects of supply chain management, including discussions on sustainability, climate change, and resilience.
• "The Circular Economy Podcast" by the Ellen MacArthur Foundation - While not solely focused on supply chains, this podcast explores circular economy principles, which are relevant to sustainable supply chain practices.

Top Skills To Learn

The following skills are recommend to learn:

• Sustainable business and supply chain management: Understand the principles of sustainable business practices and supply chain management, including assessing environmental impacts, optimizing logistics, and implementing circular economy approaches.
• Data analysis and modeling: Master data analysis techniques and modeling tools to assess supply chain emissions, identify areas for improvement, and develop strategies for reducing carbon footprints.
• Stakeholder engagement and advocacy: Learn effective communication and advocacy skills to engage with companies, policymakers, and stakeholders to promote sustainability, transparency, and climate action within global supply chains.

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Activity

Activity: Trace Product Supply Chains

Description: Choose a product you use daily (e.g., smartphone, clothing, food item) and research its supply chain. Investigate the different stages, countries involved, and the carbon footprint associated with each step. Reflect on how climate change impacts, such as extreme weather events or resource availability, could affect this supply chain and its overall sustainability.

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Skill Lesson Mastered

Demonstrate mastery of the knowledge and skills presented in this lesson by applying it to the above activity. If, and only if, you have a full understanding and have mastered the knowledge and skills presented in this lesson, select the next lesson in the navigation.