For virtually every company, the application of high social and environmental standards is part of sustainable management. In the Mondi Group, too, this has been a fixed component of the corporate strategy for many years, says Beatrix Praeceptor, chief purchaser of the Austrian paper and packaging group. That is why sustainability also plays a role in procurement and in dealing with suppliers. In practice this means, as Praeceptor explains, "that it is up to every purchaser to ensure that whatever we source - products or services - meets the requirements that we have as a producer and supplier as well as a player in the marketplace Imposing industry. "For the globally operating packaging and paper company with around one hundred factories and 40.000 suppliers, this is no easy task.
Digital solutions help to preserve clarity and accelerate processes. Highest expectations are currently being placed by the industry in Blockchain, a breakthrough technology for the irrevocable storage of data along a digital chain, allowing all system participants to survey and verify the input of everyone else. For the time being, however, Beatrix Praeceptor has found no application for her range at Mondi in Blockchain. In fact, the technology is still in its infancy, is complex in implementation and not free from open questions. The central problem is the interface between the physical and the digital world.
Nevertheless: Blockchain and Co. are booming, pilot projects in various sectors are mushrooming and driving development. One of the most ambitious initiatives is Fishcoin, which is being driven by an international panel of experts to make seafood trafficking traceable, thus undermining unfair practices. The project is supported, among others, by the international sustainability consultant Business for Social Responsibility BSR. BSR manager Tara Norton recently reported in Vienna that many companies are currently testing how far new techniques are suitable to prove that their supply chains are free from forced labor, human trafficking or corruption (more in the interview).
For Mondi, digitization from supply chain management is "becoming an integral part of managing complexity and data volumes," says Praeceptor. Sustainable procurement is an activity that goes far beyond the demand for sustainability certificates from suppliers. Risk prevention must be taken hand in hand so that processes do not falter, when suppliers get into scheduling or payment difficulties, fail or retire due to non-compliance with standards. And all this in an environment in which economic aspects count, the markets are subject to different dynamics, the window of opportunity for purchasing is shorter, and legislation becomes more and more in addition to societal expectations. "The pounding of legal requirements around the world is one of the biggest external challenges for purchasing. Almost every month, new aspects are added. Staying up-to-date and looking at how to do that requires great effort and flexibility, "says Praeceptor.
Mondi operates its supplier management, like many other companies, on the basis of a Code of Conduct, which suppliers sign and verify compliance with. Currently, supplier master data management is centralized. "This will allow us to ensure that all new suppliers are undergoing a proper access process that is increasingly being offered online." Suppliers will then pre-communicate certifications and other relevant data in advance, and Mondi will benefit from completing a quick and accurate selection process.
At the same time, Praeceptor is working to improve risk management in order to be able to respond more effectively through greater transparency. The current system still works excel-based, but is already linked to Google or insurance databases that screen supply chains for events such as accidents or strikes. Praeceptor: "Of course, I could turn off ten people who constantly do nothing but see if they find any relevant news anywhere. But if that makes an algorithm or a robot, it's more efficient, and my team can learn about how to deal with the risks that arise. "She is currently testing an early warning system and the training has started. If it proves itself, the system should be rolled out efficiently and safely in one or two years, whether with its own platform or with an external partner, is still open.
Interview with Tara Norton, Business for Social Responsibility
Suppliers are not lacking, as Praeceptor says. In Austria, 2017-based start-up Prewave is making headlines with a new application of artificial intelligence for risk identification and forecasting along the supply chain. According to founder Lisa Smith, Prewave wants to "make reactive sustainability management proactive" with the global information service covering a total of eight risk categories (more in the interview).
Products with story
A promising area of application for blockchain is the consumer goods sector, where supply chains, from producers to wholesalers, logistics providers, retailers and customers, can include a large number of players, creating gray areas. Blockchain sheds light on the event by connecting all stakeholders in real time through a unified format, and also allows a largely automated recording of the process. The valid traceability of products, conventionally difficult and tedious, becomes a matter of the second. Corporations like Nestlé or Carrefour have taken on Blockchain. World market leader Walmart plans to implement the technology widely in fresh fruit and vegetables in order to be able to quickly clear up food-borne illnesses and initiate product recalls without unnecessarily punishing producers.
The inclusion of the end user in the blockchain via the QR code on the packaging enables companies to reap additional benefits: the British fashion label Jarglaard wanted to increase the buyer's appreciation for the product by being close to the producers, the Dutch food chain Albert Heijn wants thus strengthening consumer confidence in the product (see text below).
A study on use cases and potentials of Blockchain in the trade, presented by the trade association with the Austrian Institute of Technology AIT and the credit agency CRIF in April 2018, showed that Austrian consumers are open to blockchain applications, a large part can imagine the use of a corresponding app , Trade association managing director Rainer Will therefore wishes that also the domestic trade ventures on innovative pilot projects, in order to profit from the development. The new Austrian Blockchain Center will be available as a scientific partner from 2019.
With its check-your-product service, the German chain Aldi Süd and its Austrian subsidiary Hofer have virtually anticipated the transparency movement in retail - without block chain. The service was introduced to 2014 and works today, database-based, in principle for fish, meat, eggs and soybeans. Access to the information is provided by a tracking code. In the case of a pack of frozen shrimp, one can learn that these seafood come from Ecuador, specifically from the Guayas region, that they were semi-intensive and biologically grown in the pond and processed by Escal in Strasbourg. All in all: It does not always have to be blockchain, if more far-reaching objectives are missing, a conventional database is sufficient. This too is a result of the study of the trade association.
Blockchain pilot in the fashion world
"Knitted for Martine Jarlgaard from Gray-shy and camel colored alpaca wool from Two Rivers Mill, "was the initial information on a sweater from the London-based designer, followed by reports with photos and timestamps for each step in the supply chain, submitted by the respective editor. The information is available on the label via a QR code. Jarglaards wanted to "open a window into a world that had previously been unknown and therefore insignificant". It implemented the pilot project 2017 with the British block label company Project Provenance.
Blockchain tool for fresh produce
The Dutch supermarket chain Albert Heijn and the juice and fresh beverage bottler Refreshment have with the commodity company Louis Dreyfus This year, Blockchain technology introduced into the supply chain of Albert Heijn's own brand of orange juice. Since September 2018, customers can currently access the entire route of the product - and thus also learn which standards are used at each interface. Alfred Heijn Sales Manager Marit von Egmond believes in transparency in the supply chain is more important, as the next product to be tracked the eggs. The technology was developed with the Dutch company Supply Chain Information Management SIM.