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Supply Chain Resilience and Sustainability – Partners or Adversaries?

One of the most critical lessons learned during the global pandemic and its aftermath has been the importance of supply chain resilience. As organizations have been coming to grips with this reality, they have also been working hard toward achieving the goal of sustainability. The good news is that these two goals are not mutually exclusive—in fact, sustainability can be a big part of building a more resilient supply chain.

 

What Is Supply Chain Resiliency?

A supply chain’s resilience is determined by its ability to adapt to and recover from disruption. The world has seen supply chain disruption at unprecedented levels over the past three years, starting with the global COVID-19 pandemic. This has continued with ongoing regional COVID-19 lockdowns, overloaded ports, restricted supplies of computer chips, rising fuel costs, extreme weather events, and war in Ukraine.

 

The Cost of Supply Chain Disruption

The cost to companies that lack supply chain resilience is immense. According to a 2022 paper on the subject published by MIT Sloan School of Management, disruption is not going away. Researchers found that companies can expect disruptions lasting a month or more to happen at least once every four years. Over the course of a decade, a lack of supply chain resilience will cost the average company 45% of one year’s profit.

 

The Pandemic Adds to a Growing List of Notable Supply Chain Disruptions

The COVID-19 pandemic, which began in 2020, is the most famous and long-lasting example of a supply chain disruption. However, as a McKinsey report at the time pointed out, it is just the latest in a long list of shocks to the global supply chain. Among the other notable examples over just the past decade or so are: 

  •   The 2011 earthquake and tsunami in Japan that shut down factories building components for cars and knocked the world’s largest producer of advanced silicon wafers offline
  •   2011 floods in Thailand that kneecapped the global PC industry by shutting down factories that produced one-quarter of the world’s hard drives
  •   2017’s Hurricane Harvey hit Texas and Louisiana—home to some of the country’s largest oil refineries and petrochemical factories—resulting in resin and plastics shortages

 

The Need For More Supply Chain Resilience in the Supply Chain

 Supply chain resiliency isn’t just protection against what seems like an endless series of disasters. It’s good business, and it gives your company a competitive advantage.

 

What Is Supply Chain Sustainability?

Sustainability has been a buzzword in recent years, and it’s now a crucial consideration in building a supply chain. In this context, sustainability refers to an effort to minimize the environmental impact of materials in the supply chain while also taking the impact on society and social causes into consideration. Supply chain sustainability takes a wide range of factors—such as greenhouse gas emissions and minority-owned businesses—into consideration. 

 

The Need for a More Sustainable Supply Chain

The need for supply chain sustainability is felt throughout the supply chain. A 2020 Harvard Business Review article titled “A More Sustainable Supply Chain” summed up the trickle-down effect: 

“In recent years a rising number of multinational corporations have pledged to work only with suppliers that adhere to social and environmental standards. Typically, these MNCs expect their first-tier suppliers to comply with those standards, and they ask that those suppliers in turn ask for compliance from their suppliers—who ideally ask the same from their suppliers. And so on. The aim is to create a cascade of sustainable practices that flows smoothly throughout the supply chain, or, as we prefer to call it, the supply network.”

 

Can Supply Chain Resilience and Supply Chain Sustainability Work Together?

Supply chain resilience and sustainability are both more important than ever, but how can a procurement organization ramp up the adoption of both? The good news is that one doesn’t have to suffer in order to adopt the other. In fact, in many ways, supply chain resilience and supply chain sustainability are complementary. Taking the measures needed to support one gives you a head start toward adopting the other, as long as you have the necessary tools. Ultimately, a more sustainable supply chain is often a more resilient one.

 

Supply Chain Resilience, Sustainability, and PPO

Predictive procurement orchestration (PPO) is the missing piece for many companies, an approach that uses the power of AI and machine learning to simulate procurement purchases in advance. Among its many advantages, adopting PPO gives far greater visibility into cost savings and strategy, allowing procurement teams to prioritize specific areas of the process—helping to build a resilient supply chain that also identifies sustainable suppliers. Organizations that adopt PPO are well-positioned to support both supply chain sustainability and supply chain resilience.

 

Tools Needed to Support PPO, Supply Chain Resilience, and Sustainability 

While many organizations recognize the advantages of adopting PPO, building a more resilient supply chain, and embracing supplier sustainability, they lack the tools needed to do so. As important as these issues are, there is also a reluctance to throw away their existing procurement tools to go through the time and expense of onboarding staff onto an all-new system. 

That’s why Arkestro is proving to be so popular in the procurement space. Our innovative AI-powered platform can be used with existing systems, making it easy to identify certified diverse and minority suppliers while supporting the development of supply chain resilience.

 

Take the Next Step and Book an Arkestro Demo

If your organization needs to step up its supply chain resilience and diversity game, take the next step toward supporting both goals. Book a free Arkestro demonstration and see the many advantages of adopting this advanced, AI-powered platform for your procurement team.

 

Supply Chain Resiliency FAQs

How can I create a more resilient supply chain?

2022 has become much more supplier-focused, Dr. Elouise Epstein calls it the year of the supplier. Make it easier on your suppliers to participate in sourcing events and format your requests for information. For example, Arkestro provides a starting price for suppliers in a sourcing event eliminating guesswork, which increases participation and speeds up sourcing events.

 

Do supply chain resilience and supply chain sustainability mean the same thing?

No, they don’t mean the same thing but often go hand-in-hand. Sustainable supply chains that focus on aspects like ESG and diversity are often resilient.

 

Can Arkestro help with supply chain resiliency and supply chain sustainability goals?

Yes. Arkestro removes friction from sourcing events and provides multi-line item award scenarios so different aspects of each supplier can be measured and weighed. Using Arkestro makes it easier to track metrics like how much spend is going to support ESG initiatives.

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Arkestro Series A

Feature Announcements

Arkestro Lands $26 Million in Series A Funding

Rob DeSantis

Founder

As a former co-founder of Ariba running sales, Rob has deep expertise in the procurement space, having helped propel Ariba from zero to $250 million in revenue in four years and IPO of the year in 1999 before its acquisition by SAP a decade later. In addition to co-founding Ariba, Rob was also an early angel investor and board member of LinkedIn, the world’s largest professional online network.

More recently, Rob served as an investor and advisor to a small portfolio of companies including Bloom Energy, AEye, Inc., HiQ Labs, Agiloft, USEND and more. He is also a co-founder of Dibbs Technology and TrueParity. Rob holds a BSME from the University of Rhode Island.

Marty Meyer

Chief Financial Officer

A trusted partner and advisor on the executive team, Marty has a unique background having been the CFO of nine venture backed technology companies. Marty has raised over $300M in venture funding and has closed six strategic M&A transactions with a combined value of over $1B. Marty has deep domain expertise in ecommerce, consumer internet, networking, data security, data privacy, media technology and enterprise software industries. Marty is especially experienced in the finance and operations activities of SaaS companies and is driven by data and metrics to help create outstanding customer experiences and drive efficient growth.

Neil Lustig

President and Chief Operating Officer

Neil is a seasoned executive with over 30 years of experience leading and building teams in Tech. Neil brings insights from a variety of market spaces and company sizes. Most recently Neil was the CEO of GAN Integrity, an innovative SaaS Compliance technology company serving enterprise customers in North America and Europe. Before that Neil was the CEO of Sailthru, a leader in ML driven personalized multi-channel marketing communications for media and e-commerce markets. Prior to that Neil was the CEO of Vendavo, the leader in B2B price optimization and management for large enterprises. Before Vendavo, Neil led the commercial team at Ariba, the market pioneer that defined and created the eProcurement space. Neil served as the GM of Ariba Europe and subsequently the GM of Ariba North America. Neil started his career at IBM where he spent sixteen years, initially as a software developer, and then twelve years in a variety of Sales and Marketing roles

 

Neil has a BS in Computer Science and Applied Mathematics from SUNY Albany. He is a native New Yorker, Brooklyn born, and still resides with his wife and three children in New York City.

Bonnie Adams

Director of People Operations

Bonnie is a People Operations and HR veteran, with over a decade of experience establishing successful people and culture functions for early to mid-stage tech startups going through high growth phases. She has a passion for supporting and creating inclusive and collaborative work environments and is well-versed in driving positive changes in her organizations as a trusted leader. Prior to joining Arkestro Bonnie worked as the People & Culture Coordinator for Ionic Security, helping them scale from 5 to over 200 employees in addition to a $120M funding round. Most recently she was the Head of People & Culture for blockchain innovator Storj Labs and was the Director of Human Resources at PrizePicks, the largest independently owned Daily Fantasy Sports platform in North America.

Arym Diamond

Chief Revenue Officer

Arym Diamond joined Arkestro in January 2022 bringing over 20 years of experience in the enterprise software and consultancy industry.  He is responsible for the worldwide go-to-market revenue strategy. Prior to Arkestro, Arym was Chief Revenue Officer at CalAmp focused on Telematics and Logistics. He also served as the area vice president of North American Sales within the Salesforce.com Enterprise Business unit for Einstein Analytics & AI, where analytics and machine learning were re-imagined for the front office.  Prior to that, he spent over 10 years at Oracle in various sales positions. Arym holds an MBA from the University of Southern California Marshall School of Business, and an undergraduate degree from California State University.

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