Future-Proofing Business: The Role of Technology, Sustainability, and Global Supply Chains

Unlock the secrets to future-proofing your business through strategic investments in technology and sustainability. Our latest episode of the Chain Reaction Podcast promises invaluable insights into the growing focus on cybersecurity, AI, and data analytics from a recent Gartner survey. We'll share why Chief Information Officers are prioritizing these areas, and how this shift might just redefine IT strategies globally. Witness the fascinating reduction in legacy infrastructure spending and what it means for the future of digital transformations. This is not just about tech trends—it's a roadmap for surviving and thriving in a rapidly changing world.

Join us as we highlight groundbreaking collaborations between industry leaders Danone and Maersk. Learn how their ambitious goals for net-zero emissions are setting a new standard in sustainable logistics. We’ll explore innovative solutions like alternative fuels and their impact on reducing greenhouse gas emissions. Plus, the recent, devastating floods in Valencia bring to light the urgent necessity for robust climate response strategies. This episode is packed with essential information for anyone eager to understand the evolving landscape of global supply chains and the drive towards sustainability.

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Transcript

Tony Hines: 0:04

Hello, tony Hines. Here You're listening to the Chain Reaction Podcast all about supply chain advantage. This is the news roundup all things impacting global supply chains this week. Thanks for stopping by. Hope you've had a good week.

Tony Hines: 0:18

In 2025, chief Information Officers expect to increase investment in cybersecurity and artificial intelligence, as well as business intelligence and data analytics. Integration technologies, of course, are key to this, and a recent survey by Gartner said that only 48% of digital initiatives meet or exceed their business outcome targets. They surveyed more than 3,100 chief information officers and technology executives and more than 1,100 executive leaders outside of IT. They also said that a small cohort of CIOs and CXOs known as the digital vanguard said that they were 71% in agreement that digital initiatives met or exceeded expectations. But they would, wouldn't they? Because they're in charge of them. You can read the whole report from Gartner, which was published in October 2024. But just looking through that report, the places where funding is increasing focus on cyber, information security, generative AI, artificial intelligence in a wider context, of course, business intelligence and data analytics, cloud platforms, application modernization and integration of technologies, such as APIs, as they're known, and the architecture that supports that, and the digital workplace, as well as CRM, and they're all over 59%. They go down from 87% to 59% of increases. And the lowest areas were the investing next-generation computer technology, human augmentation and legacy infrastructure. So those things are the lowest investment areas. I think one standout for me was the investment in legacy infrastructure has actually become an area where they're not only quite low at 33%, but it's likely that 43% of the respondents acknowledged they're going to reduce spending in that area. So lots of things which are quite interesting.

Tony Hines: 2:31

And then they were also asked what are the key areas they'd focus on in 2025. This is the CIOs, and they said cybersecurity 69%. It strategy 59%, and demonstrating the value of IT investment 60%. And then integrate, innovate, modernize and transform were key areas of focus, thank you. That's based on reducing GHG emission fuels like biodiesel and biomethanol, which are produced solely from waste feedstocks. These fuels are then used on vessels across the Maersk fleet. With applied versions of EcoDelivery Ocean by Danone, the GHG emissions are reduced more than 40% compared to traditional fossil fuels.

Tony Hines: 3:46

, the Global Chief Procurement Officer at Danone, said we're happy to partner with Maersk through Danone's Partner for Growth programme. The EcoDelivery Ocean product and its reduced greenhouse gas emissions align well with our decarbonisation strategy to focus primarily on alternative fuels and multimodal transport. Danone, of course, is committed to net-zero emissions by 2050, and Maersk has a net-zero target of 2040, a decade earlier. It's the first shipping and logistics company that has a pathway to net-zero, approved by the Science-Based Targets Initiative, sbti. Emilio de la Cruz, Maersk's Area Managing Director for Southwest Europe, said the swift reduction of greenhouse gas emissions is at the core of both our companies. Well-known companies like Danone can act as a beacon in their industries by using effective levers to decarbonise their supply chains, and we are proud to partner with Danone on this important task.

Tony Hines: 4:50

Ap Muller Maersk this week continued its strong business performance in the third quarter. Maersk reported growth across its business and financial results significantly above those of the previous year, primarily by ocean, while both logistics and services and terminals also contributed through improved earnings. On the back of the strong quarter, combined with robust container market demand and the continuation of the red sea situation, merscope graded its guidance for 2024 on october. The 21stst is now expecting full-year underlying EBIT of US$5.2 to 5.7 billion. It previously said they'd be between 3 and 5 billion, so this is an important upgrading of those results. The EBITDA is likely to be 11 to 11.5 billion US dollars.

Tony Hines: 5:53

The flooding in Valencia this week has really brought home the problem of climate change to a major European country, as the mudslides down the mountain and into the towns and villages killed people and disrupted many lives, and there are still people missing. The authorities were very slow to react to the problem and people were left feeling as if they had been left alone. Problem of climate change and the challenges of sustainability, but it also shows political ineptitude and responsiveness, failings in acting to put things in place to prevent such occurrences. I don't think anybody thinks it's the responsible thing to do anymore to not take on the challenge of climate change with all the data and the evidence that we've now gathered about the way things are changing across the globe, and it will cause obviously far more disruption in the future for communities, for governments and supply chains. When we think about all the wars going on across the world, of course those could be avoided and it's time that resources were reapplied to the real problem facing humanity, which is climate change.

Tony Hines: 7:18

When it comes to thinking about supply chain strategies and it's something I do all the time, in fact, I wrote a book on it and supply chain strategies are really quite straightforward you have to lower cost or push up revenue in some way. To optimise the performance in supply chains is one way to do that. So optimisation is the challenge, but how to optimise? There are many different ways in which to optimise, and we've talked about those ways on chain reaction, in terms of the application of artificial intelligence to various aspects of the supply chain, but also the people and the skills of people who work in the supply chains are still exceptionally important, and so it's a combination of all these things that we have to bring together to change the way we operate, the way we do things and the way we can make things better in the supply chain. And I've written about this endlessly over the past 30 years and I've talked about it at various conferences and, of course, in the podcast. And if you read my supply chain strategy book, published by Routledge, which talks about ways in which to improve your strategy in your business, then you will see that we have to take account of many different aspects in order to move towards a strategy that suits our business, and it isn't always one size fits all. There are many different strategies, many different routes to the future and, of course, one of the forthcoming episodes that you really ought to listen to talks about just that and how to future-proof your supply chain amidst an unpredictable world should be important to you, and you should have evidence that leads you to discussions internally which result in strategies that you can apply internally and externally to manage your supply chain better.

Tony Hines: 9:30

Well, I think the next few days we'll see the outcome of the election in the United States, and whoever wins that election will determine how all sorts of things move ahead. Now the question is, if Donald Trump becomes president he's already said he intends to put all sorts of taxes on trade, so it will be a very protectionist policy, probably on trade. So it will be a very protectionist policy, probably. And if Kamala Harris becomes president, it would be less so, but there'll still be some protectionism taking place. So I think the outlook for world trade is going to be tricky over the next 12 months, whoever wins the election in the US. There are plenty of other matters that are keeping trade lower than it might be. There's all kinds of uncertainty in relation to the war in Ukraine, the situation in the Middle East and, of course, the various disruptions that have taken place in various parts of the world during the last year or two, with routes to market being blocked either through natural disasters or through human disasters created by people Chaining Reaction.

Tony Hines: 10:47

Now here's a quick roundup of some of the news taking place this week. Boeing shares have risen on the hopes of a new wage deal and they hope to end the strike soon. But is it just sentiment or is it likely to happen? That's the question. The US labour market has not been as buoyant as it should have been in the lead-up to the election and it's been affected by hurricanes and strikes, so a number of factors hitting that labour market. Boeing has raised its offer to 38%. The workers wanted 40%, but will it be enough? That's the key question.

Tony Hines: 11:30

Now there was a news item out of North America, northern Virginia to be precise, this week, reported by the BBC, and it was about the concentration of data centres. Apparently, northern Virginia is the state with the highest concentration of data centres, and they don't like it very much. Data centres, of course, are vast warehouses that house stacks of computers that store processed data used by websites, companies, governments and everyone that uses cloud technology. And Northern Virginia has been at the center forgive the pun, at the center of the data centers since the 1990s because of its proximity to Washington DC, with historically cheap electricity and land prices and land prices. Ashburn, 35 miles west of the US capital, has 477 data centres in the state, followed by Texas with 290 and California with 283. It's claimed that about 70% of the world's internet traffic goes through Ashburn, which is known as Data Centre Alley, but it's now attracted environmental protests.

Tony Hines: 12:44

On the west coast of Ireland. There's a challenge currently taking place to a 1.3 billion US dollar or 1 billion pound data centre in County Clare, and there are more and more objectors to these large data centres, claiming that they're environmentally unsound. Environmental protesters are targeting these data centers for several reasons. The first is energy consumption. Data centers consume a significant amount of electricity they account for about 1-2% of global electricity demand and the high use of energy contributes to carbon emissions and climate change. Water usage is another reason. Data centres require large amounts of water for cooling systems and that can strain local water resources, especially if they're in areas that are already facing a drought. The environmental impact of these data centres in terms of construction and operation can lead to habitat destruction, increased traffic and noise pollution, which affects local communities. There are also sustainability concerns. Protester groups argue that the rapid expansion of these data centres is not sustainable and that more should be done to improve energy efficiency and the use of renewable energy sources. Improve energy efficiency and the use of renewable energy sources. And they also claim that the local quality of life is disturbed near data centres because they face disruption during construction and increased demand on local infrastructure such as electricity and water networks. So, all in all, they're unhappy. Well, here's a great British export.

Tony Hines: 14:21

I'm going to talk about the history of Guy Fawkes. Some of you will know about Guy Fawkes, I'm sure, and we have something in the United Kingdom and, of course, in ex-British colonies around the globe where Bonfire Night is celebrated. It's rooted in the gunpowder plot of 1605. It was a failed conspiracy by a group of English Catholics, led by Robert Catesby, to assassinate King James I of England and replace him with a Catholic head of state. The plan involved blowing up the House of Lords during the state opening of Parliament on November 5th. Guy Fawkes was a former soldier and he was tasked with guarding the gunpowder that had been placed in the cellar beneath the House of Lords. However, the plot was foiled when an anonymous letter warned one of the conspirators, lord Monteagle, not to attend the opening, the authorities were alerted and Guy Fawkes was discovered in the cellar with gunpowder. On the night of November the 4th. Following the discovery, bonfires were lit around London to celebrate the King's survival and in January 1606 Parliament passed an observance of 5th of November Act which mandated an annual public day of thanksgiving for the plot's failure. God save the king and all that. It became known as Gunpowder Treason Day and later it became Guy Fawkes Night, and so November the 5th is when it's celebrated.

Tony Hines: 15:56

Now you might wonder what this has all to do with supply chains. Well, it's a very interesting supply chain for all the fireworks that make it to the celebrations which still go on. We have raw materials sourced fireworks made from a mix of chemicals such as potassium nitrate, which is saltpeter, sulphur and charcoal, along with various metals like aluminium, barium and copper to create the different colours, and these materials are mined and then transported to manufacturing facilities. The majority of fireworks are manufactured in China, which has a long history of firework production. The manufacturing process is labour intensive. Involves manually assembling the fireworks. The manufacturing process is labour intensive, involves manually assembling the fireworks, and the components are carefully mixed and packed into aerial shells or tubes. There's quality control in the process. After manufacturing, fireworks undergo rigorous quality control to check that they ensure safety standards and performance standards are met.

Tony Hines: 16:57

As shipping and distribution, fireworks are shipped, usually by cargo container, to various countries. For example, in the United States, fireworks are often imported through major ports, like those in California, and then distributed to retailers across the country. Retail fireworks are sold through various retail channels, including specialized fireworks stores, online retailers and temporary stands set up for specific events such as Independence Day or New Year's Eve. So it goes beyond Guy Fawkes, of course, and there are regulations. The supply chain must navigate the various regulations both in the manufacturing country and in the destination countries, to ensure compliance with safety, import and export laws.

Tony Hines: 17:41

The production and use of fireworks have environmental impacts, including resource extraction, manufacturing emissions and post-display waste. Some regions are exploring eco-friendly alternatives such as drone light shows to reduce these impacts. So it's not just a celebration's a big business, as you can see, and Bonfire Night will take place on the 5th of November in Canada, south Africa, new Zealand, newfoundland and Labrador in Canada, as well as in the United Kingdom, and there might be other countries too, and I apologise in advance if I've missed you off the list. Well, that's it for this week. That's the news roundup. Hope you've enjoyed, hope you found out something you didn't know, and I'll see you again in the Chain Reaction podcast next time. In the meantime, take a look at all the new episodes coming your way and don't forget you can subscribe and be first to know when a new episode is out, and then you can listen. First I'm tony hines. I'm signing off bye for now. You Thank you.