Whether for deliveries to customers or material flows, delivery processes must function smoothly in order to maintain the highly complex supply chains of a globalized world. It is equally important to keep the resulting greenhouse gas emissions as low as possible. In recent years, there has been a growing awareness that companies are also jointly responsible for the emissions generated along the supply chain, similar to the Supply Chain Due Diligence Act - which gives them back the duty of care for their entire supply chains. Scope 2 and Scope 3 emissions that are generated during energy production or along the supply chain are therefore included in a company's_{carbon footprint}. This needs to be reduced, but that is easier said than done. Many companies simply lack the insight into the relevant data for implementation. After a digitalization boom, which can certainly also be attributed to the coronavirus pandemic, the digitalization of the German economy has recently stagnated (Deutsches Institut für Wirtschaft, 2022). Yet it is a basic prerequisite for greater sustainability and sustainable corporate growth.

Digitalization as a driver for more sustainability

Miscalculations in material requirements planning are not only inefficient, empty runs and the resulting additional costs are often also emission-intensive. Smooth scheduling is therefore one of the basic prerequisites for sustainability and success. As this task is becoming increasingly complex, it can hardly be accomplished without intelligent digital solutions. This means that companies should first digitize their processes in order to gain a more transparent insight into their own data - this is the only way to tap into a great deal of emissions-saving potential. Many employees can tell you a thing or two about the fact that this is not yet the case across the board in German companies - even though this initially only affects the facilities that belong directly to the company. However, true sustainability does not end at the factory gates.

Sustainability that goes beyond this can only be achieved with digitalization. In addition to their own processes, companies should also digitalize their supply chains. Due to the complexity of modern supply chains, which are much more like close-knit supply networks, tools with integrated artificial intelligence (AI) are particularly suitable for this. They can incorporate all data points, uncover interdependencies and provide highly accurate forecasts for scheduling. As part of its "Materials as a Service" strategy, which also includes supporting customers in achieving their climate targets, thyssenkrupp Materials Services is developing solutions for the digitalization of material flows and supply chains. The AI-based Pacemaker software is one of them.

"Talk data to me"

Industries such as aerospace and the automotive industry in particular are known for their complex, global supply networks. The smallest failures or bottlenecks as well as latent risks such as the bullwhip effect must always be taken into account in order to maintain supply capability. AI-based supply chain management software such as Pacemaker can incorporate production data, historical values, demand forecasts and market data into their calculations. The result is highly accurate forecasts that would not be possible without AI support. This gives the scheduling department an enormous time advantage, which it can use to identify any emergencies in good time and adjust demand planning wherever necessary. Incorrect deliveries can thus be avoided, inventory and storage costs reduced and the number of transports reduced. Another advantage of AI solutions is that they can use daily data and calculations to forecast even more accurately - so the savings potential is not capped.

Solutions such as emissions calculators are also important tools on the way to more sustainable corporate activities. Some of them, such as the Product Carbon Footprint Calculator introduced by thyssenkrupp Materials Services, can calculate data for all emissions associated with a product - regardless of where they occur in the supply chain. In addition to supplier and material data, the calculator also uses data on warehouse locations and inbound and outbound deliveries. For the first time, this gives many companies a transparent insight into all the emissions data for which they are jointly responsible. After all, you can only reduce emissions if you know what they are.

On the way to net zero

With the use of AI-based supply chain software and emissions calculators, companies are gaining a whole new level of data transparency. But are digitalized processes and supply chains enough to lead companies to climate neutrality?

For all its advantages, digitization cannot simply set emissions to zero. It creates an accurate and well-maintained database that can be used for decision-making. On this basis, it is possible to plan, implement and track measures to reduce emissions. Some emissions can already be avoided today, for example by switching to energy from renewable sources, while technical solutions still need to be developed for others. However, certain emissions will continue to be unavoidable. Materials Services already offers a solution for this: Voluntary Carbon Credits. High-quality, verified measures are used to remove_CO2 from the earth's atmosphere, for example.

The spread of artificial intelligence in more and more areas of life is expected to bring a boom in innovation. It is likely that this will enable further potential savings to be made in the coming years. At the same time, concerns that AI could displace people from the world of work are unfounded: People will continue to lead the way in the future. The clear ideal is not an industry without people, but a harmonious interplay between man and machine.

This article appeared in issue 7/23