The Future Of Supply Chains Will Be Defined By Collaboration

Rapid globalization, fierce competition, social change, technological breakthroughs, scarcity of raw materials; businesses need to reinvent themselves continuously to cope with this string of challenges. Technical, commercial and financial innovations tend to be the focus of attention; innovative partnerships less so. And yet the latter are no less indispensable than the former.

The future of supply chains also needs to be seen through the prism of new partnerships. Expanded, creative, atypical partnerships. Partnerships that bring together a variety of stakeholders and that cover unexpected topics. Partnerships that are a source of growth, innovation and legitimacy.

Let’s take the case of the circular economy – an economy that systematically turns waste into useful resources. This cross-sectoral, collaborative economy multiplies the number of interfaces between the various activities. For if one person’s waste is to become another person’s raw material, someone needs to treat it and to provide a link to a potential customer who is willing to buy it.

It is no longer a matter of simply eliminating waste, but rather of reintegrating it into the production cycle in the form of renewable resources. In other words, finding economic stakeholders who are interested in the waste as secondary raw materials or energy. Hence the increase in novel partnerships that are drivers of new growth – growth that is clean, sustainable and shared.

For example, methanization provides threefold recovery of organic waste, producing electricity, heat and soil amendments. In order to achieve this, partnerships have to be formed between industry, municipalities and farmers, who all emerge as winners. These partnerships promote a local economy, intermeshing local jobs with local resources and local usages.

Another example is provided by the smart city – a city that depends on the active involvement of its citizens and the exchange of information in real time. New technologies make it possible for users and public services to interact instantly and permanently; they bring decision-makers, operators and consumers closer together; they institute a more participatory urban culture.

Thanks to smart metering, smart phones and mobile devices, city residents have become data transmitters, interacting with the city’s networks; where once they were passive, they are now active “micro-operators” of urban infrastructure. In addition to managing personal water, electricity or heat consumption, residents have become sentinels of the city, helping to ensure it is run properly.

Several municipalities encourage residents to send a geolocated picture whenever they spot a damaged fire hydrant or an overflowing waste container. Thanks to the digital revolution, these new links between communities, businesses, associations and individuals are becoming sources of wealth creation.

Although the mass collection of information, combined with the analytical power of Big Data, has transformed the relationship between cities and their inhabitants, it has also made businesses more open. By slashing communication and transaction costs between companies and their partners, whether near or far, the digital revolution is redefining and redrawing business frontiers. Given that business has always been made up of a medley of stakeholders, joined together in constantly evolving partnerships, is this so surprising?

Beyond the inner circle formed by employees, shareholders, customers and suppliers, and the second circle composed of bankers, insurers and government, a third circle comprising countless organizations is now emerging; these include associations, municipalities, regions, universities, foundations, etc. For supply chains, the business intervention area is now potentially much wider than has traditionally been the case.

Open innovation is almost always at the heart of these new partnerships. It is specific in that it promotes employee participation and overcomes fragmentation between services, local players and roles, in contrast to the pre-digital economy, in which the channels were highly segregated. Thanks to multi-stakeholder initiatives, the regions are establishing a creative tension between the public sector, the non-profit sector, businesses and residents, in places where they can meet, cooperate and invent.

For example, the TUBA urban experimentation space in Lyon is open to the general public, and is designed to try out original projects based on the exploitation of urban data, and test related business models. It is underpinned by a broad partnership that brings together the international companies, start-ups, SMEs, research centres and schools of the Greater Lyon area. The focus of this collaborative laboratory’s work includes monitoring the environment, smart housing and smart urban equipment. Partnerships of this kind are a powerful driver of economic change. In addition, they help businesses anticipate and detect those weak signals of the present that hold the keys to the future.

But besides creating economic value, businesses also need to create social value. Indeed, a number of clients are asking them to engage with solidarity projects that take them well beyond their professional comfort zone. It was with this in mind that, in 2015, Veolia joined forces with Ashoka, the first global network of social entrepreneurs, to promote the creation of financially sustainable solidarity organizations around topics such as the environment, the smart city and eco-neighborhoods.

Promising start-ups have already been launched in the social entrepreneurship incubators of Mexico City, Lyon and Toulouse, targeting widely differing objectives: providing web app coding courses for young people with no qualifications; promoting reuse of electrical goods – still stuck at 2% in France; preventing over-indebtedness by financially educating low-income families and helping people to manage their water consumption.

Solidarity, sustainable development, intercultural dialogue; ideals that run through society spill over into the corporate world and ask questions of it, to the point that it needs to embrace causes that might appear to be beyond its concern, but which are in fact crucial to its future. For no economic entity can endure without addressing the urgent appeals of its time. In addition to creating economic value, today’s businesses are expected to be interested in other issues. This holds particularly true for big companies: being questioned is one of the obligations of leadership.

Undoubtedly, the future will be written by renewable energy, artificial intelligence, nanotechnology and digital technology. But it will also be written by new partnerships. In this new world in which no position can be considered definitive, companies that do not build new synergies with the economic and social players around them are likely to miss out on strategic breakthroughs, overlook emerging markets with growth potential or be left behind. For companies, the future has always been a frontier experience. Today, new partnerships constitute one of those frontiers.

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