Kallikor AI is a start-up originating out of metaverse pioneer Improbable Worlds. Their software, originally created for computer games, is now used to help companies simulate different scenarios and model solutions across complex supply chain operations. CEO Jonathan Barrett says this holistic view is the future for sustainability in the sector.
The increasingly complex, interconnected, and fluid nature of global supply chains is manifest in the outsize carbon emissions the sector produces.
With environmental consciousness top of the international agenda, companies across all sectors – particularly those with large supply chains – are wrestling with the challenge of decoupling human progress from environmental footprint.
There remains a misconception that sustainability initiatives negatively impact profitability – a zero-sum mentality that is a barrier to widespread adoption of green policies.
One way to eliminate this trade-off is a shift from static supply chain planning to dynamic planning using AI-powered synthetic world technology.
Innovations in AI and synthetic world technology have the potential to help supply chains become the heroes of corporate sustainability stories. Businesses can understand the full spectrum of their impact on the planet as well as on their commercial objectives, enabling them to prioritise decisions which reduce their carbon footprint and deliver company needs.
This not only paves the way for the adoption of sustainable practices but demonstrates that the ‘trade-off’ between environmental responsibility and profitability is a fallacy.
A balancing act: sustainability and profitability
The idea that pleasing shareholders and doing good for the planet are mutually exclusive is an outdated but persistent misconception. This false dichotomy misconstrues the issue, often causing environmental targets to be de-prioritised by executives.
Supply chains are responsible for approximately 60% of carbon emissions globally – a concerning statistic, but also one which holds immense opportunity.
Current supply chain strategy belies the complexity of modern supply chains. Technologies, geopolitical crises, and consumer trends move at an exponential rate – yet traditional decision-making approaches are designed for much slower environments. The disconnect between the two means current ways of working are no longer fit for purpose.
A shift is needed from manual strategic design and planning analysis – often characterised by use of Excel – to a state of perpetual, dynamic strategic planning and rehearsal.
Here, innovative technologies come in.
The power of an AI-digital twin combination
AI-powered synthetic worlds provide leaders with a forward view of their customer needs, operational capability and business environment, allowing them to understand the effects of making specific decisions.
By creating a digital replica of the relevant parts of their supply chain ecosystem, companies can simulate, analyse, and optimise their operations in real-time. This insight allows companies to identify inefficiencies and make data-driven decisions to minimise their carbon emissions, that would otherwise be beyond the visibility of even the most perceptive business leaders.
By enhancing operations, companies can significantly reduce energy consumption, minimise waste, and lower transportation costs. A more efficient use of resources leads to lower operational costs, while optimised inventory management reduces carrying costs and prevents overproduction.
These improvements not only decrease a business’ carbon footprint, but also directly impact the bottom line.
Where there is a will, we need to find the way
Supply chain operators need to lead the way on sustainability. But without AI-powered simulation technology, they lack the tools to navigate the complexities for an overall net gain towards net zero.
Sustainability reporting is now a requirement in large organisations. Few, however, can accurately create reports or manage change to balance cost, service and emissions on a continuous basis. With digital twin technology, it is possible to simulate ‘as-is’ and ‘to-be’ supply chain structure, accurately reporting on existing and simulating future emissions.
Decision makers can identify the best options to elevate their operations for profitability and sustainability simultaneously. What’s more, this technology helps to uncover potential ‘butterfly effects’ in a way that human analysts simply would not be able to foresee.
A paradigm shift
The adoption of this technology in supply chains represents more than just a technological upgrade. It is a paradigm shift in how to approach strategic operations design and planning. Environmental responsibility is seen as an opportunity for innovation and growth, rather than a burden.
This shift is crucial in the face of increasing environmental regulations. 2030 – the deadline for achieving the UN’s Sustainable Development Goals – is fast approaching. The urgency for reaching sustainability metrics has never been greater.
As we stand at the intersection of environmental urgency and economic motivations, synthetic world technology offers a path forward. Achieving net-zero emissions in supply chains is not only possible, but profitable.
As well as aligning business and climate objectives, AI-powered synthetic worlds have the potential to deliver active buy-in and collaboration from stakeholders across a business. Their ability to allow decision makers and stakeholders to interactively explore the consequences of the options available is a game changer.
Through encouraging the adoption of robotics and automation technology, digital twin technology has long-term sustainability benefits too. New equipment significantly improves productivity, these efficiency gains reduce carbon emissions in both the short and long term.
The journey towards sustainable supply chains is undoubtedly complex – but synthetic worlds provide the navigation tools needed to embark on it with confidence. They offer a path towards a win-win scenario where businesses can uncover ways to streamline their operations, reduce their environmental impact, and improve their bottom line simultaneously.
It’s time for businesses to embrace this technology and recognise that, in the pursuit of net-zero emissions, sustainability and profitability are not opposing forces – they are complementary goals that can drive long-term success and resilience in an ever-changing world.
