Manufacturing medicine and Scope 3 emissions
o9 Solutions is a software development company based in Dallas, Texas. The company is on a mission to ‘develop the best platform and solutions to help enterprises’ in the pursuit of organised silos and smoother supply chains.
Stanton Thomas is in charge of leading sustainability at o9 Solutions.
“My role involves two organisation responsibilities,” says Thomas. “I lead o9’s internal sustainability efforts to become the best-in-class sustainable software company among our peers. I also lead our strategic product solutions initiative focused on providing the digital foundations for sustainable supply chain transformation within our client base.”
Thomas’ background includes more than 30 years in supply chain management with the latter half of that time being spent in renewable energy, clean tech, and sustainability.
“Along the way it became apparent to me that our climate was changing dramatically and there was a critical need to focus on the decarbonisation of industry and protect the environment for future generations. It seemed intuitive to me that the intersection of sustainability & supply chain would increase in importance in the coming years, and that's really where I believed my focus needed to be.”
Manufacturing medicine and Scope 3 emissions
o9 was founded in 2009 by the two pioneers of what is now known as advanced planning systems - Sanjiv Sidhu and Chakri Gottemukkala. The company employs roughly 2,500 employees in offices all around the world. o9 provides a cloud-native technology platform, called the Digital Brain, which is a comprehensive set of digital transformation tools for enterprise planning and decision support. The platform includes a suite of SaaS-based applications that cover a broad range of planning needs including supply chain, finance, revenue management, and most recently, sustainability.
“Over the past five years the company has experienced rapid growth, and our client base represents many of the largest and most well-known corporations in the world, across a broad range of industry sectors including retail, consumer goods, telecom, and manufacturing.”
Globally, healthcare sector carbon emissions are at about 4.5% of the total. 80% of these emissions are estimated to be Scope 3 emissions – those emissions arising from indirect sources including the manufacture of medicines, supplies, devices and equipment, as well as emissions from the production of materials used to manufacture those products (e.g. chemicals, plastics, and metals).
“Overall, the single largest source of emissions in the healthcare sector comes from the generation of energy, accounting for about 35% of the total,” says Thomas. “The health care sector will benefit in coming years from policies at the federal, state, and local levels that incentivise the increase of renewable and low-carbon sources in the energy mix. This includes on-site generation and localised microgrid projects, as well as the modernisation of the broader grid infrastructure.”
Energy efficiency improvements are another key lever in reducing carbon emissions. This involves upgrades to healthcare facilities including lighting and HVAC systems, as well as medical equipment.
“Logistics and transportation are also important emission reduction opportunities in the Scope 3 healthcare landscape,” says Thomas. “Energy efficiency improvements in the so-called ‘cold chain’ in which critical medicines such as vaccines are stored and transported from the point of manufacture to the point of use. More broadly, the electrification of transport vehicles, the move of medicines, supplies and equipment is also a key opportunity as new vehicle technologies become both more affordable and available in the market.”
Finally, telemedicine (remote medical care) tools and methodologies continue to gain broader use, thus reducing emissions associated with patients commuting to and from healthcare facilities.
How can manufacturing supply chains can run more ethically
Thomas believes that supply chain transparency and traceability are essential to identifying and mitigating the risk of unfair and unethical business practices within a given supply chain.
“This is particularly true in deep and complex supply chains such as those that produce medical device technologies,” he says. “The key impediment is a lack of visibility beyond the first tier of suppliers. Even with the formulation of government policy frameworks in recent years that seek to regulate the private sector in this regard, it remains difficult for corporations to detect unethical practices when they are virtually blind to the business relationships that exist beyond their direct trading partners.”
A number of digital technologies have come to market over the past few years that utilise AI to identify risks by scanning vast sources of information across the Internet. But without a clear picture of the structure and depth of your particular supply chain, there’s no way to determine whether a risk identified using this method applies to your product.
“The only way to know for sure is to audit your supply chain, which is a resource-intensive and time-consuming task,” says Thomas. “Supply chains are not static either – they are constantly evolving as business relationships change. In recent years, there has been some progress with certain components and commodities, but there is a long way to go.”