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Increasing security of supply and competitiveness through monitoring of the physical economy in companies and along supply chains

Increasing security of supply and competitiveness through monitoring of the physical economy in companies and along supply chains

Summary

Global socio-economic developments increase the complexity of global supply chains and global material flows. Concerns regarding the security of raw material supplies and competitiveness are growing with globally rising raw material demand and prices. Moreover, environmental impacts associated with increased material use affect company activities through environmental policies and public and customer perceptions of sustainability. A robust understanding of the material stocks and flows along supply chains is an important framework condition for developing effective business strategies for addressing these challenges. Overcoming the limitations of monitoring the physical economy is pivotal for securing resource availability, increasing resource efficiency, and communicating good environmental practices and compliance with regulations. The MinFuture project has developed a framework aimed at providing guidance on how to perform a more systematic physical accounting, as well as steps to help implement such a system.

Key recommendations

  1. Establish physical accounting linked to financial accounting at site and company levels in order to gain new insights into potentials for improving resource efficiency, reducing costs, and to simplify and clarify reporting.
  2. Develop, in cooperation with other businesses and government organisations, a monitoring of the physical economy along the supply chain in order to obtain insights into opportunities and risks for supply chain security, recycling and environment strategies, alternative business models, and procurement practices.
Publishing Date
December, 2018
Language
English
Citation

Araujo Sosa, A.; Hirschnitz-Garbers, M.; Müller, D.; Rechberger, H.; and Liu, G. (2018). Increasing security of supply and competitiveness through monitoring of the physical economy in companies and along supply chains. MinFuture Business Brief (D6.4.2); Ecologic Institute: Berlin