Sustainability isn’t just a buzzword – it’s a strategic imperative that savvy businesses and general contractors leverage to propel themselves into a future where environmental responsibility converges seamlessly with profit margins.
Transforming a steel supply chain (or any supply chain, for that matter) into a sustainable value chain involves more than rethinking blueprints and selecting green-labeled products. It includes focusing on global issues, such as minimizing environmental and human impact and requires buy-in from all stakeholders involved in the production and value-adding activities needed to make a product, such as steel. It enables decarbonization at every step.
Fortunately, industry-wide collaboration, transparency and technology are supporting sustainable value chain creation like never before. Here’s how.
Realizing vision through a purpose-driven culture
One of the first steps when creating a sustainable value chain, is to ensure buy-in, as well as a commitment to decarbonization on the part of suppliers, builders and property owners, says Richard Ley, director of procurement at BlueScope Buildings North America, a responsible leader in smart steel solutions within the built environment.
This commitment must transcend a surface-level pledge and signify a dedicated effort toward decarbonization. Business decisions need to transcend economics and rest on a firm culture of care that embraces a broad vision for sustainability and our collective future.
“We could say, as a business, that the only thing we’re interested in buying is the lowest possible cost steel. But that is a very narrow-minded position,” Ley says.
“At BlueScope Buildings, we choose to partner with suppliers that are actively setting targets and goals to reduce their carbon footprint. While they’re not all going to be carbon neutral tomorrow, we believe we’re on a path to deliver lower-carbon solutions,” Ley says.
“We want to know the whole story of the parts and products we receive, so we’re investing in this ongoing journey of discovery,” Ley explains.
With the right collaborative suppliers in place, the next step is to use technology (more on this below) to reimagine how materials are produced, procured and utilized while building a reliable, sustainable supply value chain, he says.
Last, but certainly not least, innovation is another key to creating a sustainable value chain, which Ley points to. Investing in and partnering with start-ups can shake up the construction industry with fresh ideas and tools that support sustainability efforts.
Using data to drive more informed supply decisions
The construction process can be particularly challenging to decarbonize because there are so many stakeholders along the supply chain, says Shane Hodgkins, co-founder and CEO of Matrak, a software company focused on transforming global construction supply chains through connecting materials.
To enable more sustainable choices, you need to be able to gather far more information from each of these stakeholders than has traditionally been done, he says.
When materials from 50 or more suppliers arrive on a job site, it’s nearly impossible to differentiate them, he says. However, better data can help provide companies with traceability and visibility into a supply chain.
Using Matrak’s material tracking platform, companies can track key markers, like the embodied carbon of their products, and make that information available to the companies they work with.
“You end up getting these connected supply chains,” he says. “And companies are then able to make better purchasing and supply chain decisions based on that real-time data around the embodied carbon impacts of their choices.”
Having access to data throughout the entire supply chain — including visibility on every single product and where it’s going in a project — also helps companies reduce waste and streamline their decision-making, Hodgkins says.
“[Companies are] able to share critical information upstream and downstream as they complete their work.”
Leveraging AI for EPDs and lifecycle analysis
Life cycle analysis of the environmental impact of your building project is a complicated but necessary process for construction companies that want to decarbonize their supply chain, says Leise Sandeman, the co-founder of Pathways, a platform for manufacturers that simplifies the creation of product life cycle analyses.
Fortunately, AI can help make sense of the diverse data formats that companies create, enabling yet another way to gain greater visibility of your supply chain, says Sandeman.
Pathways’ tech solution sits on top of the material manufacturers’ data layer — integrating into procurement systems, invoice documentation, safety records and utility bills. This integration yields highly detailed product-level life cycle analysis, which is crucial for developing and maintaining Environmental Product Declarations (EPDs).
EPDs, emerging as the standardized way to convey a product’s environmental impacts, are not intended to be static sources of information.
“One of the outputs of [your lifecycle analysis] is that you can update, renew and publish your EPDs,” Sandeman says.
“Because Pathways integrates into the data stack, it's not a one-off snapshot. If you make changes to your process, if you have decarbonization initiatives, that will be represented in the data.”
Collaborating with like-minded partners to use and develop tools, EPDs and enhanced material tracking, is integral to creating a sustainable value chain.
Success through integration
Success in embedding sustainability into supply chains requires leading with purpose and care, while challenging the status quo. Organizational cultures valuing transparency, accountability, specificity and an openness to explore emerging technologies, will find it possible to create value chains within the construction industry that help them both accelerate and achieve their sustainability goals.
