How healthcare supply chains can run more ethically

Healthcare
Stanton Thomas leads sustainability at o9 Solutions. Here, he tells us about how the healthcare sector can reduce its Scope 3 emissions

o9 Solutions is a software development company based in Dallas, Texas, founded in 2009 by the two pioneers, 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. 

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.”

 

How healthcare is reducing Scope 3 emissions

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
  • The healthcare supply chain
  • Manufacturing medical devices and equipment
  • Emissions from the production of materials used to make 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.”

 

How can healthcare supply chains can run more ethically

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 tools and methodologies continue to gain broader use, thus reducing emissions associated with patients commuting to and from healthcare facilities. 

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.”

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