Water is essential to human life and to our modern economy . While the agricultural and industrial sectors account for 92% of global water use, the overuse of fresh water has become a critical socio-environmental issue for big business.

o   How can we optimize water consumption, knowing that the world’s population is increasing rapidly Estimates show that with current practices, the world will face a 40% shortfall between projected demand and available water supply by 2030?

o  Does good supply chain management help to reduce this water deficit in the world?

In this article, we will answer all these questions !

 How does supply chain management (SCM) work?

Supply chain management (SCM) represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible. Supply chains cover everything from production to product development to the information systems needed to run these businesses.

Typically, SCM attempts to centrally control or link the production, shipping, and distribution of a product. By managing the supply chain, companies can reduce excessive costs and get products to the consumer faster. This is done by keeping tighter control of the company’s internal inventory, internal production, sales distribution, and supplier inventory.

 Key points to remember:

Ø  Supply Chain Management (SCM) is the centralized management of the flow of goods and services and includes all processes that transform raw materials into finished products.

Ø  The five most critical elements of SCM are strategy development, raw material sourcing, production, distribution, and returns.

Ø  A supply chain manager is responsible for controlling and reducing costs and avoiding supply shortages.

Water in Supply Chains:

Water is not a resource that logisticians usually worry about but Climate change and weather activities are likely to affect supply chains – less water available most of the time; then too much water, in the form of floods.

Within the core group of respondents, 75% said they were exposed to water risk, which could affect their future business, revenue or operations. Yet in the previous four years, there had been a 50% increase in water purchases reported by companies and only 29% of companies had set water reduction targets or goals. These numbers indicate a serious situation, which most product companies are unaware of.

The report identified that around 70% of water use is by agricultural supply chains, which include the food and beverage industries and 19% by ‘high impact’ industrial sectors. mining and metals, oil and gas, electric utilities and chemicals.

As water evolves from an operational issue to a challenge for CEOs, companies will need to assess how water quantity and quality can affect their business strategy (and supply chain). One approach is to focus on the three Rs of water:

1.     Reduce water consumption

2.     Replace public water with alternative sources

3.   Recover and reuse wastewater (currently only between 4 and 8% of    water for industrial use is recovered and reused)

In order to significantly limit the impact on water, organizations need the cooperation and involvement of their supply chains. While water management is internal to a company, water stewardship views water use as part of the supply network. Achieving this requires an agreed framework and a verification system overseen by an external organization.