Preparing Supply Chains for the Energy Transition
The future of energy in supply chain operations is rapidly evolving, driven by a global shift towards electrification and sustainability. To address the critical risks and opportunities posed by this transition, the Council of Supply Chain Management Professionals (CSCMP), sponsored by MHI and WERC, has released a pivotal report: “The Supply Chain Risks of the Energy Transition: A Blueprint for US Action.”
Why the Energy Transition Matters to the Supply Chain
As this report points out, the electrical supply ecosystem is frequently taken for granted. While many assume power will always be available, an increasing global demand for energy (especially in India and China) combined with the desire to reduce the use of fossil fuels is reducing electrical capacity. Additionally, new uses of technology such as large scale data centers, machine learning, artificial intelligence, crypto mining, and the extraction of crude oil and natural gas are further straining capacity.
To ensure a reliable electrical supply for the future, supply chains must take proactive steps to understand electrification, navigate its complicated regulation system, and adopt innovative technologies. The report emphasizes taking a multi-tiered approach as “no single approach can meet all future needs for electric power in the US or globally.”
Some Key Report Takeaways
• The US electric grid relies on numerous components, which are not manufactured in the US. Increasing America’s ability to manufacture these components is essential to the energy transition.
• Electrification can offer efficiencies and cost savings, but only if current pricing models are maintained and the supply chain evolves to use electrical power efficiently.
• It’s critical for warehousing and distribution to upgrade infrastructure to support electric vehicle (EV) fleets. Distribution networks will also need to be redesigned to accommodate the requirement of EV fleets.
• Supply chains should invest in such innovation as advanced route planning software, fleet management systems, and energy management for warehouse facilities.
• Material handling suppliers should focus on the production of equipment such as electric forklifts and pallet jacks.
• Manufacturers need to secure a stable supply chain for components necessary for electrical equipment such as batteries and electronics
Download the Report
As the energy transition accelerates, supply chains must adapt to an increasingly electrified and sustainable future. The findings in “The Supply Chain Risks of the Energy Transition: A Blueprint for US Action” provide valuable insights and practical steps to help you withstand these emerging challenges. By investing in infrastructure upgrades, embracing innovative technologies, and securing reliable sources for critical components, industry leaders can be well-prepared to navigate the changes brought by the energy shift.
To take a deeper dive into the report’s recommendation for supply chains, download the full report, “The Supply Chain Risks of the Energy Transition: A Blueprint for US Action.”
