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Supply Chain Resilience Means Smart Water Management Featured

Supply Chain Resilience Means Smart Water Management pouring water on person's hands

Water isn’t an abstract threat to global supply chains. Right now we’re seeing the impacts of water scarcity play out across major manufacturers reliant on computer chips. Taiwan, a global hub for the manufacturing of semiconductor materials, has pared back its production in the face of the region’s worst drought in over 50 years. This event has far reaching consequences on the supply of highly demanded chips across industries,  and has forced major automakers to shut down plants as a direct result.

Water has become an increasingly scarce and costly resource for business. Climate change, population growth and economic development have led to growing competition for one of humanity’s most needed resources. As a result, studies project a global freshwater deficit of 56% by 2030, an increase from the 40% shortfall projected by the U.N. in 2015.

Water-related risks to businesses are acutely felt in their supply chains, which often account for a tremendous portion of a company’s total water footprint, particularly if their supply chains include water-stressed regions.

Vulnerabilities to water stress have been further underscored and exacerbated by the COVID-19 pandemic. As business leaders and supply chain decision makers assess the impacts of the past year, diversification of supply chain, reshoring and other strategies will be implemented. The threat of climate-related events, including water scarcity, must be calculated into these decisions, as relocating operations to different regions could open up the supply chain to overlooked water risk.

To address the challenges of water stress on the supply chain, we must first address to the two underlying challenges that stand in the way of a company’s path to water resiliency.

The first challenge is that despite more organizations setting water goals, corporate action is still disproportionate to the magnitude of the issue. This is particularly true at the facility level, where managers often lack the tools and expertise to deliver on corporate water goals. Partnering with GreenBiz, Ecolab recently developed a survey to better understand the state of corporate water management, which showed that only 38% of respondents reported water as a strategic corporate initiative that is proactively managed across their operations.

The second challenge is that current water governance is not equipped to effectively manage challenges shared within water basins. Local government action is necessary to properly allocate investment and ensure that the community has the infrastructure it needs to not only access water but make the most efficient use of it as a resource. Inadequate management of water resources by governments, communities and water users has led to the depletion and pollution of freshwater resources. Collective action across the public and private sectors is essential. Because water is a shared resource, the challenges and solutions must be shared as well.

While governance will play a major role, companies can leverage available powerful tools that will enable them to understand their water-related risks and develop strong water management strategies. For example, Ecolab’s enhanced Smart Water Navigator is a free online tool that guides companies on their journey toward smart water management, helping them understand the true value of water to their operations. The tool also provides actionable guides based on industry, location and current water performance.

The tool walks users through four smart water management steps to help drive  water goals, whether you’re just starting your water management journey, or you’re looking to track progress on a more advanced program. The steps are:

  1. Identify the full value of water  to your operations and enterprise wide, to gain a more holistic understanding of how water stress and risks are impacting your business.
  2. Set meaningful targets based on local conditions that enable a specific facility to meet its operational needs without disruption and contributing to water stress in the surrounding community
  3. Implement the actions and solutions needed to deliver reduction targets that align with industry recommendations
  4. Track performance over time to document progress against goals and continuously reassess operations for new risks and growth opportunities

Smart water management is key to addressing water related risks and opportunities in an organization’s supply chain.  Adopting better water management practices will help companies be more resilient in the face of operational and supply chain disruption, so they can continue to serve their customers effectively without negatively impacting the health of surrounding communities and environment.

Emilio Tenuta, is Senior Vice President and Chief Sustainability Officer at Ecolab. Tenuta’s 36-year tenure at Ecolab includes 25 years of technical, marketing and business management experience in various industries including Food and Beverage, Pharmaceutical, Lodging, Healthcare, Primary Metals and Automotive. In the past eleven years Tenuta has led Ecolab’s strategic sustainability journey focused on corporate responsibility, internal environmental stewardship and helping customers operate more sustainably.


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