Preparing for the new Supply Chain Law – An introductory paper discussing the Opportunities and Boundaries of a digitalized Supply Chain

Umlaut consulting, part of Accenture, Blohmstraße 12, 21079 Hamburg, Germany

^* Corresponding author: peter.schaefer@umlaut.com

Abstract

Sustainability aims at a sound synergy of the economic, ecological and social dimension. To promote sustainable development and guarantee a high living-standard for future generations, all three elements must be balanced. The economy impacts the other two dimensions along the value chain. Particularly critical is the impact of the supply chain as human working conditions and environmental standards must be secured for procurement of materials along complex transportation routes. To tackle this issue, France has passed a Supply Chain Law (Loi de vigilance) in 2017, Britain has passed the Modern Slavery Act which prohibits child labor in 2015 and Germany has passed a Supply Chain Act (Lieferkettengesetz) in June 2021. Furthermore, a EU-wide supply chain law on due diligence and environmental standards for supply chains is expected for 2022. A transparent digitalized version of a company´s supply chain, including its human resources and environmental impact, would facilitate the identification of several sustainability intervention points. Such transparency could lead to not only better and supply chain law-compliant regulations for fairer working conditions and improved social sustainability, but also to optimized circular economy processes. However, there is also the risk that a high level oftransparency in complex supply chains entails very high bureaucratic efforts. With this conceptual outline, we would like to contribute to the discussion of the new German legislation and present a variety of IT solutions to improve and monitor the sustainability of supply chains as well as to reduce the bureaucratic effort which comes with supply chain supervision.