Ascertaining Supply Chain Deforestation: Unilever Using Geolocation Data And Satellite Imagery

In order to understand exactly form where it’s the raw material for its products, which range from ice creams to deodorant, come from, Unilever is making use of a combination of advanced satellite imagery and geolocation data.

According to Marc Engel, the company’s chief supply chain officer, tracing back the exact origins of those ingredients down to the individual farm or field has historically been very hard for Unilever as well as for other multinationals.

“When you traditionally look at these supply chains, they’re very long and they’re very un-transparent … You are at the end of it, when you consume your cup of tea or you wash your hair with Dove or you eat a Ben & Jerry’s, you’re at the end of that chain. And then at the beginning of the chain is usually a farmer, or a company that uses the land. And then there’s a whole host of parties in between,” Engel said in a television interview.

One of the major raw materials that has come at forefront of debate and discussions because of the huge risks of deforestation associated with it is palm oil which is used as an ingredient in grocery products from biscuits to shampoo. It is alleged that plantations for palm are made by clearing away trees and replacing them with the more lucrative oil palm plants.

It will “achieve a deforestation-free supply chain by 2023”, Unilever has stated.

Details of the oil suppliers, refineries and mills from where it procures palm oil were published by Unilever in 2018. However like any other manufacturer, the company relied on the data provided to it by third parties who reportedly verified the sites and certified the sources to be sustainable. A similar procedure was also used for other commodities such as cocoa. Companies like Unilever depend on such third party certification to confirm where crops are grown.

“But, as a company, I still don’t know where it exactly came from,” Engel said in the interview.

On the other hand, using satellite imagery makes it relatively straightforward to see the source of the products and directly ascertain whether deforestation had been done at the source of the raw material. However the constraint is that it is difficult to say for certain whether the suppliers of Unilever had sourced the raw materials from the places indicated in the satellite images because such images may be made up of several smallholdings.

In order to get a more accurate picture, Unilever has now turned to tech.

In order to view a crop’s journey from the field to a processing plant, known as the “first mile” of the supply chain, the company is now working with software company Orbital Insight. Currently the two companies are working on a pilot project which makes use of anonymized geolocation data from mobile phone signals for monitoring where raw materials are grown and transported to.

“We were able to use the (anonymized) cell phone data to actually track the (farm) trucks from parking lot to parking lot and count the number of trucks going to each parking lot and give (Unilever) a map … of what their supply chain actually looked like, all the way back to the (oil palm) concessions,” explained James Crawford, CEO and founder of Orbital Insight, said in a television interview. 

(Adapted from CNBC.com)



Categories: Creativity, Economy & Finance, Strategy, Sustainability, Uncategorized

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