New modelling provides greater scrutiny for supply chains

Over the past few years, there has been an aggressive and sometimes corrupt agricultural push into the Cerrado region of Brazil.

Since 2001, nearly 300,000 sq km of biodiverse forest, grassland and scrub has been cut down or burned, with some of the land being used for the lucrative production of soybeans that are exported for animal feed.

A recent investigation in the UK found that chicken sold in major supermarkets were fed using these destructive soybeans. The question was asked, should consumers be made aware of this, especially since some of the chicken would have been labelled as sustainably produced, based only on how the chicken was raised in the UK?

It’s up to regulators, producers and retailers to answer that question, but scrutinising supply chains so there is information to inform the discussions is the task of researchers like Dr Arne Geschke (PhD(Science) ’13 MEd ’20).

“We essentially look at and assess the elements in the supply chains operating in countries and industries. We look at all relevant details,” Geschke says.

Global interdependencies

Companies are often unaware of the complexity and implications of their own supply chains, but they may well assess the larger elements that might allow them to maximise profits by say, consolidating factories, reining in energy use or moving production to a country where labour costs are lower.

The analysis done by Geschke has other goals. He, and the University’s Integrated Sustainability Analysis (ISA) team, crunch huge, supply chain numbers that can reveal hidden environmental devastation, worker exploitation, child labour and corruption.

“It’s so easy to open a can of worms with this,” says Geschke who now, thanks to COVID-19, mostly works from his home in the Sydney beachside suburb of Coogee. “Australia imports of a lot of carbon-heavy tech goods. We might want to reduce our carbon load but we don’t always have control over it. There are hidden interdependencies with other economies.”

The rise of green investments has made these insights important to more people with financial advisors now competing to offer the greenest possible investment portfolios to their clients. At the same time, companies want to find any dark dealings in their supply chains before someone else drags them into the light.

Assessing and collating this complex data

There are two main ways of gathering supply chain information. The first is called lifecycle assessment which uses a bottom-up approach. You start gathering information about a company then move to its suppliers. “This is labour-intensive. What happens is you quickly run out of puff or funds,” says Geschke, noting that supply chains can have millions of data points to interrogate.

“Take your mobile phone. It probably has some 10,000 components in it,” says Geschke. “Each component is probably created in a factory with heaps of inputs as well. Go deeper with this game, and in no time, you end up with millions or even billions of data points.”

The other method, and the one mostly used at the University, is a top-down approach called input-output analysis and it’s based on the fact that governments and organisations all around the world publish their economic data. That is certainly the case in Australia where businesses are obliged to report in great detail to the Australian Bureau of Statistics which then publishes the information in about 120 categories.

One challenge is ensuring that the information has integrity. For example, the laws of some countries might allow products to be called sustainably produced that would never be allowed that label here. Other countries simply manipulate their figures. The ISA team, working out of the School of Physics, puts a lot of effort into finding the most reliable sources.

“You can ask a commercial data provider for the carbon footprint of a big company, but different providers will have different numbers because there isn’t a universally-agreed way to compile the information,” says Geschke.

“Here at the ISA, we’re working on a system that would allow for a unified global approach that compares apples with apples.”

Helping with the mathematical and hardware design legwork is Geschke’s long-time colleague, Manfred Lenzen, who is Professor of Sustainability Research in the School of Physics. Any other names on the many papers they produce together are usually experts from the fields they are analysing: for a study on the impact of fishing, a fisheries expert would join the team.

A passion to develop solutions to social and environmental problems

Using the right information and mathematical modelling, you can stitch together the information of two or more countries to get a sense of how they feed into supply chains for various products and commodities. This, and dealing with the hugely powerful computers they use, is the fun part for Geschke even though he didn’t start out thinking mathematics would become so consuming for him.

“I spent most of my teenage years cycling through the forest round Hamburg, where I was born,” he says. “Maths just seemed the way to go.”

After graduating from Hamburg University, he found himself working with the car maker, BMW, developing mathematical models to simulate engine behaviour, “It was so boring, and I changed fields.” By this time, he had met his future partner. They were together at university where she was an Australian studying violin. Australia soon became their shared destination.

Working at the University, Geschke found his passion as he helped develop ways to see environmental and social problems that were hidden by complexity, distance or outright deception.

Seeing can be difficult. And sometimes people don’t want to see at all.

UN Sustainable Development Goals

“Carbon footprint should be the star of full supply chain studies and we’ve been raising the alarm for maybe 25 years,” says Geschke. “But people are still umming and erring about it. There are times when I think, ‘Why am I doing this?’

“But there are other important issues to pursue. Like if you look at data on corruption, you start to understand inequality and how much our western bubble relies on cheap labour from elsewhere.”

Without doubt, the modern world is held together by supply chains, but the ISA also looks at other areas.

“We’re currently running simulations for the United Nations’ (UN) sustainable development goals,” says Geschke. “There are seventeen and we are officially tracking the global progress for a few of them. We use pretty serious computers to run programs but for each year they have to run non-stop for 48 to 50 hours.”

Obviously, a sustainable development goal is a large enterprise to map. But even the supply chain of a single consumer product can quickly reveal a vast landscape of inputs.

Take the rare earth metals used in mobile phones. They might be mined in Uganda or Mongolia, taken to another country for processing, sent on again to become components, and again to wherever the phones are assembled. Then there are the phone’s other metals, plastics, glass and constructed components to consider.

For Geschke, the hard work and dedication has recently seen him become one of the most internationally cited researchers in his field. Some of his studies have even crossed from academia into the news media, with one being what you might call a hit. The study investigated the effect of COVID on the international economy.

“That was massive,” he says. “A lot of news outlets ran it as a story.”

Drawing on the findings of another of their studies that looked at the carbon footprint of international tourism, the ISA was able calculate that pre-COVID, international tourism was responsible for between 7% and 10% of carbon impacts around the world, either directly or indirectly. That’s a sizeable proportion.

“These effects are certainly interesting to look at scientifically,” Geschke says. “But really, it all comes down to how can we actually survive on this planet?”

Written by George Dodd for the Sydney Alumni Magazine.
Portrait photography by Louise M Cooper.
Hero photo by CHUTTERSNAP on Unsplash.