Accepting the Importance of Sustainable Logistics:
At a time when covid-19 forced companies to rethink and transform their supply chains, it also created global level economic shutdowns, illuminating vulnerabilities in production strategies, and difficulty in maintaining the momentum of low-carbon transport. It is believed that global Environmental exigencies if not tackled, could cause social and economic damages that are far greater than those caused by covid-19. Logistics sustainability aims to lower environmental impact caused by the sector.
Highly robust transportation chains are establishing even as climate and environmental conditions are changing. India’s transportation sector is the third most greenhouse gas (GHG) emitting sector, accounting for 14 per cent of our energy-related CO2 emissions; even in Europe, transportation is the biggest climate problem. As per a report, in 2017, 27% of Green House Gas emissions came from the transportation sector.
Data from Gartner’s 2020 Sustainability Survey shows that 66% of organizations expect to pay a hard cost for greenhouse gas emissions in the future. Moreover, 75% of those respondents expect the charges to come at certain point in the next five years, with emissions being a business cost just like cost of freight, direct materials or labor. This is setting a tone for current and future challenges in supply chain, and businesses are being challenged both internally by organizational pressures and externally through government’s sustainability targets. Advent of green consumers are also pushing organizations to develop sustainable strategies. Today, the commitments are on reducing greenhouse gases (GHG) which are generated in the upstream and downstream value chain. Supply chain poses an additional layer of complexity in terms of Greenhouse Gas emissions measurement and transport visibility, which requires a collaborative work approach with all the stakeholders engaged in a complex, & dynamic environment.
Here are some tips to consider while practicing sustainability in logistics:
- Sustainable Inventory Management & Optimization: Inventory Optimization aims to reduce the environmental and social impacts of an industry without affecting its profitability. A sustainable inventory strategy can eliminate inventory wastage by keeping it lean and optimized. 3SC’s Inventory Optimizer uses advanced statistical formulations and simulation techniques such as Artificial Intelligence to arrive at the optimal inventory level at a particular location or in a multi-echelon network. It is capable of forecasting future required inventory levels based on forecasts conducted through advanced machine learning algorithms.
- Planning & Load Management: Optimizing delivery routes and loads requires data to design the most fuel-efficient route, a vehicle needs to take to deliver goods. Vehicle route optimization can create multi-stop routes for Inbound & Outbound Consolidation, Fleet Optimization and cost calculation based on transport time. It is important to ensure that there are no empty runs and proper backhaul identification opportunities to deliver goods on time in a green route planning.
- Technology Enabled Mode of Transportation Selection: Seeking fully electric vehicles and moving away from combustion engine fleets can reduce many greenhouse gases released into the atmosphere. Selecting a mode with minimum carbon emissions requires decisions based on many factors such as distance, weight, fuel type etc. to replace them with an eco-friendlier option. 3SC’s ML engine compute total carbon emission in each case to select an improved and greener mode.
- Other sustainability practices: Some other eco-friendly initiatives that businesses can practice are the use of bamboo and synthetic Resin eco-friendly containers, which are lighter options compared to the containers made from traditional materials and reduce the environmental impact. Implementing IOT solutions such as Digital Labels and Digital Tracking Logs eliminates manual interventions and paper usages.
Sustainable logistics is not optional anymore. Today, sustainability commitment is not only to the environment but to the government and customers. Our mission is to support businesses in improving their supply chain operations while considering environmental responsibility. Above practices are aimed towards decreasing environmental impact in logistics sectors, but such transformation also requires collective actions. As a supply chain leader, we can provide you with green logistics solutions to smooth operations and minimize environmental impacts.
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