Building a Sustainable Supply Chain

  Blog Post 2019 12 11 Sustainability 3000x2000

Companies have a responsibility to evaluate their contribution to environmental sustainability. Many are taking a fine-tooth comb to find ways to reduce their emissions and waste, and the supply chain is a key focus. 

Amazon’s Shipment Zero program aims to reach net zero carbon shipments, with the goal of 50% of shipments at net zero by 2030. IKEA is planning to only use renewable or recycled materials in their products by 2030. Both companies have additional sustainability efforts with largescale goals. 

These initiatives will not be easy to accomplish, but as innovative companies like Amazon and IKEA lead the way, they will act as examples for organizations worldwide.

Environmental and Delivery Demands Impacting Supply Chains Today 

The growing efforts toward environmental sustainability are no fleeting trend. According to the Environmental Protection Agency, the transportation sector is one of the largest contributors to U.S. greenhouse gas emissions (GHG), producing 29% of U.S. GHG emissions. While the majority is caused by light-duty vehicles, 23% is from medium- and heavy-duty trucks, 3% is from ships and boats, and 2% is from rail. This leaves a substantial amount of improvement for the transportation industry.

In addition to an elevated focus on reducing emissions and waste, companies are facing another urgent trend that can’t be ignored – the demand from customers for faster and less expensive delivery. In recent report by project44, 73% of supply chain professionals say they’re experiencing pressure to improve and expand their delivery capabilities with more than half (55%) saying they’re dealing with the expectation to process and deliver goods faster.

Neither of these initiatives can be ignored. Organizations are forced to improve sustainability while also delivering goods faster. With the growing Delivery Economy and the need to reduce carbon footprints, organizations need to ensure their transportation process is as efficient as possible. 

Leveraging Visibility to Create Emission-Reducing Efficiencies

The digitization of supply chains can result in efficiency gains that can help mitigate the environmental impact. The World Economic Forum estimates that digitization has the potential to reduce emissions from logistics by 10% to 12% by 2025. With a vision to enable a more productive and successful world, project44 believes this include environmental sustainability and that visibility can support organizations as they strive to reduce their carbon footprints. 

Visibility technology can enable supply chains to build a better strategy to improve sustainability and reporting for compliance programs for net-negative (or zero) carbon emissions. With visibility and analytics capabilities, companies can analyze their shipments to identify areas for improvement, such as identifying optimal modes for specific lanes and quantifying the impact of mode switching. This allows organizations to choose the routes and modes that will create the least amount of waste.

With high-quality visibility data, supply chains can improve several practices that lead to waste.

Dwell Times and Idling

According to the EPA, long-duration truck idling results in 11 million tons of CO2 and 180,000 tons of NOx each year. With more visibility into where a truck is and when it will arrive at its destination, carriers can reduce dwell time. Rather than idling for hours waiting to unload, trucks can show up, unload, and be on their way. Leveraging visibility, project44 customers have improved the accuracy of their arrival times, allowing them to improve planning and making the delivery process faster and more efficient. 

Magna International, a global automotive manufacturer that has produced more than 3.5 million vehicles including models for brands like BMW and Jaguar, analyzed their visibility data to identify possible process improvements. They found that shipments were late 2% of the time and early 50% of the time, and both scenarios were causing missed dock appointments. Having access to this information allowed them improve processes to ensure an additional 40% of their shipments arrived in the 30-minute appointment window, significantly reducing dwell time.

Inventory Management

As organizations try to keep with customer demands, many end up stockpiling inventory to make sure they have the right products on hand right away. With more detailed and real-time information about inventory location, organizations don’t have to resort to costly stockpiling practices to ensure product is available for purchase in a timely fashion. They can use this data to better predict lead times and the variability of lead times to improve inventory planning.

The fashion industry has encountered criticism for destroying or throwing away large amounts of unused product. Some companies incinerate unused clothing, which releases emissions into the air. When companies can plan better, less product ends up in landfills or being destroyed.

Traceability

Supply chains are complex, and with many suppliers involved in the process, companies don’t always know where their materials originated. With increased concerns around sustainable and ethical practices, companies are being held accountable for not only their suppliers, but the suppliers of their suppliers. 

Customers want to know that their products are sustainably sourced, and this requires companies to gain more visibility into upstream activities. By leveraging project44’s Collaborative Visibility solution, customers can gain insight into inbound shipments. With a more comprehensive view into their entire supply chain, organizations will be able to improve traceability. 

Visibility can support organizations as they strive to improve environmental sustainability. project44 customers are already seeing vast efficiency improvements through visibility. As they continue to expand their use of advanced visibility, these results will continue to grow, helping organizations reduce their carbon footprint and build a sustainable supply chain.