You might think going green means missing out on profit opportunities, but many businesses have turned sustainable initiatives into bottom line savings and drivers for growth.
There are plenty of reasons to focus on ‘greening’ your logistics: reputation management, environmental legislation, saving the planet… But cost savings are seldom mentioned and that’s because many assume environmentally friendly measures don’t make money. That’s simply not true.
There are many companies which have turned a focus on green into a positive impact on the bottom line. The challenge is spotting opportunities. Scrutinizing your supply chain will likely help you identify plenty of quick wins, however, the real value lies in forward thinking. Here we provide a few examples of how companies similar to yours have benefitted and where to start.
Aviko, a Dutch potato producer, and CHEP Benelux, a logistics packaging provider, joined forces to save 85.529 m3 of wood and reduce CO2 emissions by 889 tonnes. How? By switching to standardized, reusable pallets. The new pallets led to shorter handling times and as they can be reused, there is no need for trucks to dispose of the used pallets.
Clothing giant Levi Strauss & Co has pledged to achieve zero discharge of hazardous chemicals by 2020. As part of this, the company has altered its manufacturing process and now uses laser etching to create design elements on denim instead of chemicals.
This method cuts finishing times down from half an hour per pair of jeans down to 90 seconds and allows for more local production facilities and shorter lead times.
Back in 2007, P&G set itself the target of reducing the distance traveled by its trucks by 30%, within eight years. They did this by working with partners to redesign their supply chain and create ‘green corridors’ that favor rail and inland shipping. Improved capacity planning helped ensure all trucks are as full as possible and moving distribution centers closer to clients reduced emissions even further. These measures and others helped P&G save close to $1bn and drastically reduce CO2 emissions and water wastage.
So what do you need to start designing a sustainable supply chain? There are a few interconnected elements you need to explore.
A TMS such as Alpega’s provides invaluable insight into your supply chain and amasses huge amounts of data. Of course, it’s not just about collecting data; it’s about doing something with it. Research by Forrester found that between 60% – 73% of data collected by a business is not analyzed. That’s partly because there’s so much data out there, but also because data gathering is often carried out without a clear objective. Make your goal green logistics and sustainable savings.
Artificial Intelligence (AI), Blockchain and the Internet of Things (IoT) are all exciting developments and each has the potential to revolutionize logistics. Using AI to streamline supply chains, for example, can ensure optimized routes, minimize the number of empty trucks on the roads and cut down CO2 emissions . Don’t shy away from researching less hyped technology. Reusable packaging for example, is an area that is showing great potential.
Aligning your objectives with those of your logistics partners is the quickest way to uncover sustainable, green opportunities. Shared goals and closer partnerships lead to mutually beneficial projects. Working with competitors to optimize the use of freight is a less popular form of collaboration, but worth considering for more open minded companies!
These examples are a tiny snapshot of what has already been achieved in the domain of green logistics. Plenty of other initiatives have been successful and the potential gains will only continue to grow as data and technology combine and cross sector collaboration becomes more common.
There’s no excuse not to start pushing a greener logistics operation – start pulling together a business plan right away.