22% of the US based companies maintain a supplier sustainability scorecard, another 23% are developing one. One may wonder why are companies focusing on the sustainability of their supply chain? We will be covering that in the latter part of this blog but the shorter reason is benefits which come with a “Green” Transport Management System. The logistics and transportation industry is increasingly focussing on getting more efficient on board. But the incentivization provided by the government as well as long-term returns have also made them look into solutions which are able to contribute in maintaining low carbon emissions and minimize their carbon footprint.
While we can say that the direct benefits come via incentives, we can also look deeper to know the intangible benefits which contribute more in the longer run.
Why is Transport Management System finding “Green” as new “Black”?
Reduction in the carbon emissions produced by the supply chain is the core motive as well as final result in a Green Supply Chain. With government across the globe incentivizing this outcome, logistics businesses are naturally inclined towards leveraging this opportunity. With effective asset utilization and minimal usage of fossil fuels, sustainable supply chains have also ensured the cost effectiveness in the process. The basic changes which convert a regular transport management system into a “Green Transport Management System” are the monitoring and planning enhancements which keep up the output but the invested resources are used in a smarter way.
Since we have already started discussing the key principles of a “Green Transport Management System”, let’s check out these principles in detail.
Effective utilization of assets
With the objective of getting maximum done under minimum resources, the logistics owners end up in making a remarkable difference with simple changes. Transport management system does this with intelligent analysis of the input and respective outputs in the operations. For example, with the usage of improved quality engine oils, the oil change cycle can be enhanced from 3000 miles to 10,000 miles. The lesser downtime and maintenance schedules surpass the extra expenses incurred on higher quality engine oils. Thus the net result works in favor of the logistics companies. Similarly keeping a tab on the key statistics for the running operations of the carriers can help on various levels. Optimum tire pressure ensures that the fuel efficiency for the carriers remains at its best during operations. Similar results are observed with the fitting of fuel caps, reducing carrier idling time and other preventive maintenance measures to improve the vehicle performance and enhance asset utilization.
Improvements in existing processes
The quantified improvements by transport management system in the existing processes have always garnered exponential output for connected processes like supply chain. On the similar lines, with minor tweaks in the execution of the tasks, the fleets are able to generate higher returns. To start with, if we focus on maintaining lowest possible fuel consumption during carrier trips, we need to make changes into the execution of trips. This leads us to strategies such as route optimization and efficient stacking options via collaborative practices like platooning.
We have already mentioned preventive maintenance by transport management system while elaborating on asset utilization. It needs a special mention here too as preventive maintenance also comes an effective way of improving the maintenance cycle of the fleet. It helps in keeping the downtime minimum for carriers and avoiding the instances of sudden breakdowns. This is a huge relief as the resources invested in making up for a breakdown in between the trip are exhaustive as well as negative for business.
Leveraging Modal choices
A transport management system which is capable of utilizing multimodal transportation options smartly can be a boon for your business. As the truck, rail and inland water transportation have varied performance on the parameters of time taken and cost effectiveness, it takes intricate planning to devise the optimum transportation plan for a shipment. While the inland waterway transportation comes out as a cheaper but slower way of transportation, it is useful for long-haul shipments with some prior planning. Similarly, the trucking can be effectively utilized for last mile pickup and distributions due to its expansive reach with quicker access. It helps to utilize the more effective mode of transportation of carriers according to the needs as it saves on man hours as well as fuel.
Transport management system can also use the same logic for stacking of parcels. Once a total number of shipments with details are fixed, it makes sense to understand whether an LTL or a TL carrier will be more cost effective yet efficient for the task. Intermodal rail or water transportation with a planned shipment makes a huge difference in order to remove the redundant transport vehicles from the road, decreasing the fuel consumption by the same extent.
A complete digital transformation
A “Green Transport Management System” is essentially a digital one too. When we empower the transport management system with the digital mediums, we are basically removing the redundant or paper-based methods. These paper-based methods which cover almost every aspect of the supply chain from work order documentation to trip status updates increase the usage of paper which is increases the carbon footprints for the supply chain. A digital supply chain based transport management system also discards the necessity of other resource intensive processes, such as postal mailing, paper receipts, manual data entry, which consumes too many resources in operation.
Business intelligence applications for assessing carbon footprints
Transport management system can manage transportation business only if they are updated with the latest advancements in the industry. With data considered as the new “Oil” for the business, transportation technology is updating itself with business intelligence solutions which are capable of analyzing the data. The insights which are obtained through the analysis can make a huge difference in the operations as well as the overall growth of the business. For an instance, a brief study of the input/output for TL and LTL carriers concluded that LTL carriers emit around 20% more CO2 than the Truckload carriers. This observation is reasoned with the fact that LTL carriers often have to cover more pickup and drop points while not being fully loaded every time. This gives us a hint that the last mile delivery process can be improved by utilizing the LTL and TL carriers in a better way. Insights like these also help the transport management system to weigh the transport modes and carriers in a better way to make a more profitable and practical decision.
Despite all the materialistic benefits, one of the core motivations for the transport management system owners to step forward for a “Green Supply Chain” is the environmental concerns. It is important to understand that the environmental concerns are real and if not addressed now, developing a sustainable supply chain for the future might not be even possible. It is great to acknowledge that major transportation organizations such as ATA (American Trucking Association), US Department of Energy and European Commission are coming forward with the mandates for encouraging transport management system which propels Green supply chain. But the objectives for a greener business can be truly achieved only with the cooperation of transportation business owners. We are doing our bit by helping out the logistics business in getting green transport management system solutions. If you are looking to embrace the similar solution, let’s get in touch for a quick discussion.
DreamOrbit is a Logistics and Supply Chain Technology Development company. We have been creating meaningful and reliable software products for the industry which is “Always on the go” for the past half decade. We are highly motivated team aimed at innovation. Our philosophy is to “keep challenging the potential within”. With the support of our happy customers and dedicated team, we strive to provide best possible solutions to industry problems. Visit our website to know more about DreamOrbit.