Implementation of green initiatives has emerged as one of the top trends in the Logistics & Supply Chain industry worldwide.
The uncertain economic conditions have urged the players of the supply chain industry to rethink their strategies and prioritize long term sustainability as the main focus area. The key drivers instigating this turn around being:
- Increase in supply chain efficiency
- Financial stability by securing greater return on investments
- Improved customer relations
- Time consuming yard checks
- Multiple moves due to ineffective communication
- Lack of information
Top five green initiative that are a must:
1. Effective Transportation Management
Improved logistics strategies like efficient routing & scheduling of vehicles, ensuring full truck loads, changes to receiving policies and loading docks, can enable optimization of the logistics operation efficiency, thereby saving fuel and increasing profitability. Implementation of a well designed freight management software can not only help to cater to all these needs but also helps in effective utilization of the vehicles which leads to considerable amount of fuel saving thereby reducing greenhouse gas emission.
2. Technology Solutions
Implementation of efficient warehouse management systems, and freight management systems, coupled with technologies allows automation of the logistics processes. These advanced technologies offer data accuracy, reduction of paper work, and easy integration with other tools, thereby ensuring higher green benefits for logistics companies.
3. Reverse Logistics
Proper methodic management of returned goods is a key green initiative with significant financial returns. Damaged and unwanted products can be repaired and restored to their original form and placed back in the market to reduce waste and contribute to the environmental cause.
4. Reduced Packaging
Logistics and warehousing companies are becoming increasingly focused to reduce packaging material costs in their effort to make warehousing and distribution centre operations more cost effective. Usage of re-usable / recyclable plastic materials instead of card boards or wood help in reducing their carbon production count and make them more eco-friendly.
5. Preventive maintenance & Damage Analysis
Processes like periodical fleet maintenance and increased driver training improves the vehicles’ cost effectiveness by increasing their fuel efficiency. At the same time a special watch on the demand forecast can help to reduce the number of unsalable products. This can be easily achieved by implementing an efficient warehouse management system which has integrated demand forecasting software. This not only impacts the economic scenario positively but also provides environmental benefits by reducing wastage. Also a well managed and safe return of damaged products adds to the environmental security.
The key success and barriers of implementing green initiatives
- Improved energy efficiency
- Usage of more efficient transport system
- Keeping track of emission scorecard
- Usage of green logistics providers by the 3PLs
- Fuel efficient vehicles
- Horizontal collaboration with companies
- Reduction of miles travelled through re-routing of vehicles
- Lack of knowledge of the best practices
- High cost
- Unwillingness of customers to pay more
- No short term positive impact on the bottom-line, mainly focused on the long term gains
- Data standardization required