31 Jul What Can You Do to Follow The Frog?
In part one of our series on environmental assessment, we discussed the concept of “following the frog” and how transportation logistics providers must make sustainability a priority in supply chain optimization.
Here, we’ll review how these providers can begin these assessments and what steps can be taken to move supply chains toward a state of complete environmental sustainability.
A New Look at Sustainability
Reducing carbon emissions and improving supply chain sustainability may have begun as nebulous concepts that few business owners bother to track, but these goals have evolved over time. Now, sustainability is a necessary part of disciplined decision-making that supports supply chain efficiency.
Business owners interested in “following the frog” must reframe their perspective of energy consumption to fit this mindset. When you acknowledge the opportunities for value-driving improvements to the supply chain through better energy efficiency, it becomes a straightforward task to gather the data necessary to support these decisions.
Assess Overall Energy Use
You might be surprised at how many opportunities you find for reduced energy consumption within your business’s supply chain. There’s real value to be found and real money to be made, all the while improving the efficiency of your operation and contributing to the well-being of the environment.
Broadly, this process begins by reviewing how much carbon is being emitted during each step of the supply chain to determine where the biggest opportunities for improvements are. Logistics providers performing these assessments must ask a fundamental question: What emissions are necessary for the bare bones operation of the supply chain? When the essential processes are determined, it becomes easier to examine which areas could be optimized or reduced to improve sustainability overall.
Map Out Processes
Business owners should examine their supply chains and create a process map that breaks down each source of carbon emission. Those working with third-party logistics providers may have already prepared this from previous optimization analysis. The goal is to examine each activity that produces CO2, determine what type of energy is used, how much energy is needed, and where the energy goes. Leave no stone unturned. Emissions related to material disposal and recycling must also be accounted for.
Determine the Essentials
Next, determine which emissions would be considered mission-critical for the most basic operation of the supply chain. Not all sources of emissions can be eliminated, but the typical supply chain will have plenty of inefficiencies to note in this review. Common culprits include a lack of consolidated order shipping, sourcing production materials from distant regions, and un-optimized truck routes during distribution.
Weigh the Cost/Benefit Ratio
Of the identified energy aspects that have room for improvement, examine the cost/benefit ratio of each option. Carbon reduction options must be assessed for what effect they’ll produce, what expenses these improvements will incur, and how easy each will be to implement. Not all green initiatives will be feasible for every organization.
Strategies for Energy Reduction
An underlying principle of sustainability is demand reduction: Changing operations to require less energy input through energy efficient design and replacement of carbon-based energy sources with renewable alternatives.
Much like traditional supply chain optimization, strategies for energy reduction are unique to each organization, depending on what is being manufactured and how materials need to be transported. However, there are several strategies that can produce valuable energy reductions no matter what type of organization you have:
- Consolidation of shipments during transportation and distribution: Aside from reducing the number of shipments that vehicles will need to make, shipment consolidation reduces the number of duplicate export fees that global supply chains receive.
- Locally sourcing materials rather than shipping from distant locales: Although local sourcing may cost more up front, sourcing nearby materials reduces the energy output required for procurement and can significantly impact a supply chain’s carbon footprint.
- Switching to more sustainable materials or production methods: Suppliers may be willing to accommodate these goals, but if not, finding new suppliers who share your vision may be more profitable in the long-term.
- Renewable energy sources, such as hydroelectric, wind, or solar power for manufacturing: Renewable, clean energy is easier on the environment and can be just as efficient as carbon-based energy systems.
- For vehicle-based transportation and distribution, consider switching from carbon-based fuels to compressed natural gas fleets. Although compressed natural gas vehicles cost more up front, they cost less to operate and are effective at reducing the widespread vehicle emissions inherent in ground transportation.
Follow the Frog
Whether you’re a business owner, a transportation logistics provider, or an executive in charge of supply chain operations, there’s no excuse for ignoring the impact of supply chain emissions on the environment. Moving forward, logistics providers must alter the paradigm of how sustainability is viewed. Aside from its importance for the environment itself, sustainable supply chain practices offer businesses forward-thinking ways to reduce waste, cut down on energy use, and make their organizations more profitable across the board.
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