Sustainable Supply Chain Kuebix

6 Ways to “Go Green” With Supply Chain Technology

Sustainability initiatives and efforts to “go green” are trending through every industry and many are focusing on the supply chain. There are innumerable reasons why companies are prioritizing sustainability. These reasons range from everything from worries about climate change, the need to save money and streamline operations, to increasingly eco-friendly customer bases and the need to please investors that are prioritizing sustainability.

Bloomberg New Energy Finance reported in January that global venture capital investment into startups focused on sustainability jumped 127% to $9.2 billion in 2018, which is the highest seen since 2010. If that increase in investments doesn’t show where the economy is headed, Forbes recently reported on a study which found that:

  •      •     68% of Millennials bought a product with a social or environmental benefit in the past 12 months.
  •      •     87% of consumers will have a more positive image of a company that supports social or environmental issues.
  •      •     88% will be more loyal to a company that supports social or environmental issues.
  •      •     87% would buy a product with a social and environmental benefit if given the opportunity.
  •      •     92% will be more likely to trust a company that supports social or environmental issues.

There is plenty of evidence that sustainability initiatives can improve companies’ bottom lines and strengthen customer loyalty and brand awareness. Finding the opportunities to implement these green initiatives, however, can be seen as a challenge for many organizations unfamiliar with this new terrain. For most companies selling physical products either B2B or B2C, the low-hanging fruit for environmental change lies within their supply chains.

The simplest and most effective way for companies to understand, streamline and make strategic changes to their supply chains is to leverage supply chain technology like transportation management systems (TMS). With the help of technology, companies can make environmentally friendly changes to their supply chains and add to their overall company sustainability initiatives.

Here are 5 ways supply chain technology can help companies can “go green”:

  1. Plan Routes More Effectively

According to the American Trucking Associations, 3 billion gallons of fuel was consumed for business purposes in 2016. That number has likely grown as gross domestic product (GDP) in the United States increased 2.3% from 2016 – 2017 as reported by the World Bank. Reducing fuel consumption should be a priority for businesses not only to benefit the environment but also to reduce transportation costs.

Technology can help logistics professionals choose the best route for every load, something that can be nearly impossible to do by hand. Instead of manually comparing routes and consolidating loads one by one, routers and warehouse employees can leverage optimization technology to automatically create the perfect load based on predetermined parameters. An algorithm in the technology will ensure the fewest number of miles are driven for the maximum number of orders per truck, reducing overall fuel consumption.

  1. Select the Best Mode

Selecting the best mode for every shipment is another way to ensure less fuel (and money) is used on a shipment. Many shippers don’t have time to compare LTL, FTL, ground freight pricing, and parcel for every order, however. With a transportation management system in place, every available mode type can be easily compared on a single screen. That means orders which would normally be shipped as LTL, for example, may be able to be shipped as parcel. By choosing the best mode type for every shipment, companies reduce wasted space on trucks and save money in the process.

  1. Fill Empty Miles

For companies with their own fleet assets, filling empty backhaul and deadhead miles can be a lofty goal. Finding and booking available backhaul freight can be nearly impossible to do manually. It can require one or more individuals to dedicate all of their time to find opportunities, and more often than not those opportunities aren’t repeatable. By connecting to a transportation management system with a large shipping community like Kuebix, fleet owners can be easily matched with available backhaul freight. This means that trucks drive empty less of the time and less fuel goes to waste.

  1. Waste Less Fuel Idling in the Yard

Idling is a large culprit of wasted fuel consumption. According to the U.S. Department of Energy, a typical long-haul truck “idles about 1,800 hours per year, using about 1,500 gallons of diesel.” That’s a shocking amount and most certainly cutting into companies bottom-lines, not to mention contributing to overall fuel emissions. While much of this time idling comes from regulated rest periods, some of it comes from long waits at gates and for available docks in yards. Not only are detention fees being racked up, fuel usage is as well.

Companies who want to reduce idling time in their yards can leverage supply chain technology like yard management systems (YMS) to streamline operations. Features like gate check, dock scheduling and hostler optimization can speed up operations in the yard and get drivers in and out quickly.

  1. Embrace the Circular Supply Chain

The circular supply chain is about taking apparent waste materials and returned goods and turning them into products which can be resold. Shippers can embrace this level of “reduce, reuse, recycle” by using a transportation management system to help track their orders and returns. Complete visibility to products down to the SKU level can help OS&D and customer service departments understand exactly where returns or damaged products are and turn apparent trash into revenue streams.

Circular Supply Chain

 

  1. Reduce the Paper Trail

At their core, supply chain technologies are helping move traditionally operating supply chains to the digital age. That means saying goodbye to the physical paper-trail associated with shipping and instead keeping track of all operations online. By leveraging cloud-based supply chain technology, companies save paper while also speeding up their operations.

Should My Company “Go Green?”

If you’re asking yourself if your company should try to improve their environmental footprint with a sustainability initiative, the simple answer is yes. No matter why you decide to “go green” there will likely be positive benefits for your company. You’re likely to save money, please customers and investors and make a positive impact on the environment. A large portion of companies’ carbon footprints stems from the supply chain, making it the obvious place for many companies to begin their green initiatives. With the help of supply chain technology like transportation and yard management systems, the overall environmental impact can be reduced in a smart and simple way.

valentines day chocolate supply chain

Chocolate and the Supply Chain

Valentine’s Day and chocolate go hand in hand for much of the western world. Americans alone consume 2.8 billion pounds of chocolate each year! This means that the supply chain needs to work hard to keep up with the demand. The chocolate supply chain isn’t as palatable as the tasty treat, however. It’s riddled with issues that span from fair trade concerns to sustainable harvesting practices. Once it reaches the continent it will be sold on, supply chains battle with temperature control and getting the final products onto store shelves before major holidays like Valentine’s Day.

chocolate infographic

A Brief History

Chocolate has been consumed by humans dating back as far as 1900 BC, and the practice isn’t likely to end any time soon. The Olmecs (modern Mexico) were the first to start using ground cocoa seeds for consumption. In fact, most of the Mesoamerican people used cocoa to make chocolate beverages. The English word for chocolate is derived from the Classical Nahuatl word “chocolātl”.

Fair Trade Initiatives

Thousands of years later, consumers like their chocolate in a myriad of forms. Whether it’s hot, cold, mixed into a dessert, or in bar form, chocolate is almost universally loved. It’s tragic, therefore that some supply chain practices aren’t as ethical as others. There are growing concerns about the treatment of laborers in countries like Côte d’Ivoire, where roughly 43% of the world’s cocoa is harvested.

New fair trade and sustainability initiatives began to gain support in the 2000s as many chocolate producers seek to address concerns about the marginalization of cocoa laborers in developing nations. International producers like Hershey have put out commitments to source 100% Certified and Sustainable Cocoa by 2020. Other companies like Aldi, a German discount supermarket chain, are using more fair trade cocoa in their assortment of products.

Manufacturing Process

Once the cocoa beans have been harvested, they’re transported by ship to the continent they will be produced and sold on. The cocoa beans are sifted for foreign materials, roasted in large rotating ovens, and cracked open. Once the shells are blown away, all that’s left are crushed and broken pieces of cocoa beans which are called “nibs.” These bits can be found in specialty chocolate shops and are ready for consumption, though quite bitter.

The cocoa nibs are then ground into a thick paste known as chocolate liquor, though they don’t contain any alcohol. Cocoa butter is either removed at this point to produce cocoa powder or other ingredients like milk and sugar are added to improve the flavor of the end product. The chocolate is rolled through a series of mixers at this point to achieve the smooth, silky texture associated with chocolate, otherwise you’d be left with a grainy texture in your mouth. From here, the chocolate is tempered with heat and put into molds before being packed and prepared for shipment!

Final Mile

Transporting the final product to the end consumer is a challenge for supply chain professionals. In order for chocolates to retain their shape, they need to be in temperature controlled areas at all times. This means reefer units and quick load and unload times at every dock. Leaving chocolates idling in the yard can ruin the entire shipment.

Since the supply chain is so long and usually involves international harvesting, the time between initial order to final sale can span months. Valentine’s Day chocolates may have been originally purchased by a retailer’s procurement department about the time Halloween candy hit store shelves. The nature of specialized product makes the time constraints even more difficult. If chocolates are even a few days late, they could miss their designated holiday and need to be sold at a reduced price.

No matter where you get your chocolate from, it undoubtedly has a long history of where it came from and how it finally arrived in your hands. It’s important to understand how the supply chain plays a role in getting everyday objects many take for granted to their end destination.

Circular Supply Chain

Circular Supply Chain – The Missing Link

The phrase ‘input equals output’ has been flipped on its head. Now, modern supply chains are seeing the benefits of ‘output equals input’ in their operations.

In the past, supply chains were architected in a linear fashion. They started with raw material suppliers shipping materials to a manufacturing facility or assembly plant, which in turn shipped finished goods or parts further down the supply chain to a distribution center to be delivered to end customers. The workflow was point-to-point, linear in fashion, and end-products, after a while, typically ended in the trash.

Today’s supply chains are becoming circular by adding a link to connect the beginning and end of the chain. This link encompasses returns and recycling, improving sustainability and the environment. The circular supply chain is “lean” in nature, eliminating waste and reducing the carbon footprint. It also lowers costs while passing on sustainability benefits to trading partners.

Ever heard the quote, “One man’s trash is another man’s treasure?”

That is what the circular supply chain is about – taking apparent waste materials and returned goods and turning them into products which can be resold. Circular supply chains turn waste into opportunities as regulations on recycling and proper disposal of manufacturing byproducts become tighter. Often byproducts can be reclaimed and re-used within the manufacturing process where companies can develop new revenue sources for products that were previously discarded.

Many government regulations are pushing businesses to adopt the circular supply chain by creating laws and regulations around recycling and waste disposal. These include:

• EU Packaging Directive – requires all countries in the EU to recycle 50% of their packaging waste.
• Japanese Recycling Laws – require businesses to recycle packaging materials into something reusable.
• California Recycled Content Laws – no plastic bags, 25% of all plastic containers must be recycled, and more.
• UK Landfill Directive – all UK-based companies must recycle or treat their waste products, regardless of their size and turnover.

Supply chain sustainability is becoming more and more important as new regulations and social initiatives impact shippers. There are many ways to reduce the carbon footprint of shipping freight, to learn more about how Kuebix helps shippers reduce their footprints, click here.