Advances in sustainability in warehouses and distribution

summary

Outbound supply chains may be called distribution or logistics, but anything that occurs after production moves the finished product to the customer. While it is relatively easy for supply chain experts to prove successful in improving the cost and service levels of this channel, it is more difficult to verify another important area of sustainability.

One of the challenges is that we still don’t agree on the most accurate measurement methods to quantify sustainability outcomes. Another is that much of the scope 3 (indirect) emissions data required to demonstrate distribution-related sustainability performance is not tracked or available from suppliers or other third parties.


However, savings in both emissions and operating costs can be important. This is because looking at the supply chain through sustainability lenses can identify new opportunities to identify and reduce waste beyond what is caused by process improvement methodologies such as Lean and Six Sigma.

The ability to provide evidence from these waste reduction databases can help supply chain teams demonstrate their contributions to achieving corporate sustainability goals. It also paves the way for approval of new or expanded green initiatives. Below are some examples of how to approach these projects in three major areas, including how to start collecting metrics to predict and prove their impact on your business.

Sustainability in warehouses

First, identify areas where warehouse facilities can reduce waste and related costs. for example:

What materials do warehouses dispose of in considerable quantities and what sources are those materials? Is there a significant replenishment from the warehouse to the warehouse? What is the source of energy in the warehouse?

Next, quantify utilization and costs for these areas by collecting data such as:

What resource consumption is reported on electricity, water and other utility bills? What is the approximate amount of waste produced? What is the exact waste production based on the weight of the exact source of resource consumption (coal? sun, etc.); what is the distance the waste is disposed of, and what type of waste (landfill? distance of incineration of electricity generation?)?

For easily tracked items, establish a system for collecting, aggregating and analyzing resource consumption and waste. (Automating this process saves time and avoids mistakes.) For more difficult items, consult a supplier, such as a utility or waste disposal company, to help.

For example, if you know that your warehouse is disposing about 100 pounds of plastic transport materials per day, you can calculate the long-term savings on your investment in a system of reusable containers (for company options). These hard numbers help greenlight that investment and provide a “before and behind” cost as the project progresses.

Packaging sustainability

In the packaging area, you will explore opportunities to reduce your company’s carbon footprint by asking questions such as:

Does the warehouse regularly ship similarly sized containers to the same location? In that case, can I integrate or implement a returnable container system? Is your container size larger than your product? Can I optimize the container size to reduce empty space? Can I move or increase the recycled content of packaging materials?

Next, start assembling the data for the line item, including:

The exact packaging weight (including waste) consumed by the material recycled content of the packaging material as a percentage of the total weight used: approximate packaging weight used

For items that are easy to track, measure the weight and type of packages used and link to your purchase data to track the exact volume consumed. Please ask your packaging supplier for information about items such as accurate packaging weight and recycled content.

Assuming that the package operation uses a predefined cardboard box size of 15, 10% of the outbound volume is an odd type or size product that requires an oversized box. Comparing the current costs with the price of installing a box-on-demand automation machine and creating a custom box size, it creates a business case for your project. This significantly reduces wasteful waveforms along with associated manufacturing, disposal, shipping costs and associated emissions.

Sustainability in Transportation

There are multiple strategies to improve sustainability when moving finished products out of warehouses or pointing to the next node in the supply chain. for example:

How much space is wasted when packing a trailer? Can you improve the cube usage to reduce shipments? Does the trailer packing procedure result in crushed or damaged items that require product replacement, and requires increased shipping and associated emissions? What percentage of shipments requires rush fulfillment, especially air freight?

Data that can support these initiatives include:

Total shipping in mode Total shipping Estimated distance Traveler Trayer Cube-used fuel consumption fuel type and engine type fuel consumption

For simple metrics like the first three, create a tracking mechanism and convert the data provided to your carrier or your own fleet into standard format. For the rest, work with your carrier and fleet (if any) to grow to track this level of detail. Providers such as the Fleet Sustainability Index can convert this data into sustainability results.

Consider a scenario where around 15% of customer orders are rush shipping due to stockouts at a nearby warehouse. In this case, supply chain managers can use these findings to show that the additional costs of increasing inventory levels can be offset by eliminating overnight air shipments and simultaneously reducing high-hot-house gas emissions associated with jet travel.

Such initiatives play a key role in helping businesses achieve their corporate sustainability goals, creating real savings that can be proven with proper measurement and tracking. These savings can also be reinvested in further sustainability projects. As always, money talks. In this case, it can also promote a company’s climate-friendly effort.