Green supply chain and digitization: how technology makes logistics sustainable
The pandemic is not just a simple health crisis. It is a devastating economic disruption that has caused dramatic professional turmoil around the world. When it comes to supply chains, we have witnessed their exposure to vulnerability and inadequate contingency planning. Due to the growing importance of the ethical aspect during Covid, companies find it crucial to switch to responsible consumption. By putting corporate social responsibility at the forefront, companies don’t expect a quick payoff. On the contrary, it is a long-term strategy that provides a competitive advantage for years to come.
Sustainable supply chains have achieved the triple bottom line. The strategy encompasses economic, social and environmental dimensions. According to the Green Growth report, companies with a strong CSR (corporate social responsibility) posture tend to be resilient in the face of current challenges. The commitment to responsible conduct requires maximum transparency, unrestricted communication and excellent risk management. Integrating this mindset into supply chains is the path to greater social value in the context of public procurement.
Logistics organizations are increasingly embarking on digitalization as the driving force behind green supply chains. The adoption of ML, AI, big data analytics, IoT, cloud and beyond is creating a new business paradigm where technologies create smart, efficient and sustainable logistics. Let’s see how they do it exactly.
Sustainability in the language of technology
It would be appropriate to discuss the specific technologies and solutions they provide.
Big data and AI. The application of algorithms promotes synergistic collaboration, a crucial factor in the efficiency of the supply chain. When the supply chain is smart and collaborative, it means that a company can share transportation methods with its partners. For example, a specialized algorithm powered by Vlerick is a tool for sharing shipping details and finding a relevant shipping provider. The technology uses GPS data to record detailed information from transport companies. In this way, a business can speed up logistics, improve profitability, reduce waste levels and thus become green.
Driverless vehicles are the most popular application of artificial intelligence in the context of logistics. First, a business can strengthen their route planning by finding more beneficial routes. This automation eliminates the human factor and brings more precision. In the years to come, we will see an increasing number of autonomous zero emission boats.
Another area where AI algorithms work well is planning for delivery urgency. More precisely, they help to increase the efficiency of maritime transport by defining its real necessity. The algorithms analyze the environment, then generate routes that align fuel and emergency. In addition, artificial intelligence easily adapts to changes in delivery priorities. When done manually, this type of calculation can be time consuming and cause delays. AI dramatically speeds up complex decision-making. Using deep reinforcement learning, an organization calculates the exact number of goods, the exact time of shipment, and the most relevant type of vehicle. The fact that the system operates in real time helps mitigate risks and quickly adapt to fluctuations. By performing constant supply chain analysis, smart solutions recommend improvements and green entrepreneurs and partners.
Internet of things. According to data from the information age, industrial interconnection improves the environmental posture of more than 67% of companies. The IoT works wonders in terms of energy efficiency, waste reduction and infrastructure management. Above all, IoT solutions allow rational planning of routes and reduce fuel consumption. Second, a business can track the condition of the goods during transportation. If damage occurs or if an item is approaching its expiration date, it is replaced in a timely manner. And thirdly, managing civic infrastructure through IoT solutions makes it environmentally friendly – sensors, LEDs, streetlights accumulating data in a set pave the way for green lighting.
Many global leaders have successfully integrated IoT technologies into their businesses or intend to do so in the near future. For example, Pirelli uses sensors for warehousing and manufacturing, thereby reducing the number of toxic emissions. Or take FedEx: the company has a plan to switch to an alternative fuel by 2030. Big companies are realizing that digital is creating new opportunities and has benefited from a business perspective. I suggest you watch them.
Digital logistics means green logistics
Internet of things, mobile, blockchain, cloud – integrating these technologies into supply chain design improves key areas of the industry. Since synergy and optimal synchronization are the pillars of efficient work, intelligent management, planning and control are essential today and in the future. From an operational standpoint, a business gains real-time visibility across the chain, advanced optimization, valuable insights, enhanced horizontal and vertical collaboration through user-friendly user interfaces. In addition to being able to react immediately, an organization becomes proactive, foresees various scenarios and makes better decisions at every step.
From a business perspective, digitization in the name of a healthy environment and society has many advantages. Obviously, to be competitive, a company must be open to innovations, absorb the latest trends and best practices. However, in times of turbulence and uncertainty, responsible businesses convey social value, which is like a beacon for customers around the world.
A sustainable supply chain strengthens a brand’s reputation. Corporate social responsibility goes far beyond waste, emissions and recycling. It encompasses green manufacturing, ethical conduct at many levels, gender equality in leadership positions, diversity in the workplace and much more. These are the building blocks of an impeccable reputation and worldwide recognition.
From a financial point of view, green initiatives can increase a company’s profits and generate new sources of income. Once an organization joins the green movement, it is empowered to lead by example and the tools for sustainable supply chains. Additionally, an organization can earn more money by selling its own waste. Therefore, there is a chance to make money and provide raw materials for some companies.
In summary: food for thought
Decisions in logistics require new and agile approaches, be it in modes of transport, storage, handling of various materials, labeling, packaging, etc. Virtual dimensions have proven to be very effective in meeting challenges and demands. The right time and place for the sourcing activity should not compromise good quality. Investing in digital solutions doesn’t just mean investing in innovation, you are investing in unparalleled experiences and great-value service.
Supply chain resilience is imperative for businesses. There is no room for uncertainty for responsible businesses: you integrate the technology needed to operate, collect and leverage the data, and turn it into solutions for the common good. This is the only way things will work for the foreseeable future.