Global warming may be "an inconvenient truth" for many businesses. But finding ways to combat it might be one of the best things that have happened to supply chain budgets in years.
Although the need to go green has added yet another layer of complexity to logistics professionals' already complicated jobs, it turns out that becoming more sustainable often goes hand in hand with becoming more efficient. It may even accelerate the process.
As evidence, consider these eight supply chain decision scenarios. Each one clearly has a more environmentally friendly response that's just as compatible with better bottom lines.
Which Mode Should We Use?
Given aviation's phenomenal speed, it should come as no surprise that air has a significantly larger carbon footprint than other transportation modes. But it might surprise you to know just how much larger.
Recently, APL Logistics' company engineers conducted an analysis that compared the carbon footprint of air and ocean shipments from Hong Kong to the U.S. Midwest. Even when the use of trucks for the land leg of the ocean-based move was factored in, the ocean load turned out to have a 96 percent smaller carbon footprint.
And those results aren't unusual; overall water is a considerably greener transportation option. It's also eight to ten times less expensive.
By the same token, trains tend to be less expensive and more sustainable than trucks.
Who's Coordinating Our Overseas Inbound Shipping?
When manufacturing internationally, it's easy to assume that your local or regional suppliers should oversee their shipments to your production facility because they know more about their area's infrastructure and transportation providers than you do.
But there are a couple of good reasons why it might be more efficient and environmentally friendly to coordinate these shipments yourself or to have an international 3PL do it for you. First, it's highly likely that your company or 3PL has access to better routing and other freight management tools-all of which contribute to more effective (and ultimately, greener) transportation practices. Second, it may turn out that the locations of these suppliers, when properly analyzed, could lend themselves to a fuel-efficient, milk run pickup system that minimizes both the total miles and empty miles expended.
Is There A Way To Consolidate Our International Shipments?
Sourcing from multiple countries can offer many financial advantages. But it can be tough on your logistics pocketbook and carbon footprint, because it results in more fragmented supply chains and less-than-streamlined international shipments.
One green and fiscally sound solution is to use multi-country consolidation, the act of bringing goods from various international venues into a single overseas location and then combining them into better-optimized global loads.
You can set up such a consolidation center yourself in a location such as Singapore. Or you can check with some of the industry's leading 3PLs, many of whom already have such locations up and running.
Are We Using the Right Ocean Container Size for Our Company?
Ocean container shipping companies clearly understand that one size doesn't fit all, because today companies can choose from a range of container dimensions.
As your company weighs the pros and cons of each, bear in mind that all of these sizes are not equally sustainable or cost-effective.
For example, if your company chooses 40-foot containers for all of its ocean shipments, you'll be using close to 33 percent more containers than you would if you used 53-foot containers, because it's generally possible to fit the contents of three 40-footers into two 53-footers. More containers equate to more transportation space, which adds up to more moves, higher energy consumption, greater expense and a larger carbon footprint.
All in all, bigger is usually going to be better when it comes to sustainability and cost-efficiency-unless it impacts your cube utilization, which is a significant consideration in and of itself.
How's Our Cube Utilization?
Cube utilization isn't just about maximizing space. It's about minimizing waste, especially in international supply chains.
Among other things, the contents of properly cubed containers are less likely to shift and get damaged in transit, which reduces the need for the extra packaging many Asia-to-U.S. shippers use to ensure their shipments arrive intact. Less packaging means less waste - and the need for less container space, which results in the need to use fewer containers, consume less energy and spend fewer dollars.
How Much Redundant Transportation Do We Employ?
If your company routinely brings goods into a port on either coast where you also have a significant customer base, it doesn't make sense to transport them to a DC that's hundreds of miles inland only to bring them back to the area again days or weeks later-especially not when you consider that transporting a 40-foot container from L.A. to the Midwest consumes nearly 12,000 kilowatts and produces 3,271 kilograms of carbon dioxide emissions per 40-foot container. (And yet many companies routinely engage in this practice.)
Instead, you'd be smart to keep some of those goods at a distribution center near the port of entry and distribute them from there, thus eliminating redundant transits. While you're at it, you may want to set the DC up as a cross-dock/deconsolidation center so you can take care of efficiency-building (and environmentally friendly) techniques such as inventory and allocation postponement.
On a related note, take a close look at the ways your company might be unintentionally duplicating transportation efforts. If you have multiple divisions or several departments with purchasing power, the chances are good that there are more than a few extra inbound or outbound shipments that could be combined and optimized into something more efficient.
Are We Certain We're Using the Right-and Right Kind-of DCs?
Whether they're overseas consolidation centers, domestic cross-docks or standard distribution centers, your company's warehouses have the potential to dramatically compound or confound your company's environmental and economic supply chain improvement efforts.
Naturally, much of their impact is tied to location. If your company has optimized its DC network as often and as thoroughly as it should have, your locations should enable your trucking fleet or TL/LTL providers to consume the least amount of fuel for the highest amount of productivity-a gain for both your green efforts and your bottom line.
But don't underestimate the power of more thoughtful construction either. Lighter-colored roofing materials and paving materials can go a long way toward reducing your DCs' heat island effect. Modern fluorescent lighting technologies could reduce your electricity consumption by as much as 70 percent. Motion sensors could help you better match your facility's lighting, heating and cooling needs to those times when people are working in certain areas of the facility. And strategically placed skylights and windows will enable you to maximize use of the cheapest and most environmentally friendly lighting system in the world-the sun.
Plus some landscaping and irrigation systems are clearly more sustainable than others. Ask about how you can retain and employ rainwater to irrigate the greenery around your entrance-because excessive water consumption is also an environmental concern as well as an added business expense. Better yet, consider using drought-resistant plants.
How Efficiently Are We Running Our DCs?
Finally, don't forget about the impact of strategic warehouse design and throughput. Our industry logs a lot of forklift miles each year, and the way your company lays out its facilities can go a long way toward reducing the carbon footprint these vehicles leave-as well as the costly man hours required to run them.
The same applies to your yard operations and delivery scheduling. If trucks have to idle outside your facility because there's no dock door available, they're not only wasting time, they're also wasting fuel-and leaving more of a carbon footprint than they need to. Rethink your delivery schedule, and everybody wins.
The Bottom Line
Obviously these are not the only questions you or your supply chain engineers should be asking as your company strives for leaner and greener supply chains.
From the landed cost and environmental implications of manufacturing overseas to the merits of traveling one route vs. another, there is no issue or process that should be exempt from scrutiny-because all of them contribute to both your expense and carbon footprint.
Finding the answers may not always be quick or convenient, because sometimes the best solutions will only emerge after you've run several simulations or done a thorough optimization. However, in the grand scheme of things, it will always be worthwhile.
Rajiv Saxena is vice president, Global Supply Chain Engineering, of APL Logistics. Visit www.apllogistics.com
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