18 Must-Have Negotiation Skills For Procurement Professionals
Sustainable Logistics — The Ultimate Guide
Sustainable logistics is aimed by many organizations as it can achieve their corporate social responsibility and enhance their overall process. However, how can logistics achieve sustainability?
In this article, we will discuss what sustainable logistics is. We will tackle the steps to implement a sustainable logistics model. Additionally, we will also talk about some tips to navigate sustainable logistics.
Once you are done reading this article, you will know why it is important to achieve sustainable logistics. You will also learn ways to achieve sustainability in logistics. Thus, allowing you to move your products faster while also ensuring to adhere to your social and environmental responsibility.
What is Sustainabilityin Logistics?
Sustainable logistics, also known as green logistics, refers to the processes and practices aimed at improving the sustainability of supply chain activities. These activities range from the supply of raw materials to the distribution and the management of the lifecycle of products.
The concept of sustainable logistics is not just limited to the lowering of environmental footprint. It also involves the economic and social responsibility of the logistics activities of companies.
Commitments to achieving sustainable logistics offer benefits such as a good company reputation, cost savings, environmental responsibility, supply chain efficiency, and the ability to create new partnerships.
Sustainability in logistics is becoming more relevant in the transition from a linear economic model to a circular model of industrial economy which aims to improve the quality of raw materials and final products.
Furthermore, logistics suppliers must look for a balance between environmental care, financial growth, and the health of society to achieve sustainable logistics.
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Practices to Increase Sustainability in Logistics Operation
1. Harness Data
Making data the heart of supply chain operations allows businesses to work more effectively and efficiently.
Improving freight collaboration and goods tracking with open logistics ecosystems connect businesses to management logistics by monitoring the transport methods in real-time.
Additionally, businesses can remove the risk of empty mileage by loading transport vehicles to optimum capacity which is both profit and environmentally friendly.
2. Utilize pop-up warehouses
The last mile delivery emissions linked with e-commerce are continuously increasing and logistics providers are under pressure to find ways to decrease their carbon footprint.
Setting up a pop-up warehouse brings businesses closer to customers which is an excellent way to reduce last-mile emissions. Pop-up warehouses reduce the delivery time and cost as well as give more flexibility to lessen the supply chain disruptions.
Additionally, you can use a warehouse for storing inventory close to demand and combine on-site retail and pick-up points to cut down costs greatly. This is a great way for businesses to optimize the supply chain while helping the environment as the cost of renting a small warehouse is less than the shipping costs.
3. Use alternative means of transportation or fuel technologies
When you go out of a building, it is most likely that the trucks you are seeing use diesel as a fuel source since it is the most affordable option. However, it increases the carbon footprint by exhausting 13% more CO2.
Using lower carbon fuels such as biofuel instead of fossil fuels and replacing old trucks with eco-friendly vehicles would be the measures taken toward social and ecological sustainability.
Today, there is a wide range of eco-friendly solutions in the market which challenge the traditional ways.
The emissions associated with the distribution facilities can be eliminated through clean energy-powered electricity, solar systems, and water recycling systems.
Many farming companies are also changing the traditional way of farming. Its transformation has led them to use 85% less water and can grow 18 cycles a year instead of having 7 cycles a year.
4. Enhance on-site resources and planning
Do you ever wonder how huge containers are carried and transported between rail, ship, and truck? This is where yard logistics comes into mind.
Yard logistics is the part of the supply chain which businesses can use to strengthen the bridge between warehouse and transportation management.
You can avoid long breaks or processing gaps in between the logistics operations by efficiently planning the steps and activities in the yard. Additionally, it also results in eliminating waste, transport, labor cost, and carbon emissions.
Steps to Implement a Sustainable Logistics Model
1. Stakeholders engagement
Engaging with stakeholders allows you to identify relevant areas within your company that can generate positive and negative outcomes.
This is a systematic approach of engagement and dialogue which is crucial to plan the policies and strategies of a company correctly.
2. Measurement of performance indicators
In order to get closer to a more sustainable logistics model, it is significant to measure its current state. The process begins with knowing the key parameters, from the consumption of resources to the calculation of the carbon footprint of the final products.
The second step is to examine the impact of different processes involved in your supply, production, and distribution cycles. Once you fully understand the relevance of different operations, you can effectively identify your objectives and priorities.
3. Defining goals
After the preliminary analysis, the company can start looking at its desired outcome. Each goal is associated with a different degree of complexity which is intended as the effort needed to attain the expected results
Also, it is possible to identify numerous levels of urgency relating to corporate strategy, stakeholders’ expectations, and competitors’ activities.
4. Knowing you priorities
The evaluation of the three dimensions, which are impact, complexity, and urgency, enables decision-makers to know their priority objectives.
This, in turn, will allow them to plan the initiatives and interventions that can be added to the action plan.
5. Action plan
The action plan is the blueprint of actions to achieve the expected results of your organization.
An effective action plan features measurable and detailed objectives. It provides a timeline and opportunities to measure progress, organizational responsibilities, and performance indicators.
This allows the project managers to analyze the outcome of the different implemented activities.
6. Evaluation of the result
The final step of the cycle allows the company to appreciate its achievement, communicate the results to its stakeholder, evaluate possible shortcomings, and plan corrective measures.
Once the cycle is finished, the company can repeat the process to move towards more ambitious and complex goals.
+ What is sustainability in logistics?
Sustainable logistics refers to the processes that emphasize sustainability and a reduced environmental footprint when it comes to freight, logistics, and supply chain practices.
+ What does sustainability in logistics aim for?
Sustainable logistics aim to limit the environmental footprint while also considering the economic and social responsibilities of companies.
+ What is the significance of sustainability in logistics?
Sustainable logistics gives companies useful features to implement in their supply chain to reduce their carbon emissions and their costs.
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