Sustainable logistics

Save materials and fuel – for your business and the planet

Reducing waste may not always be easy but it’s both environmentally and economically rewarding, as Gian Schiava explains.

Managing the flow of goods within a supply chain is already a hell of a job to do well. Inbound movements demand close co-operation with suppliers, so everything arrives at your facilities exactly when it’s needed. Then intralogistics activities start to change the shape of the goods, requiring careful hands-on management. After storing and repackaging, orders are picked to fulfil demand. Warehouse managers prepare shipments and the outbound flow commences. As margins can be thin, efficiency and productivity are difficult daily challenges for the supply chain manager.

Today, however, he or she has yet another key challenge to take into account. We are now more than aware that we cannot keep polluting this world and wasting its natural resources in the way we have done before, and we must take measures to leave our children a better future. Within logistics flows we use all kinds of packaging materials, including board, paper, shrink wrap and bubble wrap. What’s more, with the increase of e-commerce transactions, we have created another powerful stream: the one for returned goods. Dealing with this involves further handling and repackaging, along with extra fuel consumption that feels somehow avoidable.

Although supply chain managers certainly cannot solve all our planet’s problems, there are two directions in which a company can significantly reduce its environmental impacts.

Improving energy and fuel efficiency, to cut carbon emissions, is our ultimate challenge.

Inwards: managing in-house waste

In fact, here we can turn a disadvantage into an advantage. We should now view waste as a source of raw materials from which new resources can be created. This is often referred to as the circular production cycle. Companies need to know how to separate their waste flows and design efficient in-house waste logistics systems to make the most of them. Dutch company KTK has been working in waste logistics for almost 30 years and offers potential customers some sound advice on improvement.

Its first recommendation is to set up a waste logistics system well in advance. When designing a new warehouse, we tend to focus on the primary flow of goods. However, we then overlook the waste flows. In large distribution centres, particularly, waste production can amount to several hundred cubic metres per day. Such large flows cannot be efficiently processed if they are not taken into account in

the initial warehouse planning. Selecting waste locations and ways of separating the flows is just as important as choosing the right forklifts.

Other suggestions include: designing your set-up as a total concept (don’t ‘shop’ for cheap partial solutions); considering the various compacting techniques available (to reduce volume); and making sure you prevent waste from hindering your primary process. Waste can soon become an obstacle for lift trucks and order picking staff.

Another important message is to not forget the external logistics. More on that later.

A good practical example of KTK’s approach has been implemented at a number of warehouses in the Albert Heijn chain – part of one of the world’s largest food retail businesses. Building and improving upon the existing waste flow facilities, it centres on a vandal-proof solution, adapted to the buildings, and suited to the large amounts of residual waste, cardboard and foils involved. After careful joint analysis, Albert Heijn decided to purchase a large number of waste crushing installations and develop a detailed plan for servicing and collection.

Outwards: reducing consumptionin the supply chain

Sustainability within the whole supply chain is another ball game altogether. We need to look beyond reducing and recycling packaging materials, as there are other important areas that need our attention.

Improving energy and fuel efficiency, to cut carbon emissions, is our ultimate challenge. Pressure from shareholders and customers is strong here, as this is such a well-known environmental issue. Cutting costs through more energy-efficient transport is another great incentive. Return on investment can be especially good when switching from highly polluting fossil energy sources to greener hybrid or electric alternatives.

Large logistics companies, in particular, are ready to plunge into green transport. UPS, for example, is gradually replacing its fleet with vehicles which run on alternative fuel or use advanced technology – such as hybrid power sources – that improve energy efficiency. One target for the company is that 40% of all ground fuel should be from sources other than conventional gasoline and diesel by 2025 (an increase from 19.6% in 2016).

Excessive fuel consumption may also be the result of poor planning. Adding extra kilometres through an inefficient schedule or route is not environmentally friendly. Empty trailers on return routes are also wasting fuel. A modern transport management system (TMS) can help to optimise things like loading capacity, filling rates, staffing of the cargo space, and ensuring timely loading and unloading operations.

The list of opportunities goes on and on. Unnecessarily high amounts of stock can lead to many unnecessary movements. Poor routing systems or order picking plans can lead to preventable increases in miles driven. Conventional packaging machines, sending out packages which are partly empty, or stuffed with loads of filling material, contribute further to the waste.

Good alternatives already exist, but adopting them requires research and dedication. To speed up progress in the field of sustainable logistics, one of the new roles emerging is that of the waste logistics manager. Sustainability-focused professionals are urgently needed – first for the planet and second for your business. After all, the potential for savings in this area is mind-blowing