Companies can improve their sustainability efforts amid growing concerns about the colossal carbon footprint of the global supply chain by introducing automation technologies into core processes. Here’s how.
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Sustainability in the supply chain involves increasing business efficiency and overcoming modern challenges with careful consideration of potential environmental impacts. It is about mapping the entire ecosystem and embedding eco-conscious practices to minimize the carbon footprint of a business’ operations.
Earth.Org takes a look at the major ways automation can transform how businesses manage the flow of goods, data, and finances while reducing environmental harm.
The Role of Automation in Supply Chain Sustainability
Supply chain automation entails deploying technology solutions to streamline and automate core business processes, including inventory management, order processing, and logistics.
Examples of these automation solutions include artificial intelligence (AI) and machine learning, Internet of Things (IoT) sensors, blockchain, and robots. Together, these technologies can facilitate improved sustainability across the supply chain.
1. Carbon-Neutral Transportation
Experts predict there will be 36% more delivery vehicles globally by 2030, which will generate an additional 6 million metric tons of carbon dioxide (CO2) emissions. Automation through electric self-driving trucks can save over 63% of the carbon emissions of a comparable diesel vehicle. Admittedly, autonomous cars are not mainstream yet, but you could see them in California this year.
In the meantime, drones and delivery robots might be a more practical option. Research shows that adopting these in an existing supply chain can lead to over 90% reduction in energy consumption per package compared to other vehicles.
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2. Route Optimization
The longer delivery vehicles are on the road, air, or water, the more greenhouse gasses are emitted. Deploying AI to optimize routes for quicker, more efficient deliveries can significantly reduce emissions.
For instance, IBM’s Supply Chain Insights platform analyzes real-time traffic, weather, and other variables to optimize shipping routes while considering cost and sustainability impact. American retail giant Walmart also uses AI in its supply chain to automate inventory management across 4,700 facilities for more efficient shipping to warehouses, stores, and customers.
3. Waste Reduction
Roughly $163 billion worth of inventory is discarded every year globally due to oversupply or damage. This can lead to air pollution as well as water and soil contamination, with serious repercussions on the environment.
Integrating IoT sensors can revolutionize waste management in supply chains by delivering real-time insights throughout the process. For example, interconnected devices and analytics in delivery vehicles can monitor the condition of perishable goods based on a predefined scale. If the shipment is delayed and products hit a set limit, the sensors alert suppliers so they can reroute the package to a nearer sorting facility. This reduces waste and saves costs across the supply chain.
4. Dynamic Production
Demand tends to fluctuate for most consumer goods, so it makes sense to slow production and ramp up at certain periods. Machine learning can use vast historical data to design dynamic production lines based on demand fluctuations.
Manufacturers are also installing AI-enabled IoT devices in machinery and equipment to predict potential disruptions in production. PepsiCo recently analyzed over 300 million machine hours to create algorithms that can identify malfunction patterns and deploy preventive measures. This improves efficiency in the value chain, saving valuable time and repair costs.
5. Energy-Saving Integrations
Across the supply chain, energy production and consumption directly lead to environmental issues, including air pollution, water contamination, and waste disposal.
Companies can enhance energy management through automation. AI-powered smart sensors monitor and control power usage, creating more efficient equipment scheduling. The data from these sensors can also be used to identify and address inefficiencies, ensuring optimal performance.
6. Process Automation
Manual errors in supply chain processes can be costly to the environment. For example, if an online store delivered the wrong product due to a clerical error, shipping the correct item could mean increased energy consumption and carbon emissions. Automation makes such errors less likely to occur in the first place.
Automating workflows can reduce costs by up to 90% while providing more accurate data for strategic decision-making. They also enable teams to move away from mundane tasks to higher-level projects.
7. Material Handling
People order products that contain hazardous materials all the time. Mobile phones, camping equipment, essential oils, and even nail polish contain potentially toxic substances. Improper handling, hauling, or storage of these items poses significant ecological risks, including widespread fire damage and soil pollution.
IoT systems can improve material handling safety. For example, AI-equipped sensors can monitor hazardous goods for potential issues during transport or storage and implement automated safety procedures.
Why Are Sustainable Supply Chains Important?
Automated sustainability measures are more imperative than ever, especially considering that 90% of a company’s carbon emissions come from its supply chain. This encompasses manufacturing, logistics, and waste management systems.
Additionally, more consumers are becoming conscious of their shopping habits and environmental consequences. Statistics reveal that 85% of buyers have become greener in their purchases in the last five years, with one-third willing to pay more for eco-friendly products.
Ultimately, this means businesses must join the sustainability movement or risk being on the receiving end of changing consumer preferences. Adopting sustainable supply chains can lead to improved customer acquisition, increased profit potential, and a stronger company reputation.
What Can People Do to Enhance Supply Chain Sustainability?
Consumers also play an essential role in enforcing environment-conscious supply chains. For instance, whenever someone buys local, sustainably sourced products, they reduce environmental impact by up to 26% less automobile miles.
Educating yourself about supply chain sustainability and having conversations on the subject helps keep it at the forefront of buying decisions. It also equips shoppers with the most recent best practices on related issues, such as ethical sourcing and natural resource conservation.
People can also promote collaboration between sustainable supply chains. If they know business owners who can benefit from partnering with similar-minded organizations in the network, they can facilitate the connection. Strategic partnerships for improving eco-consciousness in business are always great for the environment.
An ESG-focused transformation is heading to the manufacturing, warehousing, and distribution sectors. Businesses must look into automation solutions that bolster their sustainability efforts, maintain competitive advantage, allow them scale their operations quickly, and expand into new markets.
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