Greening the supply chain
Waste is the cancer in our supply chain, said Abrie de Swardt, marketing director of Imperial Logistics, at the SAPICS Cape Town regional conference, held last week at the Spier Wine Estate.
According to De Swardt, until very recently, freight transportation was a negligible consideration in the company's strategy with regards to environmental responsibility.
“However, current business practices such as international sourcing and quick turnaround times challenge this by extending transportation distances and minimising lead times in the supply chain. Standard modes of transportation consume fossil fuels, generate noise and emit toxic compounds.”
De Swardt said the objective of his presentation was “to provide attendees the opportunity to gain practical insights into what best-in-class companies are doing to reduce carbon emissions and reduce costs at the same time, thereby significantly optimising their supply chains”.
Admitting there is a problem is the first step towards any form of recovery, De Swardt noted. Volatile energy costs substantially drain company resources and new government regulations will require companies to cut energy use or pay penalties.
He added that pressure from customers, shareholders and advocacy groups continues to mount for companies to cut energy usage and reduce their carbon emissions.
De Swardt continued: “There is still widespread uncertainty as to how to move forward with green supply chain initiatives.”
His company feels strongly that doing nothing is not an option. Transforming to a green supply chain requires three steps: becoming educated, measuring the company's carbon footprint and identifying change levers, and embarking on business case-supported initiatives.
He noted: “Green initiatives should clear three hurdles in that they must be acceptable financially, environmentally and socially.”
De Swardt indicated Imperial Logistics has implemented various best-practice processes, by redesigning products with service providers to reduce energy consumption and waste throughout their product life cycle.
In addition, the company decided to shift to green suppliers, shorten travel distances and redesign distribution networks and the routes travelled. It also altered service level agreements by adding carbon to the traditional measurements of cost, quality and service, and it consolidated shipments and leveraged its rail solutions as far as possible.
Imperial Logistics also provides ongoing driver training initiatives and leveraging partnerships with experts and like-minded organisations.
Full steam ahead
De Swardt discussed a South African case study that involved Imperial Logistics in conjunction with transport service provider, Fast 'n Fresh; the findings and implementation of which were recognised with a 2009 LAA Enviro Award.
The study examined, among others, the network transportation model utilised, the elimination of “dead” kilometres, and other initiatives to reduce fuel consumption and limit waste.
As a direct consequence of this study, Fast 'n Fresh has embarked on a “green journey” in conjunction with its major client, Woolworths. It is now continuously exploring different ways of demonstrating its commitment to becoming an environmentally sustainable transportation company.
It ensures all fuel consumed contains 5% biodiesel, and that a large portion of the distribution fleet is powered by technically advanced Euro 3 engines, or even later ones, to ensure minimum emission standards are achieved.
De Swardt added that the company uses borehole water and bio-degradable detergents to wash vehicles, and ensures the used tyres and oils are disposed of in a responsible manner, using reputable agencies like Oilkol.
De Swardt's final message was: “Don't wait for someone else to do it; start today to address the waste in your supply chain, as it adds costs and impacts negatively on the environment.”
The US Department of Energy's Annual Energy Review reports that industrial and transportation sectors, ie those that coincide with supply chain activities, account for 61% of US carbon emissions.
According to the fifth annual State of Logistics survey, up to 75% of most local companies' carbon footprint comes from transportation and logistics networks, indicating a careful examination of energy use throughout the supply chain provides major opportunities for improvement.