The concept of sustainability has become a key topic of discussion in the media and business world, having embedded itself firmly into the minds and strategies of corporations worldwide.
Sustainability in supply chain logistics can be understood as exploring how various components of a logistics network can be optimised in terms of business risk reduction, environmental considerations, and cost reduction.
As businesses are under pressure to prioritise sustainability – both to address environmental concerns and also realise economic benefits as a result – Phil Pearson, Sales Management Director at Jungheinrich explores what steps can they take to achieve both these goals.
Three Pillar Approach
Permanent and reliable business partners that share common values are critical to a successful sustainable journey. To begin, three elements to consider when it comes to business sustainability within supply chains are social, economical and environmental. However, in the warehouse, businesses should start with addressing the economical and environmental factors as a priority.
As government pressure on companies to reduce their carbon footprints, electrical and water usage, and general environmental impact is higher than ever before, the environmental pillar often gets the most attention. For instance, the elimination of the Red Diesel business entitlement in 2022 will require many businesses to overhaul their diesel equipment and consider more energy-efficient power alternatives.
Although this may appear to be a logistical nightmare, companies that invest in their environmental CSR efforts often find they can also unlock significant financial benefits. In the case of lithium-ion batteries used in materials handling equipment, businesses have found that sustainable outcomes can also yield productivity and efficiency benefits, such as charging vehicles at the right time and supporting 24×7 operations – ultimately increasing profits and, thus, ensuring business continuity.
Economic pillars provide a counterweight to the high-risk measures corporate leaders are typically pushed into, such as dropping fossil fuels rather than phasing in changes gradually. With tough competition in today’s industry and turbulent economic environment, factories need to adjust their strategies so that they can produce as many products as possible at a minimal cost. The goal is to make the production process more efficient, productive and ultimately – sustainable. So how should businesses improve their environmental credentials while also improving their bottom line?
Pre-pandemic, the concept of innovating to survive was for some businesses not a core focus. The COVID-19 pandemic and the shutdown of the global economy that followed in 2020, however, have accelerated the need for seamless operations, while preparing companies for any potential disruption in the future.
COVID-19, however, was found to have uncovered gaps and inefficiencies in warehouse and supply chain automation strategies because of its impact on the warehouse and supply chain industries. Yet, these hurdles have prompted warehouse managers to adopt and implement automation technology, allowing them to shift and adapt to peaks in demand and improve productivity.
In some repetitive warehouse tasks, such as picking, packing, and transporting goods, robotic warehouses can augment human workers, but they cannot replace them in more complex jobs, such as repair and analysis. During a crisis such as the current pandemic, such a strategy can not only provide ROI but also the continuity to meet long-term business objectives.
Pre-pandemic, automation was viewed as a luxury; now it’s a necessity. Warehouse managers cannot afford to let productivity slip in the booming e-commerce intralogistics market. Automating processes will make operations leaner, greener and more efficient while also contributing to sustainability.
Globalisation poses several challenges for companies, such as heightened global competition, an increase in consumer demands and expectations, and an increase in environmental regulations.
By considering these challenges and incorporating environmental, social, and economic views into their strategy planning and execution, companies have been seeking environmentally friendly and energy-efficient solutions to overcome challenges and maximise their business landscapes across the board.