Four transformations to build sustainable post-Covid supply chains
Global trends in adopting greener business practices are pushing environmentally responsible solutions in logistics.
The Indian logistics sector emerged as one of the strongest support systems for the economy ravaged by a global pandemic. The rise can be attributed to several factors, including appropriate policy amendments and infrastructure support by the government for improving transport and storage facilities, with a focus on reducing logistic costs. In addition to this, the sector has also been driven largely by fast-paced tech adoption, the meteoric rise of e-commerce led last-mile deliveries, a more robust food and pharma supply chain and AI-driven operations.
In addition to tech adoption, global trends in adopting greener business practices are also pushing for the adoption of environmentally responsible solutions in the logistics and supply chain. This would mean that the next wave of disruption for Indian logistics is set by the evolution of 'sustainable' supply chains which are not only environmentally conscious but also efficient in terms of cost, time, fuel and productivity. Listed here are four key points of transformation that will help build sustainable supply chains for India:
1. Tech adoption
Needless to say, smart tech innovations are helping optimise processes across supply chain networks and are driving cost efficiencies as well. Leveraging smart solutions to optimise freight schedules, or using AI and predictive analysis for route optimisation, consolidation of shipment etc. can make s huge difference in fuel optimisation and thus help cut the overall carbon footprint.
2. Optimised storage capacity
Traditional warehouses are massive and absorb a lot of heat, demanding extra energy to keep them cool. Further, they are often located at far off places and take up additional transport and distribution efforts, which in turn adds to the carbon footprint of the Supply Chain. Adopting alternative energy sources like solar panels for lighting or energy-efficient lighting sources, recycling water and installation of automated systems that check energy utilization, can all go a long way in transforming modern storage. Warehouses with specialised temperature-controlled supply chains.
3. Agile solutions
If anything, the pandemic has been a lesson in building business agility and the need to always have contingency plans. With logistics and supply chains, this means leveraging technology and on-ground networks for creating solutions that are more responsive, competent, flexible, and easy to manage, on a daily basis. Unlike the conventional supply chain structure, the agile supply chains leverage real-time data and updated information, to optimise operations and make accurate demand forecasts. This also helps in better inventory management to meet the volatile demands of a changing economic market, and the growing customization of goods.
4. Greener transportation
As one of the major contributors to environmental degradation, the transport sector alone contributes to about a quarter of global CO2 emissions. Transportation also contributes to 30 percent of particulate matter in the air in metros, leading to air pollution, noise pollution, and degradation of green cover. Adoption of Green Transportation helps the replacement of fossil fuel-based technology with bio-fuel based or with alternatives like CNG, hybrid, battery-operated vehicles, equipment, etc. Additionally, taking into account details like fuel efficiency, payload management, routing, and driving techniques can go a long way in making 'green transportation' more cost-effective and sustainable. Consolidation of shipment and preference to railways or waterways as a preferred mode for transportation can also make a considerable impact on the environment while also saving cost and time.
In order for these transformational efforts to be successful and for sustainable supply chains to become a normal industry process, it is vital that these solutions can help benefit revenue generation and business growth opportunities for the logistic service provider while helping businesses to align their green practices and SDG's with their vendors. In an era of accelerated innovation and fast-paced global business expansion, sustainability is a non-negotiable criterion, like technology, which sooner or later needs to become a normal way of business.