There is a rising trend towards incorporating sustainability in supply chains growth strategies, particularly as economies transition towards a post-pandemic outlook. In fact, 64% of CFOs believe that an Environmental, Social, and Governance (ESG) program can improve their company’s financial performance.
Given that many supply chains are still attempting to balance costs and services in the face of supply chain volatility, sustainability standards tend to happen on a high-level basis for now, instead of being incorporated on a daily operational level. This needn’t be the case, as supply chain cloud platforms with order, logistics, and transport management capabilities offer incredible opportunities to execute greener order flows and even calculate to reduce environmental impact per order.
Here are seven key ways that logistics and transportation management capabilities can support sustainability goals in your supply chain.
1. Converged Planning & Execution
Transportation management systems that converge planning and execution offer a wealth of opportunity for controlling environmental impact. Capabilities like smart route optimization and dynamic partner and carrier selection allow businesses to input all their requirements and constraints, and then plan and execute order flows against the lowest carbon footprint.
In the U.S., about a quarter of trucks on the road are empty. Considering that 9% of U.S. greenhouse gas emissions are owed to the movement of goods, and trucks are the greatest source of freight emissions, it’s a needless waste with devastating effects on the environment. Prebooking is another useful feature of smart order and logistics management. Some Transportation Management Systems can create service orders in anticipation of customer or shipping orders to more effectively plan transport execution by booking to capacity. As orders come in, you can start merging and matching to maximize resources and reduce empty miles.
3. GHG Planning & Monitoring
Some transportation management systems can now incorporate greenhouse gas (GHG) emissions into supply chain planning. For example, users may input parameters about an order, then optimize the product flow based on EN 16258 standards and the GLEC framework. Supply chain partners can also be scored by GHG emissions, fuel efficiency, and other non-monetary weighted values to facilitate the partner selection process. Businesses can then monitor progress to continuously improve and meet sustainability goals.
4. Supply Chain Visibility Across All Flows
A TMS offering full visibility into the end-to-end supply chain will enhance your order and logistics management. With in-transit stock visibility alongside a bird’s eye view of all flows – including inbound – businesses can take advantage of greater opportunities for order splitting and consolidation, further reducing empty miles.
5. Encourage Conscientious e-Fulfillment
Sustainability efforts go a long way in strengthening a company’s brand image and winning the loyalty and respect of conscientious customers. Empower consumers to contribute to the greater good. Today, overnight delivery is not always a priority – especially as awareness grows about the impacts of congestion, empty miles, and worker safety. Show that you hear and share these concerns. Transportation Management Systems that let you include carbon footprint considerations in vendors’ e-stores help consumers make more mindful choices between order fulfillment options, such as delivery, speed, cost, and environmental impact.
6. Support Network Partners
Organizations that are multi-enterprise business networks can even expand efforts across the ecosystem. After conducting extensive checks on their customers and suppliers, a configurable TMS helps businesses support their network partners’ local environmental initiatives. TMS dashboards that monitor KPIs and sustainability metrics, help various teams gain insight into their network’s environmental impact. Tracking and monitoring real-time analytics on CO2 emissions for all orders makes it easier to share data, support goals, and make strategic decisions for continuous improvement.
7. Returns Management that Supports the Circular Economy
With the massive returns happening these days, it’s critical to use a TMS that incorporates smart returns management. Think of it as smart order and logistics planning and execution, but in reverse. The system takes into account acceptable time windows, alternative carriers, and in-transit or cross-dock consolidation to choose the most environmentally friendly way to handle returns. Optimized flow management across suppliers, plants, warehouses, and customers further ensures that even when disruptions occur or exceptions arise, your sustainability goals are executed as effectively as possible. A TMS with returns management capabilities can also support the circular economy with repair flow management, replacement services, and controlled recycling.
Today’s pressures to be more mindful of and transparent about sourcing, manufacturing, and logistics practices can be taken as a unique opportunity for value and differentiation. A multi-modal Transportation Management System (TMS) that converges planning and execution and incorporates returns and omni-channel fulfillment is an extraordinarily effective resource for lowering a company’s carbon footprint. Moreover, the automation and optimization capabilities that drive a greener supply chain are also responsible for making substantive efficiency gains, improving service, and boosting revenues.
Martin Verwijmeren is Co-Founder and CEO of MPO.