Green Supply Chain and Digitalization: How Tech Makes Logistics Sustainable

The pandemic is not just a mere health crisis. It is a devastating economic disruption and has caused dramatic labor turmoil on a global scale. As far as the supply chains are concerned, we have witnessed their exposure to vulnerability and inadequate contingency plans. Due to the growing saliency of ethical aspect during Covid, companies find it crucial to shift to responsible consumption. Putting corporate social responsibility at the forefront, businesses do not expect a rapid reward. On the contrary, it is a long-term strategy that provides a competitive advantage for the years ahead.

Sustainable supply chains hit the triple bottom line. The strategy encompasses economic, social, and environmental dimensions. As per the Green Growth report, the companies with a strong CSR (corporate social responsibility) posture tend to show resilience in the face of the current challenges. Commitment to responsible conduct demands utmost transparency, unrestricted communication, and superb risk management. Having this mindset embedded in the supply chains is the path to a greater social value in the context of public procurement.

Logistics organizations increasingly embark on digitalization as the locomotive for green supply chains. Adopting ML, AI, big data analytics, IoT, cloud, and beyond creates a new business paradigm where technologies build smart, effective and sustainable logistics. Let’s see how exactly they do it.

Sustainability in the language of tech

It would be appropriate to discuss specific technologies and solutions they provide.

Big data and AI. The application of algorithms fosters synergetic collaboration, which is a crucial factor in logistics chain effectiveness. When the supply chain is intelligent and collaborative, it means that a company can share transportation methods with its partners. For instance, a specialized algorithm powered by Vlerick, is a tool for sharing shipping details and finding a relevant transporting provider. The technology uses GPS data to record detailed shipping firms’ information. In this way, a company can expedite logistics, drive cost-effectiveness, decrease waste levels, and therefore become green.

Driverless vehicles are the most popular application of artificial intelligence in the context of logistics. First and foremost, a business can strengthen its route planning — finding more advantageous routes. This automation eliminates the human factor and brings more accuracy. In the coming years, we will witness an increasing number of zero-emission autonomous boats.

The planning of delivery urgency is another area where AI algorithms work well. More specifically, they help to boost shipping efficiency by defining its real necessity. Algorithms analyze the environment and then generate routes that bring fuel and urgency into line. Moreover, artificial intelligence easily adjusts to shifts in delivery prioritization. When done manually, this type of calculation can take a lot of time and cause delays. AI significantly speeds up complex decision-making. Using deep reinforcement learning, an organization calculates the accurate number of goods, the exact time of shipping, and the most relevant vehicle type. The fact that the system works in real-time helps mitigate any risks and quickly adapt to fluctuations. By conducting constant analysis of the supply chain, smart solutions recommend improvements and green contractors and partners.

Internet of Things. According to the Information Age data, industrial interconnectedness improves the environmental posture of more than 67% of companies. IoT works miracles in terms of fuel efficiency, waste reduction, and infrastructure management. First and foremost, IoT solutions help to plan routes rationally and reduce petrol consumption. Second, a company can track goods conditions during transportation. If any damage happens, or an item is near its expiry date, it is replaced timely. And third, civic infrastructure management through IoT solutions makes it environmentally friendly — sensors, LEDs, lampposts accumulating data in ensemble pave the way for green lightning.

Many global leaders have successfully incorporated IoT technologies into their business or intend to do so in the nearest future. For instance, Pirelli uses sensors iwarehousing and manufacturing, thus, reducing toxic emissions manifold. Or take FedEx: the corporation has a plan to shift to alternative fuel by 2030. Prominent companies do realize that digital creates new opportunities and has benefited from a business perspective. I offer to have a look at them.

Digital logistics means green logistics

Internet of things, mobile, blockchain, cloud — having these technologies embedded into the supply chain design enhances key areas of the industry. Since synergy and utmost synchronization are the pillars of effective work, smart management, planning, and control are today’s and tomorrow’s must. From an operational perspective, a company acquires real-time visibility across the chain, advanced optimization, valuable insights, improved horizontal and vertical collaboration via friendly user interfaces. Apart from being able to react right away, an organization becomes proactive, foresees various scenarios, and makes better decisions at every stage.

From a business perspective, digitalization in the name of a healthy environment and society bears a lot of advantages. Obviously, in order to be competitive, a business must be open to innovations, absorb the latest trends and best practices. However, in times of turbulence and uncertainty, responsible companies convey social value, which is like a beacon for customers across the globe.

A sustainable supply chain strengthens a brand’s reputation. Corporate social responsibility goes far beyond waste, emissions, and recycling. It encompasses green manufacturing, ethical conduct on many levels, gender equality in leading positions, diversity in the workplace, and much more. These are the building blocks to an impeccable reputation and worldwide recognition.

As far as the financial standpoint is concerned, green initiatives help increase a company’s profit and generate new revenue streams. After an organization joins the green movement, it is empowered to lead by example and the tools for sustainable supply chains. Also, an organization can earn more money by selling its own waste. Therefore, there is a chance to earn money and provide certain companies with raw materials.

To sum up: food for thought

Decisions in the context of logistics require new and agile approaches, whether it is transport modes, storing, handling various materials, labeling, packaging, or else. Virtual dimensions have shown great efficiency in meeting the challenges and requirements. The right time and place of procurement activity must not compromise the right quality. Investing in digital solutions does not only mean you invest in innovativeness — you invest in unparalleled experiences and high-value service.

Supply chain resilience is imperative for businesses. There is no room for uncertainty to responsible firms: you weave necessary tech into operations, collect and leverage data and convert it into solutions for the common good. That is the only way things will work in the foreseeable future.