Real-time visibility to drive supply chain sustainability
Reading time4 minutes
Written onApril 21st 2021
The COVID-19 pandemic has drawn attention away from sustainability issues. But somehow, the pandemic will stop, leading individuals and governments to focus even more their attention on environmental and sustainability topics. For most companies, supply chain sustainability will be one of the major priorities to embrace sustainable commitment.
Sustainable supply chains are key to improve global companies’ sustainability
Consumers increasingly want to buy goods and services from firms that limit their impact on the planet. A recent report from Capgemini highlighted that 79% of consumers are changing their purchase preferences based on social responsibility, inclusiveness, or environmental impact.
Working on supply chain sustainability will be one of the most significant challenges companies will face if they want to cope with consumers’ purchasing behavior. A McKinsey study estimates that the typical consumer company’s supply chain accounts for more than 80% of greenhouse-gas emissions and more than 90% of their impact on the planet compared to its global operations.
Through global or regional initiatives like the European Green Deal, governments and various international organizations are putting more pressure on companies to regulate their environmental impact. Improving logistics and optimizing supply chains can have a significant impact on reducing CO2 emissions from international trade-related freight transport. With further pressures from the government and the rising demand from customers for more sustainable products, companies will have to define strategies to improve their environmental impact. Supply chain sustainability will be at the heart of companies’ strategies.
More visibility, less waste
Visibility also enables companies to improve stock management. Better stock management implies fewer products are wasted or destroyed. By pushing dynamic ETAs directly into any existing ERP system, Wakeo provides accurate stock replenishment information. Tracking information pushed back by API and matched within the ERP enables to update ETA at delivery note level and update stocks replenishment according to Wakeo’s latest data. Dynamic inventory management is an example of how a single initiative can converge to multiple priorities: digitalization, cost efficiency, and sustainability.
Leveraging data to support business sustainability strategies
At a company level, measuring actual transport emissions is very complex. The first issue that companies are facing when assessing their environmental impact is data reliability. Transport networks are multimodal and involve many stakeholders. As information is heterogeneous and hard to gather, companies have partial visibility and a low level of reliability concerning their environmental impact. Data enables to evaluate their contribution to environmental sustainability and enhance behaviors and operations that have a positive impact.
Wakeo launched a unique Carbon Footprint Calculator for multimodal transport flows to support customers’ environmental sustainability initiatives. The calculation methodology is based on many criteria to provide a significantly reliable and accurate calculation, taking into account the effectively realized transport rather than a theoretical transport plan. Moreover, Wakeo relies on a methodology compliant with the European Union and certified by the Global Logistics Emissions Council (GLEC) Framework to ensure a standardized and accurate measurement. This calculation combines many parameters like the transport modes, the transport specificities according to the carrier - vessel type, aircraft, vehicle type, fuel types, etc.-, the distance of shipments including transshipments tracked by Wakeo, and the actual weight, which is a major driver on transport emissions.
Accurate data on transport emissions on every multimodal shipment (sea, air, road, rail) enables supply chain leaders to build and support consistent sustainability strategies based on essential metrics.
Visibility to choose the cleanest alternatives
Collecting accurate data will also help to manage and control sustainability factors. With all transport emissions data consolidated in one neutral platform, companies can benefit from global visibility on emissions level over time according to modes, transport providers, or routes. Lane performance scorecards enable the identification of optimal routings and optimize operations to meet carbon neutrality. With visibility and analytics capabilities, companies will next be able to analyze transport emissions levels according to different transport scenarios, highlight the cleanest routes and quantify the impact of possible alternatives to limit their environmental impact. Visibility allows organizations to choose the routes and modes that will create the least amount of waste.
The World Economic Forum estimates that digitization can reduce emissions from logistics by 10% to 12% by 2025. Companies that invest in visibility software solutions may be well-positioned to manage their supply chain impact and cope with global regulations while benefiting from the boom in sustainable consumer spending that will take place over the next decade and beyond.