On the road to a greener 2018: How digital transformation enables sustainable logistics
Jan 09, 2018
By Kushal Nahata, CEO of FarEye.
The logistics industry generates around 6% of global greenhouse gas (GHG) emissions, according to the findings of the Global Logistics Emission Council (GLEC) Framework.
Carbon reporting, which is mandatory for all UK listed companies, is the vital first step to enable businesses to set targets and put in place carbon management initiatives to reduce future emissions. DEFRA, the UK Department for Environment, Food and Rural Affairs, has estimated that reporting will contribute to saving four million tonnes of CO2e (carbon dioxide equivalent) emissions by 2021.
By adopting digital logistics, logistics companies can not only fulfil the regulatory and social pressures to reduce emissions and make their operations sustainable and environment friendly, but also identify potential cost reduction and revenue generating opportunities.
Integrating Digital Intelligence
According to Gartner, 77% of processes in supply-chain-dependent industries will be digitised by 2020. Logistics companies who understand how to exploit new digital technologies, from data analytics to automation and platform solutions will benefit and thrive. Those who don't, risk being left behind.
One of South Asia's premier express air and integrated transportation and distribution companies integrated our Business Process Management (BPM) engine with its existing IT infrastructure to automate its logistics operations from end- to-end. By simplifying and streamlining complex processes and eliminating mundane and repetitive tasks, the company has improved both operational efficiency and its customers' delivery happiness score whilst reducing its carbon footprint.
The web and mobile-based platform gives the business complete visibility of the logistics trail; using a mix of Artificial Intelligence and advanced algorithms provides a 360-degree, real-time view of deliveries which enables better decision making and keeps customers informed at every step. This company is now taking advantage of digital tools including auto-routing systems to optimise route planning which takes into account the time of day, traffic conditions, vehicle type and capacity, as well as the number of shipments that have to be delivered within a specific area and the number of available drivers. This also means the company can inform customers about the expected arrival time of their packages as well as giving them options to customise or personalise the expected delivery, such as rescheduling, changing the address or opting for a local store delivery etc.
In just 3 months, since integrating the solution in August 2017, first-attempt successful deliveries have increased resulting in a saving on fuel consumption. In addition, as many processes are now conducted, analysed and stored in the cloud, the company has vastly reduced its paper trail and the number of run sheets it creates. This logistics company is confident that these digitisation steps are essential to help it meet its aggressive target of zero-emissions by 2050.
A Competitive Edge
Rather than viewing carbon reporting as a regulatory headache, the drive to sustainability is an opportunity to realise a new wave of efficiencies and innovations and give logistics companies a competitive edge. Putting digital logistics firmly in the driving seat is not only good for the environment but is also good for the business.