With safe habitat new hot word, 3PL firms initiated alternate fuels, route optimization, consolidating load to improve effectiveness of logistics and supply chain, says Sanket Sheth, Founder & MD, Elixia Tech Solutions.
In today’s world, you may come across many sustainability concerns across various industries. But, as companies lean towards environmentalism, they are improving the internal system to address the concerns.
With this taken into consideration, green supply chain management is able to resolve the issues around commercial manufacturing techniques. As per the 2020 Third-Party Logistics Study, around 20 per cent of the companies are piloting alternative fuels, while almost 80 per cent of the organizations are optimizing the routes and consolidating the load. In addition, 66 per cent of the 3PL users and 93 per cent of the 3PL providers agree that they will offer new and innovative ways to improve the effectiveness of logistics. So, let us check out the way in detail to know how the supply chain is moving ahead with the initiatives.
Efficient Transportation
Transporting goods across a long distance from the warehouse has now led to greenhouse gas emissions as fossil fuels get burnt along the way. Through Green Supply Chain Management (GSCM), the vehicles are using alternative fuels and are establishing relationships between local suppliers and manufacturers. To implement such a strategy, the companies will need to gather material from a few sources. The team needs to consider how they can transform the products and pack them to meet the suppliers’ needs.
On the other hand, while it may become complicated to improve the means of transportation, most of the modern modes are releasing emissions to a certain extent. However, this may not be the case in every instance because green initiatives are not ubiquitous all the time. With an aim to address this issue, the SmartWay initiative is helping manufacturers keep track of the emissions, choose sustainable freight carriers, and embrace fuel-saving technology for taking goods from one location to the other.
JIT Management
Just In Time (JIT) Management involves moving material just before it is required in the manufacturing process. This helps reduce the need for maintaining excess material at the warehouse. This, in turn, assists in avoiding spending more on the material and filling the warehouse excessively. When the companies consider such a kind of strategy, it may take some time for its implementation. But, when everything is executed in the right manner, it can streamline production way ahead. Furthermore, after data analysis, managers will be able to predict the purchasing trends to meet the demand. It will help the company to get a fair idea about how much material it may require for manufacturing the products on a large scale. Now, let us check JIT management through an example.
As Toyota moves ahead in presenting its vehicles, it employs JIT Management by following certain guidelines. The entire gamut of activities is carried out along with Jidoka. This is nothing but a system that helps to prevent defective vehicles from leaving the site. Due to this, the team at Toyota has gained the experience of designing cars in the shortest time possible without compromising on quality.
Route Optimization
A Transportation Management System (TMS) can help to save money in several ways. It not only aids to lower down the cost while selecting the modes but also optimize multiple routes. Nevertheless, with prime focus on sustainability, the companies can save more through route optimization. As the TMS also helps in consolidating loads, it implies that fewer heavy duty vehicles have to be loaded to deliver the goods. But, after optimizing the routes, the companies can determine the best and the ideal route which leads to a significant decrease in fuel costs. Above all, when supply chain sustainability is the main concern, it is essential to transport goods along a better route so that heavy duty vehicles consume less fuel.
Process Efficiency
Using cyber-physical systems, the manufacturing sector can make production much efficient. Artificial Intelligence (AI) can help to reduce downtime, anticipate failures and optimize asset utilization. As the work is done in less time, it affects the availability of the assets and the Overall Equipment Effectiveness (OEE). Predictive maintenance enables the team to make provision for components so that it reduces the impact on the production line. The team can also gather insights from data through the IoT devices for improving asset utilization. They can focus on improving the quality apart from productivity. If you use a supply chain control tower, then the intuitive dashboard helps reduce the logistics costs and the overall cost considerably.
Through Machine Learning (ML), eInfochips has come up with customized solutions for automating factories and making the operations even more efficient. Nudie Foods is yet another company that gains insights with the use of monitoring software to identify the assets which are drastically improve productivity, and reduce operational costs.
Finally, it can be observed that GSCM has helped several companies to contribute towards ecological conservation and preservation. They are able to pace ahead by reducing the instances of following wasteful practices. They have succeeded ahead to use the funds for managing product development in the best way. As businesses move on with the GSCM, they are able to become leaders in innovation and sustainability.
