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Utilizing Green Supply Chains
By: Simon Kaye, CEO, Jaguar Freight
Posted: July 27, 2010, from the August 2010 issue of GCI Magazine.
Just as the beauty industry must be committed to environmentally responsible and sustainable products, so too must the industry’s logistics infrastructure be fully integrated with a "green" strategy and outlook. Such green concerns as fuel consumption and carbon emissions have a direct impact on costs and competitiveness, and global supply chains face a large and growing number of local, national and multinational regulations related to these issues. Sustainability for the logistics process also involves a variety of other elements, from packaging to processing time.
However, achieving a truly green supply chain requires dealing with a fundamental catch-22. In logistics, time is money. The fastest modes of distribution, particularly air transport and expedited ground freight delivery, are often required as customer-responsive, competitive solutions, but they are also the most energy-intensive. The significant reliance on air freight and trucking reflects the demands of rapidly changing market conditions that must be met by just-in-time modes of production—both of which are essential elements of the competitive landscape for brand owners and retailers.
Fortunately, a green supply chain can respond to intense competitive pressures by using initiatives that combine environmental sustainability with best business practices. More efficiency in shipment tracking can serve as a perfect example. For companies that source globally, inefficient supply chain documentation means information snags, missing or ill-prepared shipping documents, and inappropriate cargo routing that can create huge and unnecessary waste in fuel and require expedited, energy-inefficient delivery to overcome delays. The fundamental problem is lack of information, which can involve incomplete or missing data about the status of shipments, an inability to retrieve data when needed, or an inability to adequately document shipment status. It wastes substantial time and energy spent chasing information which ought to be readily available, and creates energy-wasting delays at ports, air cargo terminals, customs inspection points—anyplace that shipments should freely pass. Comprehensive electronic tracking eliminates this inefficiency by bringing optimal efficiency to aggregating and optimizing loads and routes, for transportation planning that reduces both the fuel consumption and carbon footprint of shippers.
The Electronic Solution
In its basic form electronic tracking means the creation of comprehensive databases that take the extreme complexity of supply chain data and simplify it in order to define patterns that allow producers to understand their supply-chain function. Electronic tracking information for cargo is a relatively new phenomenon, but it is absolutely vital for a green supply chain. There is simply no other way to ensure that freight gets where it needs to go on time, without wasting of fuel, shipping resources and processing time.
As the ally of green shipping, electronic tracking shows what is happening at every step in the supply chain, enabling producer, shipper and forwarder to cross-check and validate progress and timings of shipments. The result is delivery on time and with proper quality thanks to online and real time updates on shipment location, quantity and composition. This improves both fuel efficiency and cost effectiveness, because it eliminates the guesswork and backtracking to find misplaced shipments. It also facilitates up-to-the-minute route and load scheduling to take account of everything from weather conditions to last minute, just-in-time shipment adjustments. Maximum flexibility in energy consumption, and the resulting reduction in excess greenhouse gas emissions, is inseparable from the kind of precise shipment control that electronic tracking provides.