As global demand for shipping and transportation continues to grow at a rapid rate, so do the environmental consequences. According the global management consulting firm McKinsey & Company, “The typical consumer company’s supply chain creates far greater social and environmental costs than its own operations, accounting for more than 80 percent of greenhouse-gas emissions and more than 90 percent of the impact on air, land, water, biodiversity, and geological resources.”
Luckily, the Internet of Things (IoT) is also on the rise. Technology like real-time monitoring is offering business owners new opportunities to drastically improve the performance and productivity of supply chain operations while also reducing their environmental impact.
Sustainability issues in transportation
In order to understand the true scope of their environmental impact, companies need to gaze beyond their own operations and take a critical look at their entire supply chain.
As supply chains become increasingly global, the distances grow longer and multiple transportation modes are often required and energy demands increase. It’s no surprise that transportation-related pollution is a problem. According to the UN Environment Programme, transportation is currently responsible for nearly a quarter of global energy-related CO2 emissions.
Food waste is also another major sustainability issue in the transportation sector, where damage and contamination are common occurrences. The UN Food and Agriculture Organization reports that about one-third, or 1.3 billion tonnes, of food produced globally for human consumption is either lost or wasted every year.
IoT and the new era of smart and sustainable shipping
The steady advancement of IoT technology is opening a door to a new era where profitability and sustainability can coexist. IoT promises to optimize the entire supply chain and deliver everything from increased supply chain visibility and productivity to reduced costs.
“The real power of IoT lies in intelligently connecting people, processes, data and things—and exploiting that intelligence to radically change business processes,” writes OpenText, the enterprise information management company, in a recent white paper.
“Ultimately, the goal is to enable real-time and informed decision-making that allows organizations to move beyond efficiency and cost improvements toward implementing more effective business strategies around new product development, proactive inventory management and demand-driven production,” they say.
How IoT benefits sustainable shipping
- Greater supply chain visibility and shipment overview
- Maximized value of IT and other equipment
- Improved inventory stock management
- More efficient routing and reduced waste
- Less overproduction and better supply-demand matching
Less waste and more energy efficiency with real-time monitoring
One of the most exciting IoT technologies that’s paving the way to greener shipping is real-time monitoring. This technology eliminates the risk of human error and helps create greater transparency along the entire supply chain by supplying reliable insights in real-time.
When supply chain managers are empowered with the information they need at the right time, they are better equipped to ensure cargo arrives in the best possible condition—or to intervene and prevent damage and waste before it’s too late. Real-time monitoring can also be used to improve inventory stock management and transition to demand-driven production.
Improved data accuracy and accessibility can also help increase energy efficiency during transportation and at other points within the logistics network. Reliable cargo shipment data makes it easier to optimize shipping routes, improve dock scheduling, and use warehouse resources more efficiently.
Four steps to a more sustainable supply chain
Companies don’t have to leverage IoT technology in order to make their supply chains more sustainable, though it certainly can help. Here are some of the steps your supply chain manager can take to start creating a more sustainable supply chain right now.
1. Identify existing sustainability issues
To understand the true scope of your supply chain’s impact on the environment, it’s important to take inventory of what and how resources are being used along every point of the production process—from sourcing and manufacturing to transportation.
Overwhelmed? Integrating IoT monitoring solutions is a great way to establish a better overview and greater transparency in your supply chain. Organizations like TSC, WWF, The Sustainability Accounting Standards Board, and CDP and the Global Reporting Initiative also have tools and processes that can help you identify and resolve impact areas.
2. Minimize overproduction
Is your supply aligned with the actual demand? Overproduction is a huge contributor to resource depletion, waste and economic loss. IoT technology like AI and machine learning can help you more precisely forecast demand and make both your supply and manufacturing processes more efficient. Predictive analytics can even help you consolidate shipments in a smarter way and use existing assets more efficiently.
3. Optimize shipping routes
If you haven’t already, create a detailed map of your supply chain. Having a real overview makes it a lot easier to spot inefficiencies and reroute if necessary to save time and reduce fuel consumption. Real-time monitoring can help provide this overview and even empower you with the insights you need to make route adjustments on-the-fly when traffic congestion or other unexpected issues pop up.
4. Set standards for your suppliers
Are your suppliers sourcing and using resources responsibly? Establishing and communicating sustainability standards and best practices, combined with increased transparency, can raise accountability levels across your supply chain and encourage your suppliers to get onboard and contribute to your sustainability efforts.
Making green shipping a reality
The advancement of IoT technology is already going a long way towards helping sustainability-conscious companies reduce the environmental impact of their supply chain operations. With a combination of the right technological tools, awareness, and smart supply chain strategies we can create a greener shipping industry where both the environment and commerce can thrive.
What’s your tool for change? At MOST we are helping make the sustainable future happen today. Our monitoring solution empowers companies with the visibility and real-time insights they need to make changes where they count. If you’re looking for a partner in your journey towards a more sustainable and strategic supply chain, we’re happy to help.