Seeking a more sustainable supply chain

10th November 2021

Logistics BusinessSeeking a more sustainable supply chain

In light of COP26 taking place in Glasgow, Eddie Capel (pictured), CEO of supply chain software solution provider Manhattan Associates, looks at the importance of sustainable supply chains.

Over the last two centuries, the worldwide economy has experienced prolonged and sustained growth. Over the same period, this process of economic growth has been accompanied by even faster growth in global commerce.

The integration of national economies into a global economic system has been one of the most important and significant developments of the last century, with globalisation resulting in remarkable growth in trade between countries, with exports now 40+ times larger than in 1913.

This continued surge in globalisation post WW2 has seen international trade grow more rapidly than ever, and today the sum of exports and imports across nations amounts to more than 50% of the value of total global output.

While the increase in global commerce in general is regarded as a positive development, (you can now buy New Zealand grown apples in the USA, 365 days a year and they are delicious!), it has also brought challenges of its own; not least increasing moral, ethical and environmental questions, such as, ‘just because you can, does that mean you should?’

Furthermore, with much wider networks of international trade, there are now more and more questions around the challenges of increasingly complicated supply chains; not least, the impact that both globalisation and the fulfilment of global commerce presents to our environment.

With supply chains underpinning the very foundations of trade, the last two decades have understandably seen an increased impetus on supply chain gains such as speed and efficiency in order to maximise (often) squeezed margins.

These types of operational efficiencies are clearly important to the global markets we serve and over the last three decades we’ve thrived in this space.

However, today, not just from an industry perspective, but also at a societal level, there are more pressing priorities and sustainability and environmental awareness need to be high on the agenda for every organisation. As an industry leader in such a high-profile space right now, and with COP26 rapidly approaching, the time is right that we start talking about the topic of supply chain sustainability more actively.

Empowering greener consumer buying decisions

Most brands that offer direct-to-consumer (D2C) selling channels don’t have the ability to allow the consumer to aggregate orders over a multi-day period or change an order beyond maybe a 30-60 minute ‘remorse’ period. Essentially, it’s a case that after you have hit the buy button and completed the transaction you no longer have the ability to change, cancel or even add to your order.

This inflexibility inevitably leads to situations where purchases made over multiple days or even the same day end up being delivered by multiple couriers across multiple deliveries.

Thanks to advanced capabilities available with Manhattan Active Omni, there is a smarter way to manage D2C operations, allowing the customer to have more influence over their own retail supply chain decisions.

These capabilities essentially create an order as a ‘draft status’ when it is in the warehouse, allowing the customer to make changes and additions, right up until the moment it leaves on the truck – far more flexible than the traditional 30-60 minute grace period currently offered by most retailers.

This approach can help eliminate excessive delivery miles, along with the dunnage and packaging associated with multiple smaller orders; also reducing the carbon footprint associated with the returns process too.

Our goal is to allow our customers to give consumers the ability and options to influence the fulfilment process, in the hope that they will ultimately make more informed and ‘greener’ choices in the long-term.

Wasted space is bad for the planet not just your P&L

Smarter Pallet Fill Algorithms (PFA), such as those that are part of the latest release of Manhattan Active Inventory can provide as much as a 7% increase in the truck fill ratios (TFR). While the relative delta might seem small at first glance, when you have a fleet of thousands of trucks, travelling millions of miles each year, marginal gains can add up to significant reductions in an organisation’s overall carbon footprint.

If by having more efficient fleet loading capabilities, we can reduce the need for just one truck per month, we could reduce overall CO2 output by almost 40 metric tonnes each year. That is a significant reduction in CO2, acknowledged to be one of the most harmful green-house gases to the planet.

Smarter, greener approaches to transportation

If we continue with the transportation and delivery theme for a moment, let us consider strategy transportation management. Having a modern, effective TMS in place is another key consideration when addressing the environmental impact of your supply chain.

Manhattan Active Transportation Management is a powerful optimisation engine that makes transportation planning faster, smarter and easier. But it’s not just fast, it is also more intelligent, and here in lies the key to making transportation planning and networks less carbon intense.

At the heart of the solution is a multi-modal optimisation core that utilises cutting-edge, in-memory computing. This advanced optimisation engine uses machine learning to give brands and transportation managers the computing power they need to quickly process and analyse large volumes of data in order to create the ideal and most environmentally conscious logistics plans.

So whether it’s incorporating real-time weather, traffic, city-specific low emission zone data, or simply providing up to 80% faster solve times, a smarter, more data-driven transportation management solution is not just good for bottom-line profits and overall customer experience, it can also have a significant and positive effect on the environmental impact of a brand too.

Choosing the right partners

Let’s consider the role of the cloud in sustainability. While the cloud can certainly streamline organisations from both a practical and operational perspective, it is important to recognise that any IT deployment, be it ‘as a service’ or on-premise, will always carry an associated environmental cost.

As supply chain solutions increasingly become cloud-native, the nature of the clouds being used to deliver them therefore becomes more relevant.

Apart from being a market leader and innovator in the cloud space, our partner, Google Cloud’s platform is powered by 100% renewable energy.

Manhattan and Google Cloud’s commitment to ongoing innovation, plus its net carbon-neutral cloud, means that the working partnership between both industry leading teams continues to be a perfect match of brand and environmental values.

Shipping less air is good for everyone

Advances in the use of smarter algorithms are now having significant, positive impacts when it comes to reducing the amount of packaging used in warehouse and outbound delivery processes.

Whether it be Manhattan’s unique approach to three dimensional cubing (packing goods for shipment and shipping less air). Smart packing, dunnage utilisation or order fulfilment optimisation, with less packaging used throughout the supply chain, and less air (effectively) being shipped, volume per shipment is reduced and transportation becomes more efficient, meaning less trucks on the roads and fewer planes in the skies.

It’s a win, win for not just bottom-line profitability, supply chain efficiency and customer experience, but crucially the environment too; just another example of how the application of ‘smarter’ technology can drive ‘greener’ outcomes across entire supply chain networks.

The path towards a more sustainable future

At Manhattan Associates, we believe that the path to a cleaner, more sustainable future for the planet begins with the small decisions we can all make each and every day. That’s why we’re committed to building sustainability into the supply chain solutions we deliver to thousands of household brands all over the globe and incorporating more environmentally aware and sustainable approaches into our organisation too.

Whether it’s empowering consumers to make ‘greener’ buying decisions; creating smarter algorithms that allow organisations to reduce CO2 emissions by filling trucks more efficiently; partnering with carbon neutral brands like Google Cloud to power our cloud-based solutions; or simply designing products that place both people and planet, front of mind, Manhattan Associates is as committed to helping our customers run their supply chains in more sustainable ways.

We must not lose sight of the fact that global commerce is vitally important to the livelihoods and well-being of billions of people around the globe, and although the inherent nature of the movement of goods can never be entirely ‘green’, we must acknowledge that this does not mean it cannot be more sustainable for our planet than it has been in the past.

As an industry leader in the (supply chain) space that underpins the flow of global goods, we have a duty to recognise the challenges presented by climate change, to act responsibly and proactively, and to play our part in a coordinated effort towards a more sustainable and environmentally aware future.