Low Carbon In The Supply Chain

Low carbon initiatives in the supply chain are important for both current and future supply chain initiatives because of the growing focus on climate change and the impact of the supply chain on the climate initiatives. The supply chain transformation includes low carbon as a key tennant resulting from the transformation initiatives that will impact the supply chain carbon footprint, especially demand forecasting improvements across the entire supply chain. Because the extended supply chain plays such a large role in the overall climate improvements initiatives it requires a focus from the supply chain to delivery on the improvements in a manner that does not dramatically increase the costs to the consumer. Also, and most importantly, these low carbon initiatives support the supply chain initiatives currently driving the transformation of the supply chain and the extended supply chain partner and services.




Low carbon initiatives have been an integral part of the supply chain for a long time. In reality low carbon initiatives started a long time ago with a focus on reducing costs of transportation in the supply chain to improve profits and these initiatives really kickedinot gear with the increases in fuel prices. These increased costs drove improvements in transportation efficiencies and with these efficiencies reduced carbon levels. The improvements in efficiencies was also coupled with new regulations into emissions which in turn also pushed increased efficiencies. These costs though were essentially a zero sum gain because the increased efficiencies driving the reduction in fuel consumption more than anything simply covered the costs of increased fuel.




Then regulations began to impact the supply chain by spreading the focus from transportation into buildings and also locations of the distribution centers to improve the transportation efficiencies. These regulations were coupled with tax incentives to offset the costs and entice supply chain partners to convert and build using the new efficiencies. These are also driving supply chain partners to reduce their carbon footprint through solar energy, low power LED lighting, increased insulation to reduce heating and air conditioning cost along with increased safety through the implementation of these measures. These building regulations though expanded the low carbon initiatives into the warehouse, distribution center and offices thereby lowering the overall carbon footprint of the supply chain along with the entire business community.




The supply chain in the last five to ten years has increased use of intermodal transportation methods to increase efficiencies in long haul transport, especially from import ports around the coasts. This is another area where the outcome will provide benefits to the environment while also not increasing the costs in the supply chain. In fact, I think this is one of the major areas where the impact on the environment and the supply chain may result in reductions. We are quickly reaching the point where transportation demands in delivery time reductions and efficiencies in the volumes of deliveries demand a model that takes into account all factors in the supply chain to develop the most efficient, cost effective and environment neutral solutions.




The latest piece in the puzzle is the use of the data analytics and artificial intelligence to develop highly efficient solutions that are flexible and highly efficient to improve the end to end supply chain while maintaining and reducing costs. We have reached the limit, I think, of what I would call non-assisted solutions and artificial intelligence solutions can take the vast amounts of information available to analyze and develop new solutions. The demand for low carbon solutions is only increasing and the supply chain will continue to be at the forefront of these solutions through the implementation and integration of AI designed solutions.