How to Promote Sustainability in the Distribution Industry

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As consumers demand more sustainable practices by sellers, and governments increase regulations to reduce carbon footprints, businesses must promote environmental responsibility and change how they operate. 

One of the most significant sources of waste in distribution is packaging. Businesses can reduce their environmental impact using sustainable packaging materials, such as biodegradable or recycled materials. They can also cut down on packaging by optimizing design and using lighter and more compact materials, all while protecting their products. New companies are offering innovative packaging options that are cost-effective and better for the environment. Wisconsin-based Rocket Industrial, for example, is seeking to change how companies package their products with its “Package With Less” philosophy. According to company president and chief executive officer Ryan Gallagher, about a third of items in landfills consist of packaging. In 2016, Rocket set a goal to keep one million pounds of packaging from ending up in landfills annually; in 2020, it achieved that goal.

A warehouse management software (WMS) system can select the smallest possible box or container for the job. However, it’s essential to balance the need to reduce packaging with the risk of product being damaged in transit. By carefully considering both factors, companies can select the most suitable shipping container while protecting the product and saving on shipping costs.

Transportation is another significant source of carbon emissions and costs. Businesses can reduce their carbon footprint by optimizing transportation routes, reducing the number of vehicles and using fuel-efficient models. A transportation management system (TMS) can route internal fleets to optimize deliveries using the least fuel and driver time. According to the Harvard Business Review, UPS’s policy of minimizing left turns has helped save over 100 million gallons of fuel over a decade. Another strategy is consolidating shipments and using shared transportation, such as rail or ship, to reduce the carbon footprint. 

Taking steps to cut energy consumption in offices, warehouses and distribution centers makes good sense environmentally and economically. Examples include:

  • Upgrading traditional lighting to energy-efficient LED lights with motion sensors that shut them off when unnecessary. 
  • Using renewable energy sources by installing solar panels and wind turbines.  
  • Installing high-efficiency HVAC systems with a SEER rating of 13 or more. In the winter, large ceiling fans can gently push down warmer air to reduce HVAC energy consumption. A warehouse can be more than 10 degrees warmer near the ceiling than the floor. 
  • Replacing old and inefficient forklifts, conveyors and other equipment with energy-efficient versions.
  • Installing large, flat roofs on distribution centers to accommodate the installation of solar panels.
  • Conducting a professional energy audit to identify where energy consumption can be reduced in businesses, and help with an ROI analysis.

Several incentives are available to companies wishing to acquire green technology. Companies can look to attain LEED certification for their buildings. LEED points are awarded on a 100-point scale, and credits are weighted to reflect their potential environmental impacts. Ten bonus credits are available, four of which address regionally specific environmental issues. A project must satisfy all prerequisites and earn a minimum of points to be certified under four levels: Certified, Silver, Gold or Platinum. Third-party certification is required.

By optimizing the flow of goods through the building with a proper layout, organizations can reduce the movement of people and equipment. Advanced warehousing practices such as directed put-away prevent forklift drivers from driving around the distribution center looking for places to store goods. Task interleaving allows a team to accomplish tasks more efficiently. Dynamic slotting reduces travel by putting the right items in the right spot in the DC. Data analytics and real-time inventory management provide accurate information on inventory levels and locations for efficient picking and replenishment.

Carbon offsetting compensates for greenhouse gas emissions by funding projects that reduce or remove greenhouse gases from the atmosphere. Distribution companies can offset their carbon emissions by investing in projects such as planting trees or investing in renewable energy.

To meet the demands of consumers and government for more environmentally responsible practices, it’s essential that businesses promote sustainability in distribution on a global scale. Greener packaging, optimized transportation and other sustainable practices can help toward that goal, while improving the bottom line and enhancing brand reputation. As the importance of sustainability continues to grow, companies that invest in these strategies will be better positioned to succeed in the years ahead.

Will Quinn is director of distribution industry and solution strategy with Infor.

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