How are performance targets and sustainability goals related? Spoiler alert! Sustainability does actually have great potential to increase performance in logistics operations.
Heat waves, droughts, melting glaciers, etc. can no longer be ignored. That’s why consumers, employees, and governments demand more responsibility, transparency, and sustainable action from companies. Long gone are the times when these demands were limited to the end product. The three pillars of sustainability comprise social, environmental, and economic factors across the entire value chain. Thus, logistics companies must also ask themselves how they can profitably implement sustainability factors.
Can the reduction of the CO2 footprint, occupational safety, and financial guidelines be anchored in your operation in such a way that productivity remains high?
Economic, ecological, social sustainability factors that improve performance
Research suggests that “sustainable warehousing has tremendous potential to achieve goals of sustainable development”. Here are some examples what impact the different dimensions are likely to have on performance and costs.
Optimizing inventories in such a way that there is neither waste nor loss of sales is obviously sustainable. Less obvious may be the effect of good shift planning. If employees are given sufficient opportunity to rest and their biorhythms are disturbed as little as possible, their productivity increases. Also, efficient maintenance management helps to avoid incidents like damaged batteries, low tire pressure, loose screws and thus, reduces costs.
Oil, gas, and coal are still widely used. Changing to renewable energies such as photovoltaics, wind energy, or biodiesel is not only sustainable, but can also contribute to lower costs in the long run. Water conservation through the use of rainwater offer further savings potential. Also, training employees on topics such as fuel-efficient driving also makes a lasting contribution to cost reduction.
Studies prove that sleep deficiency has a negative effect on health and productivity. Balanced shift plans with rotating night shifts promote higher performance and employee safety. Like optimum usage of daylight, comprehensive trainings and a good work-life-balance have a positive effect on costs. A poor lighting scheme reduces visibility and thus, can lead to lower performance and a higher accident risk.
List of best practice methods
Sustainable logistics operations are even likely to increase their productivity. Here is a list of best practices that can make an impact.
- Use renewable energy sources for running warehouse operations
- Lighting scheme with maximum use of natural sunlight
- Efficient artificial lighting
- Set warehouse temperature at a level that uses a minimum amount of energy
- Conserve water through latest water-management techniques
- Minimize noise pollution
- Enhance biodiversity of the facility and its surroundings
- Optimize warehouse layout to minimize travelling distance for daily operations
- Use a storage system and strategy that optimizes the warehouse operations
- Avoid congestion by elaborate aisle design
- Arrange warehouse departments for the most efficient workflow pattern
- Optimize inventory levels to avoid both obsolescence and lost sales
- Ensure accurate inventory records
- Adopt policies to ensure work-life-balance for employees
- Design shift roster in a way that minimizes disruption to natural body clocks
- Ensure both technical and soft-skill training for warehouse staff
- Maintain high standards of occupational health and safety
- Use MHE that has environment friendly energy sources
- Introduce comprehensive maintenance management
- Train operators on fuel-efficient and safe driving
- Optimize inbound processes for efficient unloading, receiving, rework and put-away
- Optimize storage processes to improve utilization of storage space
- Optimize picking process such that picker’s travelling time is minimized
- Optimize outbound processes for efficient loading and dispatch
- Provide welfare facilities (e. g. wash rooms, canteen, changing rooms) to all employees
- Maintain an emergency/medical room with proper facilities and trained staff
- Use cross-docking to enhance operational efficiency and customer response time
- Establish a recycling facility onsite to minimize waste production
- Implement a robust, scalable and reliable software system for performance measurement
- Develop a warehouse strategy to improve sustainability performance using intelligent software
You may find further details on these factors in the research paper.
redPILOT aims to measure the impact of sustainability factors on the performance of logistics operations. Contact us for more information.