Green logistics in India: How companies can increase efficiency by these 3 simple ways

November 5, 2020 11:38 AM

Indian logistics industry players are yet to appreciate the fact that green logistics is compatible with their bottom-line.

green logistics, logitics in india, efficiency, warehousing, cost optimisationWhile implementing energy-efficient warehousing measures, more than 20% of cost savings can be achieved. (Bloomberg image)

V Raju

For long, ‘Green’ has been a handy catchphrase for businesses and policymakers to exhibit their commitment towards preserving the environment by prefixing it with almost everything that deals with saving the environment. But who is not eco-friendly nowadays? The logistics sector is no exception to this trend. After all, it is one of the major contributors to environmental pollution. Around a quarter of global CO2 emissions are due to fossil fuel combustion in the transport sector alone, according to the International Energy Association.

Any discussion on green logistics usually remains confined to transportation—though it is a major sub-sector of logistics—whereas logistics includes facilities like warehousing, transport terminals, packaging, distribution, material handling, and even disposal. If we avoid the fallacy of equating logistics with transportation, we will be able to understand the negative externalities of logistics activities. In fact, even as logistics move goods within supply chains, the environmental impact is much beyond the oft-maligned GHG emissions from freight and passenger transport. Warehouses pose a threat to the safety of the neighbourhood, more so, if stocked with hazardous goods; terminals at ports, airports, and stations add to noise pollution as vehicles and cranes move; discarded packaging sullies the landscape; improper waste disposal contaminates land and water.

For resuscitating and implementing green logistics in India, we need to address the issue at three levels: public policy, business, and individual. These three tiers interact with and influence one another. But no cut-and-dried or easy solutions are in sight. In any case, government intervention for the right pricing, incentivizing it, laying down regulations, and enforcing them is imperative.

Indian logistics industry players are yet to appreciate the fact that green logistics is compatible with their bottom-line. Fuel efficiency, payload management, routing, and driving techniques matter a lot in saving costs. For small trucking companies masquerading as logistics operators, performance metrics for monitoring these aspects are alien practices. Going green and being greener than your competitors is still not considered an advantage in the Indian logistics industry due to consumer apathy. Reverse logistics industry that takes care of recovery—retrieval of parts, recycling of products, and disposal of packaging waste—is almost non-existent in India.

With the rise of e-commerce, there is a concomitant rise in packaging waste. Though many e-retailers no longer provide paper receipts to enhance their green-image, they still do not provide consumers with the option of disposing of packaging material, even at a nominal cost. Mandatory legislation regarding these aspects like in the E. U. would prod both consumers and businesses in the right direction and push towards a ‘circular economy’ while contributing to the Swachh Bharat Abhiyan as well.

Nevertheless, the future looks bright for warehousing. This is especially true when it comes to taking a green approach to procurement and manufacturing. Eco-friendly warehouses present a tremendous upside for the planet. It is time for all of us to act on each and every point mentioned below.

Lighting sustainability

Modernized LED lighting focuses more on providing a true illumination option at a resourceful rate. This approach is also kind to the environment as it reduces usage and consumption rates. In addition, solar-powered energy generation not only helps us reduce energy consumption but also saves energy costs.

Smartly located inventory

Smartly located inventory is a proven way to bolster efficiency and productivity because it requires workers to put less effort. As a result, personnel will have more time to commit to other things and increase productivity, which also means projects will be carried out faster. As a result, profitability will also skyrocket thanks to this ideology.

Energy management systems

The best way to lower consumption is to manage it. Energy management systems autonomously oversee all the utilities one facility uses without much human intervention. With the integration of timers, thermostats, and gauges for all forms of electricity, gas, heat, and water, energy management systems derive the best practices to use what is needed without excessive waste. This is a fundamental component of eco-friendly systems because it helps businesses lower the usage of renewable resources while also placing more money back in their pockets.

Electric forklifts

Electric/battery forklifts eliminate the need for gas and oil. Not only is this good for the environment but it is also safer for employees. Personnel no longer need to expose themselves to dangerous chemicals such as battery acid, anti-freeze liquid. This can slash the level of incidents related to hazardous materials handling, which, in turn, drives up the bottom line. Electric forklifts are as their name entails: simply plug them in before and after the operation.

Sustainable warehousing – a fresh approach

When it comes to creating sustainable value, there are several practices that warehouses can implement. Some such approaches include automating both warehouse solutions and management processes, increasing energy efficiency within a warehouse, and optimizing warehouse design.

In addition to implementing WMS in their warehousing processes, companies will also do well to incorporate other automated solutions including order picking technologies (pick-to-light technology, voice technology, sortation systems, etc.), bar-coding, radio frequency identification (RFID), and automated storage and retrieval systems (ASRS) to achieve a sustainable warehousing system.

By automating labor-intensive processes, companies can achieve financial and business management sustainability benefits in the long run as improved inventory visibility can increase product accuracy and even influence customer satisfaction. For example, companies switching to bar-coding and RFID technologies will inevitably see a reduction in paper consumption as they adopt a largely digital approach, thus lending a hand to environmental sustainability along the way. A big concern in the logistics industry, traceability can also be better accounted for with automated warehousing systems. In the event of a product recall, the WMS will be able to provide companies with necessary details for efficient recall. Sustainable value is achieved as companies see less waste in terms of resources, time, and energy required to trace and recover products.

In the business landscape where competition is rife and there is an ever-present threat to survival, an ASRS could potentially help manufacturers cope with rising business pressures, increasing labour costs, intensified calls for safety, and the need for tighter security. On top of more productive sorting and retrieving processes, an ASRS is particularly useful in minimizing the warehouse footprint as it offers innovative storage solutions. Utilizing vertical space within a warehouse, ASRS are capable of handling and processing a higher volume of orders in a given period of time and space. ASRS can also help companies avoid unfavourable environmental impact that may result from constructing a new warehouse.

Increasing energy efficiency

Warehouses consume a large amount of energy within a regular logistics supply chain. However, automated warehousing solutions can be responsible for significant amounts of energy savings as they can function in both darknesses and in non-heated environments. This is a stark contrast to conventional warehouse equipment that has high-energy consumption levels and high operating costs. For day-to-day operations in an automated warehouse, it is advisable to instill ‘lights-out operation’ as lights are generally required only during routine maintenance checks. Automated technologies such as stacker cranes can function independently without supervision, so it is unnecessary to cater for this expenditure.

Warehouses that integrate green warehousing practices such as daylighting technology (skylights, photocell sensors, etc.) will help companies to save energy costs in the long run. Some methods that can be used include fitting warehouses with solar panels or light-emitting diode (LED) lighting, power regeneration by converting braking forces from automated equipment to electricity, and recovering heat that is generated from cold storage systems. Other methods include switching to natural ventilation instead of electrically-run ventilation, and even adjusting the speed of conveyors and palletisers so that when left unused, this equipment can run at a slower pace or be turned off.

While implementing energy-efficient warehousing measures, more than 20% of cost savings can be achieved. Companies adopting green warehousing practices can then work towards building a financially and environmentally sustainable business.

Optimizing warehouse design

Careful planning of the warehouse layout is not only crucial for companies to maximize workflow efficiency and remove unnecessary steps within the warehousing process but also important to ensure that the warehouse can integrate new functions easily in the future. Companies should aim at maximizing their cube-wise space – length, width, and height – to fully optimize the warehouse for efficient material handling, order picking, and storage processes, accommodating personnel movement, and handling of equipment such as MHEs of different makes. Inefficient use of warehouse space can lead to excess utility, unnecessary labour costs, and lower asset utilization.

When constructing the layout, companies need to collect operation data on actual facility throughput, information on warehouse structure requirements such as loading and levelness, precision data on floor flatness, and even weather information as it relates to the possible impact on warehouse structure durability. By incorporating these factors into the warehouse design, companies will be able to achieve energy efficiency and increase productivity. In days to come, energy savings in every warehouse will be the new thinking point for decision makers to dwell upon.

While it is evident that companies who incorporate sustainability initiatives in their warehouse can enjoy financial and environmental sustainability, it must be said that sustainability needs to be strategically managed and given top management support for actions to take place. As the logistics industry continues to evolve, the three approaches highlighted above can be employed by companies to increase the positive effects of their business activities on the environment. And as a significant component in supply chains worldwide, the warehouse can be a competitive asset for businesses to achieve both financial and environmental sustainability objectives in the long-term.

V Raju is Senior Vice President, CL – Chemical, Pharma & Food Sector, at Avvashya CCI Logistics. Views expressed are the author’s personal. 

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