Over the past few years, retailers have taken huge strides to understand and address the environmental impact of the supply chain. For Net Zero, shifting production domestically and near shore is reducing carbon emissions and concentrating on reducing empty miles in both inbound and last mile delivery is improving green performance.
Yet in the middle of this process is the warehouse. From heat and lighting to packaging and miles. moved around the site, warehouses can often represent a black hole when it comes to sustainability measures. With rising costs and an escalating labour shortage on top of green expectations, retailers can no longer overlook warehouse inefficiency of any kind.
Alex MacPherson, Director of Solution Consulting and Account Management at Manhattan Associates, outlines the significant opportunities to improve both efficiency and environmental performance that will support brands looking at their overall, end-to-end environmental impact.
The Challenges faced
Business’ environmental awareness and commitments are increasing fast. In response to customer expectations, growing shareholder demands for greener business models and punitive regulations, Net Zero pledges are now a core component of the corporate strategy.
For retailers, however, every aspect of the business model is inherently environmentally unfriendly. However, over the last 18 months, retailers have worked hard to achieve significant improvements to both their inbound and outbound transportation processes: companies have reduced their reliance on Eastern manufacturing to achieve more agility and reduce travel miles too; consolidators are encouraging retailers to work together to maximise shipment fill and minimise empty miles; and customers are being encouraged to embrace ‘slower’ delivery models, with intelligent route scheduling enabling retailers to offer lower cost greener deliveries while nudging behavioural change in a more sustainable direction.
Environmental Impact on the Horizon
The warehouse, however, remains a significant challenge to any Net Zero goals. These enormous buildings have doors open at each end – inbound and outbound – day and night, adding a massive heating overhead to the 24×7 lighting demands. With the rise in ecommerce, packaging usage has skyrocketed – a shocking one third of all solid waste in the US is ecommerce packaging.
Steps have been taken to mitigate some environmental impact with a number of green housekeeping adopted in the majority of large warehouse sites. LED lighting is standard, insulation has been improved. Rain water harvesting is becoming more commonplace, alongside solar panels and wind turbines too.
The majority of packaging material that arrives within warehouses is now recycled; although, many retailers are still wrestling with the challenges of creating outbound packaging that is both recyclable and robust enough to be undamaged in transit. Further improvements in the technology of recyclable materials will no doubt continue apace and offer retailers wider choice in the future.
It is within the warehouse that significant process review and overhaul could now make a significant contribution to reducing the carbon footprint and moving closer to Net Zero.
Growing numbers of retailers are looking to accelerate automation plans – although in many cases these are spurred by the challenges created by labour shortages and rising costs rather than environmental goals. Certainly, the eradication of paper based picking should be a priority for any site yet to make that move – alongside the removal of paper packing slips. With the right underpinning technology – including emailed receipts and online returns options – the process is more efficient, lower cost and greener.
Automation can also transform the efficient use of forklift trucks which transport goods miles around the warehouse. While trucks are, in the main, battery powered, inefficient technology combined with poor charging routines places huge demands for electricity on these sites, making it imperative to optimise every journey.
A Warehouse Management System (WMS) that includes task interleaving can minimise forklift empty journeys by routing the driver to both drop off and pick up pallets in one journey. In addition to radically improving efficiency and cutting the carbon footprint, the WMS can also match tasks to labour management to optimise battery charging within a shift and maximising the efficiency of each truck.
Additionally, embedding returns management into the WMS, with touchscreen scanning and validation, can also transform the speed with which returned goods are repatriated to the supply chain – cutting costs and, critically, minimising the amount of stock that is sent to landfill.
While there is certainly a great deal of innovation in the industry, it is nevertheless vital to address much of the in-built inefficiency across the retail supply chain.
Minimising the number of half full shipping containers – travelling in both directions – is a priority for the industry, as is improving customer education and awareness regarding greener delivery.
As on time delivery becomes more important than speed, it will be interesting to see whether retailers start to default to green delivery, compelling customers to request more environmentally friendly options.
It is within the warehouse, however, that the biggest changes are required and potentially the biggest gains to be made. While solar panels and recycled packaging are a good starting point, they are not an end destination. Retailers now have the opportunity to take a radical approach to warehouse automation as well, in the process moving ever closer to meeting targets for Net Zero.