Added value through sustainable logistics Ecology and economy in balance

Climate change is leaving ever more obvious traces worldwide. All the more reason for the topic of sustainability to dominate public discourse. Companies are faced with the challenge of making their logistics "greener" and minimizing their CO2 footprint so that this development is not taken even further to extremes. Increasingly sensitized customers and consumers also expect this. Globalization is also making a significant contribution to this.

In this article, we would like to focus on the measures that can be used to implement sustainable logistics in operational warehouse operations and in the transportation sector. Standard software such as SAP Transportation Management(SAP TM) and SAP Extended Warehouse Management(SAP EWM) play a not insignificant role here.

FAQ: Sustainability in logistics

Sustainability in logistics is associated with the aim of permanently reducing CO2 emissions that are harmful to the climate and the environment, avoiding the waste of resources and creating a balanced symbiosis of ecology and economy.

The greatest potential lies in the areas of procurement, warehouse logistics and transportation. Equally important are, for example, reducing waste and turning to recyclable consumables.

Automation and digitalization are key enablers for streamlining processes and designing them to be (energy) efficient. Superfluous activities and expenses are no longer incurred and resources are used in the exact quantities required.

What is the essence of sustainable logistics?

Climate change signals an explicit need for action. But there are also other reasons to switch to sustainability in logistics, such as the increasing energy shortage and lack of resources. But it's also about harmonizing ecology and economy in equal measure. In this context, it is important to take a holistic approach and include structures, systems and processes in the analysis. This starts with procurement and extends to warehousing and fleet management, right through to the last mile. The focus is therefore not only on warehouse organization, but also on improved route and tour planning from a sustainability perspective.

Generating sustainability - from procurement ...

Starting with procurement is already an important first step towards sustainability, with companies not only focusing on the product to be purchased. Instead, they should also examine the extent to which the production itself and the packaging make ecological sense. The shortest possible delivery routes and consolidated transportation also reduce environmentally harmful CO2 emissions.

... about warehouse logistics ...

In the area of warehouse logistics, consistent energy-saving measures and the responsible use of resources promise progress. This can primarily be achieved through automation in conjunction with a Warehouse Management System (WMS) , which efficiently controls all processes, eliminates unnecessary movements and reduces the waste of resources. Energy-efficient storage and retrieval machines (SRMs), which feed electricity that is no longer required back into the grid, are also an effective solution in this context. In addition, an A, B, C classification can be implemented, eliminating unnecessarily long distances in the warehouse. It is also not always necessary to operate a system at full load. It is sufficient to adjust the output to the daily demand . Last but not least, photovoltaic systems on the roof of a warehouse or logistics center help to save tons of CO2 and reduce costs in the long term - keyword(s): ecology and economy in balance.

... right through to transport management

The optimization of transport management is also an elementary lever when it comes to achieving green logistics goals. This is because long transports and empty runs are the main causes of climate-damaging CO2 emissions and are therefore in blatant contradiction to a sustainable corporate policy. This makes cleaner and more environmentally friendly vehicles, improved use of freight space and continuous route optimization through the use of state-of-the-art tracking software, which can also ensure a fuel-efficient driving style thanks to its analysis function, all the more important. The IGZ best practices for SAP TM help to minimize the ecological footprint. In transport management, for example, this is achieved through the best practice Extended Load Planning®. This includes permanent optimization and utilization of loading capacity, e.g. for trucks, rail wagons or air freight containers, as well as a dynamic loading and unloading sequence with corresponding route planning. In addition, an optimal distribution of the load on the vehicle axles promotes a resource-saving driving style.

Why are automation and digitalization important?

But what does standard software actually do in the context of sustainability? Let's take SAP Extended Warehouse Management (SAP EWM) and SAP Transportation Management (SAP TM) as an example. The integration of both solutions into the core of the strategically positioned Business Suite S/4 opens up completely new opportunities for continuous, holistic process optimization. The interaction can be briefly summarized as follows:

SAP ERP sends customer orders to SAP TM, which creates order-based transfer requirements and reports them to SAP ERP as outbound deliveries. This information is simultaneously reported to SAP EWM, which in turn triggers the warehouse activities associated with the transfer order, such as picking, packing and staging the goods. This is actually a simplified representation, but it shows how processes can be "streamlined" with software support.

Superfluous actions are avoided, the provision of resources follows actual demand, energy and operating costs are reduced. This is ensured in particular by intelligent algorithms that support continuous optimization in inbound and outbound processes. A further advantage, especially with SAP TM, is the ability to use integrated package and load space planning, so that trucks are utilized to the full and empty runs are reduced. Route optimization, which is also integrated, enables transport routes to be planned appropriately.

Conclusion and outlook

The possibilities outlined above for a more sustainable and at the same time more efficient design of infrastructures, systems and processes do not claim to be exhaustive. Nevertheless, it is possible to gain a fairly meaningful impression of the ways in which you can exploit promising potential and achieve added value in the short to medium term. Automation and digitalization not only promise the greatest benefits, but also actually deliver them.

The move towards climate-friendly, environmentally friendly and sustainable logistics is not only a must, but is also increasingly becoming a competitive factor. For example, a sharpened USP (Unique Selling Proposition) can be created, which helps to further improve a company's image. Last but not least, ecological approaches transferred to operations help to save costs in the long term. And so the circle closes.

Incidentally, SAP announced SAP Sustainability Footprint Management in September 2021, which can be used to calculate the carbon footprint of a product across the entire value chain. You can find more information on the SAP Sustainability Footprint Management info page from SAP. Just a little tip in passing. You can also find the most important reasons for green logistics in our article.