Green Logistics by IoT

Methods like this help supply chain management to achieve important objectives given that supply chains must above all be cost-effective and efficient. A new challenge has now appeared on the industry’s horizon: sustainability. We’re talking about green logistics, the aim of which is to make all of a company’s logistical processes as resource-saving and sustainable as possible, from shipping and buildings estate to marketing measures. Telekom, for instance, uses the “#GreenMagenta” label for especially sustainable products, services and initiatives. The terminal device cycle for smartphones is a good example. It takes back customers’ old phones and either refurbishes them for resale in compostable packaging or recycles the raw materials they contain. The German telco uses the label to draw the attention of customers and partners to projects that deliver ecological and social added value. Why should companies take up the issue of sustainability? There are many good reasons why.

Let’s start with climate protection. CO2 neutrality is an argument especially for companies that trade in emissions certificates. In addition, customers, partners and employees now attach great importance to a company caring about its ecological balance sheet. Seventy-one percent of German consumers prefer sustainable products as a matter of principle, according to a representative survey by product information management provider InRiver. Every other consumer is even prepared to accept a higher price if it is quite clear that a product consists of recycled materials. For listed companies the move to green logistics offers, in addition to emissions rights trading, the advantage that investors such as banks or stockholders now take a close look at how sustainably positioned a company and its value chains are.

The largest source of CO2 emissions is road transport. According to the 2018 Emissions in Logistics fact sheet of the German Logistics Association (BVL) three million German trucks released more than nine tonnes of carbon dioxide into the atmosphere. In stop-and-go traffic each truck’s CO2 emissions increase by a massive 108 percent. Other relevant factors are sea freight and logistics buildings. There is no shortage of improvement potential:

• Logistics companies can deploy vehicles of different sizes and with alternative drive technologies or renewable fuels.
• Planning can be targeted to optimize routes so that empty runs and partial loads are avoided.
• Environmentally friendly transportation modes such as rail can be given preference and driving style can be adapted to save fuel.
• A smart material flow in production and logistics locations built sustainably and operated in a climate-friendly way using renewable energy deliver further benefits.

But how do we make entire supply chains and logistics processes more efficient? This is where digital mobile information flow solutions come up trumps. Transport boxes, freight containers and trucks networked by a cloud platform on the Internet of Things (IoT) make all of the processes along a supply chain transparent and enable them to be tracked globally and in full. In addition, Sensors networked via the Internet monitor temperature, shocks or acceleration and report problems without delay. What if a delivery of strawberries has overturned due to an emergency braking procedure at the end of a traffic jam and can no longer be sold to the end customer? Even before the truck reaches the supermarket the smart IoT application reports the incident to all participants. The supplier checks whether he can provide an ad hoc replacement delivery so that supermarket customers don’t find the fruit shelves empty.

Supply chain managers have key procurement information at their fingertips on an IoT platform as structured data and almost in real time. Via interfaces the networked supply chains can be connected to other IT systems. When the freshly laden truck leaves the depot he supplier’s ERP system starts the invoice run automatically and the system expects payment within 14 days. Intralogistics also benefits from the Internet-etworked software systems (ERP, warehouse management, material flow computer, databases) and equipment (high-bay warehouse, pouch sorters). The collected data helps to provide an overview and to optimize goods receipt, storage and retrieval, order picking, goods issue or returns management. Goods fitted with trackers can be located in the warehouse with an accuracy of as little as one meter. Location and shelf height are known. If goods leave a defined area or are moved without authorization the system user receives a notification. The result is short and swift transportation and communication routes that save resources and energy. And logistics grows greener.

Industry 4.0 digital solutions can prove useful in making logistics more sustainable, say more than two out of three (69 percent) respondents in the Bitkom study on Digitizing Logistics. They believe that digital technologies help reduce CO2 emissions, make transport management sustainable and thereby protect the environment.