Using Data Analytics to Elevate the Success of Supply Chain Sustainability Initiatives

As supply chains continue to recover from the impact of the COVID-19 pandemic, a growing number of pre-pandemic trends are reemerging. One example is the renewed interest and activity around supply chain sustainability.

In a recent survey of DHL Supply Chain carriers, nearly 60% said sustainability is a key element of their strategic plan and another 31% said sustainability is important and gaining attention. More impressive, nearly two-thirds said their company is investing in sustainability because it is the right thing to do, even if there isn’t a financial return.

There are three factors helping put increased focus on sustainability in many business discussions and decisions. The first factor is growing consumer expectation that environmental sustainability must be a core business commitment. The second factor is the impact the supply chains can have on company sustainability initiatives. Finally, the technologies, tools and resources designed to help companies achieve sustainability success have continued to evolve. A prime example of this is the evolving role of data analytics in helping companies achieve supply chain sustainability objectives.

Data Analytics and Sustainability

As the digitalization of the supply chain brings increased connectivity, new opportunities in analytics are being created or identified for logistics and supply chain managers to collect and analyze.

The challenge is no longer gathering the data—there are plenty of tools available for that—but rather identifying, prioritizing and acting on the data to deliver measurable, obtainable business goals and value. Most companies are barely scratching the surface when it comes to the business value that can be achieved through establishing data analytics processes, especially regarding sustainability initiatives.

This is where partnering with a third-party logistics (3PL) provider that shares a commitment to sustainability and has invested in data analytics tools and digitalization can help.

Such a 3PL can collect and analyze data on a wide range of sustainability-related factors across the entire supply chain, as well as benchmark and leverage data from multiple sources and industries. The right 3PL partner can also harness the power of predictive analytics and machine learning, as well as develop new algorithms to uncover new data sets and insights.

Tangible ROI and Value

For instance, one of the ways DHL Supply Chain is bringing additional success to supply chain sustainability initiatives is by using the EPA’s SmartWay program to help logistics and supply chain managers prioritize efficiency in their carrier choices.

SmartWay provides a comprehensive and well-recognized system for tracking, documenting and sharing information about fuel use and freight emissions across supply chains. By ranking carriers on their emissions and environmental impact, the program helps companies identify and select more efficient freight carriers, transport modes, equipment and operational strategies to improve supply chain sustainability and lower costs from goods movement.

Not only does DHL Supply Chain provide internal emissions tracking data to Smartway, but we also have developed and use proprietary algorithms using SmartWay data to drive more freight to better performing carriers. We can run scenarios for our customers to show them how much it would cost – and how much CO2 they’d save – to transition to a more eco-friendly carrier.

We also bring in other criteria, like diverse-owned or woman-owned carriers. So, for example, if a customer wants to see what it would look like to move to a diverse-owned carrier with better emissions performance, we can run predictive scenarios and provide the data they need to make a decision. We can also track actual performance of that decision over time using our TMS and proprietary analytics tools.

A Holistic Sustainability Partner

Whether by tracking the wrong data, not having enough data, or simply not understanding how to effectively utilize the data, many logistics and supply chain managers are missing vital opportunities to increase supply chain sustainability. However, data analytics is just one piece of the puzzle when it comes to greater supply chain sustainability.

A 2019 report from the CDP, an international nonprofit that promotes environmental disclosures, found that supply chains create more than five times as much greenhouse gas emissions as a company’s own operation.

At DHL Supply Chain, we have the expertise to sustainably optimize our customers’ supply chains through solutions design, efficient warehouse management, and optimal transportation networks, minimizing both cost and the environmental footprint. This includes our Transport Network Optimizer, which is a one-of-a-kind planning tool that can maximize transport utilization and reduce greenhouse gas emissions. The tool does this by using data analytics to create larger, more efficient full truck load shipments and identifying and right-sizing dedicated fleet and drivers and reducing empty miles.

Additionally, our proprietary Carton Optimization tool reduces waste and minimizes empty space from eCommerce packaging by allowing customers to select the appropriate box mix for each location. We also maximize efficiency and utilize green solutions within the four walls of the warehouse, including through a fully electric MHE fleet and smart lighting solutions, and we design streamlined networks for our customers to give them the optimal number of facilities and the right inventory across the network.

Partnering with a 3PL that utilizes smart analytics techniques to collect and organize data to provide actionable business insights enables companies to better identify those opportunities and rapidly reduce greenhouse gas emissions throughout the entire supply chain journey.

To learn how DHL Supply Chain can help you sustainably optimize your supply chain, visit:

http://app.supplychain.dhl.com/e/er?s=1897772577&lid=9044.

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