Sustainability
Making global supply chains resilient with artificial intelligence
Over the past 20 months, global supply chains have been tested by unprecedented, widespread disruption. The global pandemic has led to border closures, lockdowns, production stops, plant closures, and disruptions all across the value chain. In spring 2021, the 20,000-TEU-container ship Ever Given ran aground in Egypt's Suez Canal, a major global maritime shipping channel. Lloyds estimated that the incident disrupted 12% of global trade and halted over $9 billion worth of trade each day. Natural disasters have further disrupted an already strained supply chain. It is now very apparent that to become more resilient, companies need to develop more sustainable business practices.
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It is imperative that companies adopt new practices in terms of greenhouse gas emissions, air quality, and environmental impacts, as well as those regarding labor practices and employee well-being, asset management, and supply chain operations.
Sustainability is gaining importance in global supply chains
According to a KPMG survey on sustainability reporting in 2020, the promotion of inclusive and sustainable economic growth combined with productive, full employment, and decent work for all are among the most important sustainability goals. This was the response of 72% of the 5,200 companies surveyed worldwide. Respondents also cited combating climate change and its impacts (63%), ensuring sustainable consumption and production patterns (58%), affordable and clean energy (50%) and industry innovation, and infrastructure (50%) as other key measures. It is therefore clear that sustainability is of increasing importance in global supply chains, and the impact can be particularly great when supported by cutting-edge technologies such as AI-powered digital decision-making.
AI helps achieve sustainability goals
Companies need resilient planning to make their operations more robust and efficient. In difficult times, this means building more buffers into schedules and planning for excess inventory to bridge bottlenecks created by disruptions. However, this comes at a significant cost and capital expense. By leveraging artificial intelligence, machine learning, and proprietary algorithms, companies can strengthen their resilience without compromising profitability and efficiency. These technologies enable improved decision-making and more agile operations, allowing companies to achieve their sustainability goals.
An effective sustainability initiative must consider many factors, from climate change and environmental issues to promoting more sustainable businesses and work environments that support the long-term profitability of the company and the well-being of its employees.
Government and global initiatives
Today, business models are shifting. Environmental responsibility is becoming a non-negotiable obligation for every company. It is imperative they adopt new technologies that range from reducing greenhouse gas emissions, improving air quality, and other environmental impacts to increasing employee well-being and optimizing supply chain operations. One way to achieve the latter is to introduce shorter and more localized supply chains. This helps to reduce risks and streamline logistics processes. The 17 Sustainable Development Goals (SDGs) of the United Nations (UN) reflect the role of companies as key partners in their implementation.
Sustainability through intelligent planning
For companies, the issue of sustainability goes far beyond the environment if they want to stay viable for decades to come. It includes, above all, how a company treats its employees, fosters human relationships with employees, customers, and business partners, and defines leadership. The right culture in which employees are given broad responsibility and the autonomy to be creative and solve problems empowers them and contributes to more sustainable operations. Key areas to consider for sustainability improvements include workforce and equipment planning, operational processes, CO2 emissions, and fuel consumption. AI-powered optimization software can play a pivotal role in all of these.
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It is clear that sustainability is of increasing importance in global supply chains, and the impact can be especially significant when supported by cutting-edge technologies like AI-powered digital decision-making.
Staff scheduling
AI-driven optimization software is an important tool for workforce planning and equipment allocation. For example, AI can be used to help planners automate the optimization of staffing and workload requirements. This significantly improves employee morale as scheduling software supports employee preferences in work scheduling.
Transportation logistics
Optimization software can be used to improve transportation logistics. It ensures that shipments are delivered to the right place at the right time, cargo is correctly packaged, and empty runs are minimized so that resources are optimally utilized. Supported by powerful planning algorithms, responses to unexpected events can be made promptly through the use of intelligent "what if" scenarios, optimized decision-making, and efficient resource management
Yard management
Digitization has a similarly positive impact on yard management. Optimized truck scheduling and more sustainable, intelligent time slot management can be achieved with digital yard processes. Better utilization of loading ramps and optimized, coordinated processes for vehicle entry and exit reduce congestion and waiting times. This helps to curb the size of the required fleet, reduce CO2 emissions from empty-run vehicles, and in general, increase the overall operational capacity of the yard.
Demand forecasting and production planning
Manufacturers seeking better demand forecasting and production planning can apply field-proven forecasting algorithms to create master production schedules that take all factors into account at the same time - from the procurement of raw material, production, and assembly to warehousing and distribution. By optimizing these processes through the use of a robust master plan, manufacturers reduce inventory, achieve faster lead times and production cycles, and avoid manual rescheduling - all of which reduce power consumption as well as unscheduled deliveries and the associated impacts of transport..
Finished Vehicle Logistics
Advanced technologies support automakers' new-car logistics sustainability goals in multiple operational areas, from network planning and inventory optimization to transportation and network management. By using software for vehicle logistics, manufacturers can optimize their distribution networks and daily operations at sea ports, train stations, and other transshipment hubs, while reducing their carbon footprint and operating costs.
Sustainable Aviation
Aviation also has ambitious goals when it comes to sustainability. To achieve them, it relies on intelligent optimization software, for example:
Read here how air traffic can become sustainable with the help of state-of-the-art technologies.