How data is playing a key role in reducing supply chain emissions

How data is playing a key role in reducing supply chain emissions ...

Global governments have become a major focus on combating climate change, and the industry is feeling the pressure. When it comes to sustainability, companies cannot afford to sit on the sidelines when it comes to dealing with climate change. Indeed, environmental, social, and corporate governance (ESG) is no longer a cost center but a business imperative.

Supply chains are the key to reducing climate change, as the emissions they generate are equivalent to those of the rest of the traditional organization. Accenture research claims that supply chains represent 60% of global carbon emissions.

This figure is likely to be understated due to the difficulty of measuring Scope 3 emissions, particularly those generated indirectly up and downstream in the value chain. Transparency is the real issue here, as businesses lack knowledge on their own ripple effects.

Based on a recent rise in signatories, such as ship giants Maersk and Ocean Infinity, and resulting in a 600% rise in signatories, we can thankfully see change in attitudes even within the logistics industry. A Canadian National Inventory Report revealed that freight transport emissions have increased by 154% since 1990.

What are the chances that they can make good on their promises? Companies are increasing their use of data, and they are increasing their ability to reduce emissions and comply with industry and regulatory standards. Every day, new data use cases rise, urging industry leaders to debate how their data can be used better.

Extrapolating datasets in order to reduce carbon footprints

Condition monitoring data is a fascinating illustration of local datasets that have a broad potential. Typically, IoT devices track package conditions and send them to logistics teams and stakeholders in the supply chain.

At first glance, this information seems to be only useful on a local and package-specific level. However, data extrapolation is delivering a significant effect. Stakeholders are using freight condition data to draw conclusions about vendor performance and reveal route-related shortcomings.

Packages that arrive in line with acceptable conditions may be problematic with route planning guidelines. Customs sheds and storage facilities along the route may be inadequate. Excessive traffic might be sabotaging storage conditions and increasing emissions, according to a deeper pattern analysis. Alternatively, the shortest route may involve emission-heavy modes of transportation or storage facilities that generate excessive energy.

Especially given the persistent bottlenecks, supply chain predictability is becoming increasingly important by the day, according to Niko Polvinen, the CEO of Logmore, a condition-monitoring solution provider. Shipment location and condition data demonstrate how efficient each step of the supply chain is. Not only can you monitor package-level data, but you can also draw conclusions about vendor service quality and route efficiency.

Condition-related information is effective in reducing a company''s supply chain footprint when it comes to goods delivered in an unacceptable state, or that is stuck in transit for weeks on end, reducing your carbon footprint. Polvinen claims that condition monitoring data can help you reduce costs while also decreasing your emissions.

Companies can make unconventional conclusions about the environment of their emissions by employing creativity. However, supply chain companies are paying close attention to data. While governments are getting involved, they are also getting in on the act.

Speeding up emission curbing goals

Governments are awakening to the power of data analysis to reduce emissions. The Dutch government has mandated that logistics companies of a certain size share their data with a national database. The aim is to assist stakeholders in developing emissions-related knowledge and to leverage data for further analysis.

A Dutch court recently ordered Shell to speed its emission limits with transparency. As data analysis techniques become more powerful, the court said that original timelines should be revised.

Either data analysis or data analysis have implications on carbon trading markets. These markets are assisting companies in purchasing the appropriate amount of credits to compensate their emissions owing to improved data governance strategies and design.

According to a research conducted by the European Union''s Proceedings of the National Academy of Sciences, the EU''s emission TRading System (ETS) reduced 1.2 billion tons of CO2 between 2008 and 2016 (3.8%), relative to a world without carbon markets. This percentage is half of what EU governments promised to reduce under their Kyoto Protocol commitments.

Better operations, practical and artificial

Data is improving the use of technology that promises to disrupt the supply chain. Increasing use of smart vehicles has forced supply chain firms to explore self-driving trucks and employ tactics such as platooning. Autonomous trucks can follow each other closely for long periods, thus increasing drag and fuel consumption, basically forming a platoon.

These tactics, according to USPS and TuSimple, resulted in a 13% increase in gasoline consumption over 160,000 miles in Arizona. This is an unheard of spike in savings.

Greenifying fuels is also a major focus area for suppliers. While full electrification is at least a decade away, the increase of alternative fossil fuels, such as green methanol, has indicated the impact Maersk has had on the industry. Maersk currently operates 12 vessels on green methanol, drastically reducing emissions.

Producers of synthetic materials are beginning to capitalize by slowly switching to renewable-source materials such as eMethanol, promising competitively offering greener products. According to Ingolfur Gumundsson, such measures enable producers to achieve significant environmental and economic gains compared to costs.

AI can potentially reduce emissions by 2.4 tonnes (2.65 tons) of global annual CO2 equivalent emissions by 2030. For the sake of scale, this number is equal to the projected combined emissions of Australia, Canada, and Japan in the same year.

The most effective strategy is to use AI to help with analytics blind spots, such as Scope 3, and designing an emissions baseline. It will require significant investment. However, the cost savings from reduced emissions should mitigate any concerns it might have. AI can also demystify sources of emissions created by the decentralized nature of most corporate supply chains.

These findings, which are data-backed, will increase collaboration amongst industry peers, which is critical to achieving sustainable change.

Data is leading to a green future

Every advance the supply chain industry is seeing, according to data. Soren Skou, the CEO of Maersk, is aware of the depth of the challenge and reflects his supply chain partners.

To boost the massive increase in green energy, we must take action right now. If we are intended to see this decade, we cannot afford to wait, and in that context, we are looking forward to joining The Climate Promise, a forum to discuss key issues and solutions.

Ralph Tkatchuk is the owner of TK DataSec Consultancy.

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