Making IT green

Making IT green    Continuous improvement can only be accomplished with continuous measurement and reporting. In the absence of this information, it is impossible to do more than guess as to the level of progress achieved and what remains to be accomplished.
   In the case of environmental sustainability initiatives, companies need to understand the impact their operations have on the environment and where they can reduce it in order to make progress. Having the right technology is critical, but ' as American Shipper's findings illustrate ' effective technology and the necessary return on investment (ROI) are not out of reach for most shippers and 3PLs. It is the reporting that remains elusive.
   In January American Shipper benchmarked roughly 200 transportation buyers including manufacturers, retailers and third-party logistics providers on their environmental sustainability plans, policies, investments and more. Our study ' available for free ' illustrates the state of this developing supply chain issue and the emerging best practices being defined by industry leaders.
   Freight transportation buyers, particularly those defined as 'leaders' in our study, expect environmental sustainability programs to provide a tangible ROI, or at least have no impact on costs. However 'lack of ROI,' with 29 percent of the tally, was cited as the largest inhibitor to adopting environmental sustainability supply chain practices.
   Seventy-nine percent of survey respondents will make investments in environmental sustainability this year (including but not limited to systems and hardware) to reduce and measure environmental impact. Notably 15 percent of respondents plan to spend a half-million dollars or more in this area.
   Roughly half of study respondents are investing in technology specifically for the purposes of managing and improving their environmental sustainability initiatives. This is key, because sustainability initiatives ' particularly those taken on by companies with large, complex supply chains ' will only be as successful as the technology allows them. These respondents employing technology for the sake of diminishing their environmental impact were asked to define what 'green' functionality they were employing.
   Optimization functionalities allowing shippers to get the most from each dollar they spend on transportation services are also the most popular in terms of mitigating environmental impacts. The fuel element of transportation makes it relatively easy for companies to see, or expect, a return from 'greening' their supply chains. Optimizing the configuration, route and mode of each shipment will cut carbon emissions as well as transportation spend.
These two goals go hand in hand in many cases.
   Across the board 3PLs have more 'green' functionality than any other industry surveyed and for good reason. Optimizing the supply chain on behalf of their clients is their core value proposition. What's more interesting here is the opportunity that 3PLs have to facilitate the 'greening' of the supply chain. Our study projects that reducing environmental impact will eventually be expected of logistics service providers, but at this point in time it is a differentiator or in some cases a service unto itself. This new revenue opportunity could present a sizable ROI.
   Some of these specific results just make good sense. Manufacturers, which are huge energy consumers, are ahead of the game in energy efficiency. Retailers, professional cost-cutters in their own right, are shifting modes to save transportation costs and reduce carbon emission in the process. What's troubling is the lack of attention paid to reporting functionality. As stated above, companies can't improve what they can't see.
   Shippers and 3PLs should look at their supply chain optimization tools as the first step in 'greening' their operations. The ROI is already clearly defined. The next challenge will be developing accurate and meaningful reporting functionality that supports continuous improvement while delivering that return. 3PLs appear to be ahead of the curve in this respect, but much work remains for everyone involved.