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Warehouse planning is critical in 2023 in a complicated sustainable environment
By Michael Ochi, sustainability and technology leader at QAD Inc.
By now we’ve all seen slogans shared by large corporations, from Walmart to Boeing about Earth Day or sustainability. Executives may be discussing how COP26 and the US Supreme Court’s EPA decision influence forecasts for 2023 and beyond. But how will sustainability impact areas that typically escape media scrutiny, like the warehouses that store and distribute materials behind the scenes of public consumption?
It is obvious that there is no one-size-fits-all operational blueprint for improving warehouse sustainability metrics. The good news is that the strategies and tools are more accessible than one might imagine. So where do warehouses and sustainability intersect, and what are the tools that you can use to plan for business transformation in the upcoming year? Here are five tools for warehouse planning in today’s complicated sustainable environment.
Tool 1: Change Management
First, it’s important to enter a growth mindset. Any change has potential to be met with resistance, so leadership should recognize that sustainability is as lush with potential as it is with politics. Rather than dancing around ideological differences, focus on the common-sense business benefits of eliminating waste: this is an opportunity to foster sustainable growth (applying the longevity and environmental definitions of the word). As with any change management process, when senior management embraces and amplifies sustainability, the entire effort becomes smoother.
Tool 2: Measurement Standards
Your results will be best when they are aligned with how sustainability is measured. Global organizations such as CDP, GRI and ISSB provide extensive content on measuring climate and environmental, social, and governance (ESG) impacts. A traditional warehouse, excluding up/downstream manufacturing and transportation, will have the most direct control over their indirect emissions. This is the energy purchased to keep lights on, run HVAC, charge forklifts, power movement systems (conveyors, sorters, AGVs, ASRS), and feed the orchestrating technology systems. Adding or shifting to an on-site renewable energy source, like solar, can drastically reduce everyday grid consumption while also shielding your organization from price fluctuations and external infrastructure failures. This would reflect positively in reporting emissions and addressing risk.
Tool 3: Data Culture
Data is foundational to any measurement and improvement (sustainability included). It gives you knowledge about what the current state is, where waste is, and what projects will give you the best ROI. Data is most powerful when it is accurate, real-time, and accessible. Software-as-a-Service (SaaS) solutions are key to achieving this. The right vendors provide fit for today and tomorrow through adaptable applications, enabling you to stay up-to-date with advanced technology so you can focus on your core business. Many warehouses, especially proprietary ones, can see significant reductions in stock levels and rush jobs when the systems periphery to the WMS/WES are modernized. Investments in supplier relationship management, demand and supply chain planning, ERP, asset management, EDI, digital commerce, and customer relationship management all contribute to better planning and collaboration. This creates a virtuous chain of events leading to less inventory, less warehouse space utilization, less internal travel, and ultimately less energy use. Shifting these solutions to the Cloud accomplishes more than just moving indirect emissions to value chain emissions. Public cloud providers have significantly higher cost and publicity concerns over energy consumption, and therefore are highly motivated to achieve carbon-neutrality in data centers while providing scalable, 24×7 coverage.
Tool 4: Lean Continuous Improvement
When data leads you to waste, lean and continuous improvement principles help you remove it. Here is a practical example of merging data with lean to improve sustainability:
- Data: Cloud SaaS solutions tell you what the high-volume movers are
- Lean Improvement: Create rules to put those parts in fast access zones
- Benefit: Total putaway and pick movement is minimized, reducing energy consumption and pick times
Adding to Lean’s 5S alliteration, sustainability has 4Rs. Reduce, reuse, recycle and rethink (the fourth R is debated, I like rethink in this context). Consider reducing value chain emissions by evolving packaging materials to be multi-use and returnable. The automotive industry has proven that returnable packaging can create real ROI in addition to supporting carbon neutrality goals. (Tip: if you don’t have a lean six-sigma expert, consider contacting a local university that has an industrial engineering (IE) program. Many of them welcome project-based learning and will provide student-led consultation in exchange for tours and short-term mentoring.)
Tool 5: Automation
Warehousing automation facilitates environmental and business improvements by optimizing operations. The ROI that this technology can deliver makes it accessible to warehouses of all sizes. An advanced warehouse automation provider can equip you with algorithm-directed robots that retrieve goods via the fastest and most efficient path, in waves that consolidate orders to minimize trips. Augmenting an inventory handler with robotic pickers can increase rates from 50 to 350 units per hour. Robots also facilitate no-or-low light movement through taller and more narrow aisles. This gives you the best chance of avoiding one of the most challenging and environmentally detrimental possibilities of growing your business: procuring an offsite warehouse. The number of business hurdles that offsite warehouses present is too long to list, and the truck runs between buildings automatically increase your average emissions per order. Bottom line: adding automation to your warehouse can deliver serious efficiency gains while minimizing your footprint.
Conclusion
Sustainability isn’t going away. As consumer and investor behavior changes, supply chains will be scrutinized more closely – down to warehouse operations. Therefore, warehouse planning needs to consider the implications of sustainability and increased pressure to disclose environmental impacts. Fortunately, a common-sense approach to waste reduction can improve the environment and your bottom line. Warehouse and logistics companies that get ahead also have an opportunity to protect and add revenue. Your direct and indirect emissions are value chain emissions for other organizations. Being able to quickly disclose your impacts with audit-ready data increases your value and strengthens connections with suppliers and customers who are scrambling to account for theirs. Prevention is always easier than recovery; the time to protect your business and the environment is now. Make the commitment that 2023 will be the year.
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ABOUT THE AUTHOR
Michael Ochi is the Senior Manager, Sustainability and Digital Manufacturing for QAD. He creates sustainable growth in industry with his passion for using technology to benefit people, planet, and profit. Michael leverages his background in consulting, management and engineering to deliver pragmatic solutions that satisfy the top floor and shop floor. His B.S. and M.S. in Industrial Engineering were earned in the learn-by-doing atmosphere at Cal Poly SLO. When he isn’t driving sustainability in manufacturing and supply chains, Michael is exploring the world through a hike or a book with his wife and two sons.
