Supply Chain Performance

Quick guide to start improving the efficiency and sustainability of your warehousing operations in asia-pacific

Sustainability is necessary to meet consumers’expectations, to save costs...Read our guide to get an efficient and sustainable warehouse.

On October 23, 2020

Sustainability is no longer an option, whatever your business. Whether it is to meet consumers’ expectations or for cost-saving purposes or efficiency goals, retailers and e-commerce players are moving towards greener operations. What is the current state of play? How can you get started with a sustainability project? How can you get a more efficient and sustainable warehouse ?

1) Warehousing efficiency and sustainability: a rising topic in APAC markets

Climate change, carbon footprint, energy loss, and environment-friendly operations. There are many angles to consider when it comes to sustainability. Warehouses are now being designed and operated to offer greener options to retail and e-commerce companies.

In Asia, most retail, e-commerce and FMCG brands are starting to modify their supply chain operations to meet sustainability requirements. Consumer behaviors can play a significant role in some markets. In others, real-estate developers lead the change. It is the case for example, in Thailand which became the first Asian country to receive the EDGE certification rewarding green buildings in 2018.

Where should supply chain and logistics directors start their journey when it comes to efficiency and sustainability?
In APAC, most warehousing operations rely on traditional processes, especially in emerging economies. Moving to paperless processes is thus an excellent first step toward more efficiency and sustainability.

In a warehouse, paper is indeed usually the most manageable waste to reduce. Companies can move smoothly from using paper picking-lists to barcode scanning handguns. Another option can be an integrated Warehouse Management Systems (WMS). While it’s not the most high-tech or AI centered system, it is already a big step for the environment and global business productivity.

Optimizing traditional or manual processes can also get you closer to a more efficient and sustainable supply chain. You can improve many areas from your space’s organization in the warehouse to the picking flow of operators, storage densification, and shipping systems. The more efficient your warehousing system and organization are, the more productive and sustainable warehouse become. Efficiency and good organization can help avoid unnecessary waste, minimize the energy needed (AC or heater), and limit shipping and packaging volumes.

To start with your logistics optimization, get our 8 tips for a better box picking system or 5 ideas to boost your order fulfillment accuracy.

2) Countless opportunities for an efficient and sustainable warehouse

Sustainability and efficiency work together. In a warehouse, moving to sustainable operations can drive better productivity and profitability while respecting and protecting the environment. A win-win move. But how to get started?

Building efficiency, the key to reducing energy costs
Energy and building maintenance are part of the most prominent retail or e-commerce logistic operations budget items. Efficient insulation of the building can save up to 40%¹ of energy spending and significantly improve carbon footprint.

Having a say in the building construction or moving to a greener warehouse is not necessarily immediately possible for each and every logistic director. Some simple changes in day-to-day operations can have a significant impact on energy consumption:

Using last-generation LED bulbs vs. standard lighting. It can reduce electricity consumption by up to 65%² (50%³ on average). Also, fluorescent lighting takes the cost-saving up to 80%⁴;

Investing in presence detectors to switch on-off the light can lower it by further 30%2.

Increasing the air-conditioners temperature by only 2 degrees. It doesn’t necessarily change much for people in office areas but has a colossal influence on the energy cost and global warming;

Optimizing storage for better air circulation. It lowers the energy needed to heat or cool down the room.

High-Quality operations for efficiency and waste reduction
Optimizing your warehouse processes helps you get more productive, saves money and time, and reduces waste.

To achieve high-quality warehousing operations:

Start by including your on-site employees to solutions brainstorming and ask them for feedback. They have the knowledge and experience to point out inconsistencies in existing processes.

Implement random quality checks for better order accuracy and client satisfaction.

Track your KPIs in real-time to immediately course-correct any error.

Find ways to reduce packaging. For example, use the appropriate box size to ship items and avoid double or triple wrapping. It will increase the space available in your boxes, containers, and trucks.

Get tips for better piece-picking accuracy : 5 Powerful Ways To Master Picking Accuracy And Boost Customer Sastisfaction

Solar energy to go further
If you want to raise your sustainable game, solar panels are a fantastic solution for a cost-saving strategy. The electricity created can save a significant part (if not all) of your energy costs. It also reduces C02 emissions by hundreds of tons and enhances your carbon footprint. With solar energy, you can lower energy expenses, while becoming energy self-sufficient and protecting the environment.

Still, investing in solar power requires in-depth study and ROI assessment. Here are a few tips to prioritize:

Implement more affordable, sustainable initiatives first. Then, evaluate their outcomes before installing solar panels. It could be sufficient to reach your short term energy efficiency goals;

Assess if your roof or land is suitable for solar panels installation before taking the direction of going solar;

Whether you own or rent your warehouse will also definitely change your financing choice. Opting for third-party-owned solar systems can for instance help to reduce costs by buying the energy created at a flat rate and limiting the investment needed.

A solar panel contractor will help you estimate the feasibility and projected ROI of such a project.

3) Our vision for a more sustainable supply-chain

Retail and e-commerce activities are shifting towards greener and always more efficient systems. As e-commerce and pure players grow, they drive the change for upgraded operations standards to please consumers’ requirements.

Buyers expect ultra-fast and accurate delivery in recycled packaging from carbon-neutral companies. Whether B2B or B2C, customers, and consumers increasingly look for brands that align with their values. This is especially true in some industries such as Beauty and Cosmetics or Hygiene & Personal Care. Sustainability, ecology, environment-friendly are already mainstream attributes of brands in the minds of consumers.

Any retailer or e-merchant now needs to live up to those new expectations. They have become a matter of survival. This movement opens vast areas of improvement for warehouse designers, builders, and operators to improve efficiency, customer service quality, and sustainability in the years to come.

¹ Saveenergyquote.com
² Observed data in our own sustainable warehouses in Vietnam.
³ Smartenergy.arch.uiuc.edu
⁴ Exceed-consulting.com