Page 63 - Linkline Yearbook 2016

THE SUSTAINAbLE SUPPLy CHAIN
IBy Graham Deane, COO – UrbanVolt
t is universally agreed that making and moving goods
is costly, requires significant labour and is highly carbon intensive. As supply chain managers we are cognisant of
the need to play our part in driving out as much inefficiency as possible from our supply networks?
Unfortunately, much of the inefficiency is perpetuated by a lack of joined-up thinking between the various participants in the supply chain.
This leads to decision-making where financial cost becomes the primary focus and energy usage or carbon efficiencies are very much a ‘nice to have’; or at the very least, secondary considerations. Freight forwarders are often put in a situation where their customers’ focus on cost reduces the choices of transport modes available to them.
In addition, assets such as aircraft and deep-sea vessels are controlled by air and shipping lines whose primary concern is asset utilization. So despite there being a will for improvement, sometimes the realities of competition and customer demand means that there isn’t always an immediately viable way to make the supply chain more sustainable.
Importantly, there is also a prevailing feeling of ‘I’m only one person or company’ what difference can I really make? In reality, it is the very person who asks themselves this self- defeating question, who is the most influential in creating a more sustainable supply chain.
If we take a 100,000 sq. ft. logistics/cross-dock facility as a simple example, that we are all familiar with, and ask ourselves what would be needed to make it energy neutral or carbon neutral?
lighting
Most facilities will run a minimum of 12 hours a day, with high bay lighting that consumes between 250w – 400w
per fixture. The example below shows how a 75% energy reduction and a corresponding 75% cost reduction is achievable overnight using LED lighting. In the case below, not only does the decision to implement an energy efficient program become sustainable, but it improves the bottom line dramatically.
battery storage
The current trajectory of battery storage technology means that it will soon be possible to utilize low cost off-peak electricity to charge batteries on site.It is estimated that incorporating a battery solution into the example above will add a further 15% reduction in overall energy consumption.
solar pV
This technology has improved significantly over the last few years and is close to reaching a point of becoming a financially viable option for self-generation of electricity. The advantage of a 100,000-sq./ft. facility is that it has 100,000 sq./ft. of roof space that is typically not used for anything. It is estimated that solar technology can generate up to 12% further reduction in energy costs.
onsite generator
While there is nothing new in having onsite generators to ensure continuity of operations, many of them are
considered redundant capacity or standby power.
While all of these technologies can provide considerable energy consumption reductions and cost savings, there is a
major hurdle to overcome and that is the capital investment required to implement them.
A combination of all four could cost well over €1m
in capital outlay, with payback taking between 3 years (lighting) and 20 years (Solar PV). Until now the onus has been placed on the consumer of energy to find and finance methods of conservation. While there are some financial incentives available, consumers must ultimately finance the implementations by means of collateralized loans, leasing, hire purchase or cash reserves.
Many companies find these financing options unacceptable because along with the straightforward cost there is also the opportunity cost of applying that capital to non-core projects; money is always better employed growing your core business.
There is however a new breed of business that leverage technology to create cost savings which they share with consumers. UrbanVolt is at the forefront of this new sector
in Ireland. Their business model is built on providing energy efficient technologies to their customers at no upfront cost, with savings shared between the customer and UrbanVolt for the duration of their agreement.
The reason that this is more attractive than traditional financing is that the financial risk is completely inverted and UrbanVolt carries all the risk of ongoing maintenance. Customers get to see the financial benefit of the energy savings within the first month of installation.
Leveraging technology to create savings allows individual logistics providers and forwarders the ability to drive sustainability into the sections of the supply chain they control, without the need for any capital outlay. Not only does this provide commercial differentiation for providers, it also has a very real positive impact on their local environment and their bottom lines.
The longest journey starts with but a single step... and the person who can have the greatest effect on creating a globally sustainable supply chain is you. More importantly, the time for action is now.
The CharTered InsTITuTe of LogIsTICs & TransporT 61
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