I found this article to be very informative.

I feel in a country like India, the infrastructure conditions pose an additional challenge to saving energy in supply chains.

Effective use of transport, proper mix of transport, planning, efficiency utilisation, and transport asset utilisation are additional important factors.

Scenario analysis, too, is insightful. In a few projects, we could realise substantial savings (on a perpetual basis) by eliminating to-and-fro movements from vendor to vendor.

A few large CPG companies are already seeing the financial benefits of achieving greater efficiency for assets—in particular increasing load size. P&G announced a 7 percent savings on its replenishment shipments, driven by using optimization to write orders that more completely fill up the truck. Under all oil cost scenarios, this represents a significant savings.

In India, most of the Industries are located in an Industrial zone/area, which is mostly outside the city limits. Each of the Industries has their own transportation contract and tries to club their consignment to achieve FTL. The problem is that sometimes they have to hold on to dispatches to wait for a FTL, thereby postponing their billing cycle by a day or two. In this case, they do not get advantage of pooling/clubbing the shipment, and they may not get a “fair price” for their contract, in other words, different companies in the same location for common destinations may be paying different prices.

To reduce Freight charges and conserve energy due to transportation, I propose that companies in industrial areas of India can form a common society and a common Internet portal where they can post (1) the destination of their current and future dispatch plans, and (2) the type of item to be shipped (Fragile, Metal, etc.) along with the urgency/required date of delivery. This information can be seen by all the Industries from that area.

This society should tie up with a transport provider. This data of daily and future dispatch should also be visible to that transport provider. There can also be a long-term contract with the transport provider to ensure fixed and fair prices for common destinations. Based on destination and type of consignment and urgency, the transporter will then plan a FTL which will collect the material from the target companies and deliver it to its destination.

This proposed practice will help to ensure the availability of transport means at a “fair fixed cost” for particular destinations. It will offer the advantage of combined volume of all the companies of that industrial area. It will reduce the impact of pollution in the environment and be more energy efficient.

In terms of risk identification and mitigation, the transporter with whom the contract is made must be informed about the type of material handled. Proper care must be taken by the transporter or if required, the company must train them. Also, companies must get prior commitments from transporters for the date of shipping of material to the destination. If the date does not match their requirement, alternate arrangements must be made.

Thank you for providing this overview and I appreciate the intereesting presentation. How would future models consider the aspect of fuel shifting? For example, electric delivery trucks are being developed and diverse companies, like Coca Cola and AT&T, are adding them to their fleets. These will simply plug into mains electric making the comparison (to fuel) economics relatively clear—unless there are major disruptions to fuel supplies (or the electric grid). Solar electric or photovoltaic (PV) products are experiencing a marked decrease in price and the number of wind farms is growing. Should these future electric vehicles and alternate electricity sources be included in your models?

Traditionally, transport has been seen as a tactical and/or operational issue and there are numerous examples of how companies have made changes of a tactical/operational nature that not only reduce the carbon footprint, but also improve the bottom line. Examples of such measures include the use of in-vehicle communications systems in order to avoid traffic congestion, educate drivers in ECO-driving, and improvements in the coordination and planning of shipments between facilities in order to improve the fill-rate of vehicles (cf. levers III-VI). A common denominator among these measures is that they all relate to changes that decrease the amount of CO2/tonne kilometre due to a decrease in overall fuel consumption. At the same time as companies have employed these types of changes, they have also been making strategic changes to their supply chains that in many cases counteract the benefit of these measures. A typical strategic supply chain change is that of deciding how the chain should be configured in terms of number and location of production sites and warehouses (cf. lever II). Decisions of this type determine the amount of tonne kilometres a supply chain generates. Over the last few decades, customers have been demanding shorter lead-times, smaller order quantities, more frequent deliveries, and narrower delivery windows. Simultaneously, companies have sought to find economies of scale in their production and as a consequence, production plants and warehouses have become more dispersed. This development has led to an overall increase in the amount of tonne kilometres generated by companies’ supply chains.

This illustrates how companies need to approach the issue of transport and the environment in a more holistic manner if they are to curb the problem of increasing CO2 emissions. There is a need to recognise that the carbon footprint of a supply chain is determined by decisions taken at all of these three levels. Companies need to understand how to connect changes that affect the amount of tonne kilometres with changes that affect CO2/tonne kilometre. There is also a need to be aware of, for example, how revised inventory levels or lead-time constraints affect a company’s opportunity to employ a less polluting transport solution. In other words, there is a need for an understanding of the trade-offs that exist between transport and other supply chain issues. A first step towards achieving this is to start measuring the carbon footprint of the supply chain. If you do not measure your performance, you will not be able to improve it! This is true, whether we approach the issue of carbon reduction or more traditional supply chain efficiency. Measuring the performance coupled with an understanding of the trade-offs that exist will, in my view, enable companies to configure supply chains that are sustainable in its true meaning.

This is a fascinating and useful framework. However, you seem to ignore three areas: 1. Specific challenges of where the informal and formal markets interface. 2. Impact and role of skills on performance and energy utilisation. 3. Potential impact of use of training technologies such as simulators on time to standard; reduction of accidents and poor usage and, corresponding use of energy. It would be so useful to extend the study into these areas, especially since we anticipate a demographic explosion to 2050 from 6 to 9 billion—mostly in the developing and emerging world and especially in the informal market.

We sponsor the NGO Transformational Logistics and we are looking at Simply Modal (manual distribution centres; shelf ready packaging; adapted bamboo bikes, among others) and, the impact of the mobile phone as a means to aggregate demand in rural areas or elsewhere. For example, Kerala fishermen using mobiles 30 kms out to sea. Impact includes: enhanced margin; reduced consumer price; increased retained earnings and maximised energy utilisation. Even more could be done on this.

Also, what about integrating some inclusive value chain thinking into the study? You highlight postponed manufacturing well. What about extending this into a better understanding of the rural/urban interface.

However, the main “heads ups” issue must be skills. This seems to be a blindspot, here. Look at countries like India and assess the impact that the sheer scale of the skills challenge will have on all your insights. Also, more needs to be done to use training technologies (simulators and mobile phones, for instance) to scale up and reach remote areas or even functionally illiterate communities. For example, look at ports worldwide and ask of the impact a lack of skills is having on sustainable growth. Lack of skills impacts the capacity to absorb aid and other inward investment funds; it impacts the potential for sustainable growth and the implementation of any of the policies you recommend. Finally, you explore product and packaging design but do not highlight the potential to shift design focus from 90% of designers designing for 10% of the population to a switch that could act as a major multiplier for your whole framework. I found this Report useful and challenging. The above points may add value to future iterations.