Greening the Supply Chain – How AI and Innovation Drive Sustainability.
As the world becomes increasingly aware of the impacts of climate change, businesses are finding new ways to mitigating them. This includes many supply chain operators that are looking to optimise their operations and make environmentally conscious choices.
AI and innovation play a significant role in driving sustainability initiatives for any organisation courageous enough to adopt it. By leveraging AI-powered platforms, companies can optimise their supply chain processes, improve energy efficiency, and enhance decision-making and problem-solving. AI can also enable advanced analytics to identify patterns and opportunities to reduce waste and support the adoption of new environmentally friendly technologies.
According to MIT’s latest State of Supply Chain Sustainability report, only 35% of global respondents report having net-zero goals, and within that minority, many appear ill-equipped to meet their self-imposed deadlines. However, by implementing innovative solutions in their supply chain operations, companies can overcome these challenges and achieve their sustainability goals.
“As an organisation, we have set ambitious sustainability goals to reduce our greenhouse gas emissions. To address these challenges, we have implemented innovative solutions in our supply chain operations, including upgrading our Material Handling Equipment fleet and exploring the adoption of renewable energy sources,” says Siyasanga Majola, Logistics Manager at Kimberly-Clark’s Epping Manufacturing facility in the city of Cape Town.
AI-powered algorithms can analyse transportation routes, optimise delivery schedules, and reduce empty returns. From a warehouse perspective, AI-powered algorithms can also analyse planned orders and stock levels to allocate resources effectively to minimise logistics costs for an organisation. Moreover, advanced analytics and machine learning can enable better demand forecasting and inventory management from an overall supply chain perspective, minimising waste and reducing overstocking.
Kimberly-Clark has leveraged AI-powered platforms in collaboration with its logistics partner to enhance the communication and coordination of raw material container deliveries into respective warehouses. This collaboration has resulted in a 40% reduction in transportation-related emissions and a 60% improvement in gate out containers to delivered at warehouse, leading to improved resource planning and coordination of inventory levels in real-time.
This transparency enables proactive decision-making, which minimizes disruptions, reduces excess inventory, and optimizes transportation-related emissions by ensuring that the right materials are called for at the right time. “While implementing AI and innovation in sustainability initiatives within the supply chain comes with its challenges, training and equipping teams to effectively utilise these new technologies is imperative to ensure seamless integration between different AI platforms and existing systems,” adds Majola. “By leveraging AI-powered algorithms, Kimberly-Clark has reduced logistics costs by 44% and aim to minimize waste by 15% through more efficient resource allocation, and inventory management.”
The adoption of AI is integral to companies looking to drive sustainable growth for years to come and contributing to a better future for all. As the world continues to grapple with the impacts of climate change, businesses must take bold steps to mitigate their environmental impact. Unlocking the full potential of AI and innovation in supply chain operations is one such step.