SupplyChainTalk: Mending a fragmented value chain with sustainable shipping

On 24 January 2024, SupplyChainTalk host Ana Maria Velica was joined by Nitin Murali, Vice President Supply Chain Excellence, E & J. Gallo Winery; and Niklas Reinedahl, General Manager North America, Einride.

 

Views on news

The prevailing approach to sustainability is still that of ticking the boxes. To make a real difference, the silos in addressing sustainability issues should get dismantled. An event such as the Sustainable Supply Chain Exhibition in Birmingham is a great forum for businesses to make a collaborative effort in this area. In sectors with fairly fragmented and traditional value chains, start-ups and SMEs play a very important role in driving innovation. Moreover, enterprises need strong use cases too to guide their technological investments. 

 

The edge that electrifying its fleet can give to a business
The high upfront costs of going electric explain the hesitancy of businesses to take the plunge. Although ideally investments into electrifications are incremental, commitment from leaders to making freight more sustainable must be permanent. Electrification has a business case for it too, as electricity can be distributed much more efficiently than either CNG (compressed natural gas) or diesel. In the past ten years, the price of batteries has plummeted too. But sustainability is not just about the electrification of fleets but includes the endeavour to create less waste, to optimise inventories and the commitment to lean manufacturing. Weighing out doesn’t seem to be a recurring problem with electric vehicles, and even if it is, exception management can solve the issue. 

AI in freight management can play an augmentative role and enable the factoring in of conditions that haven’t been considered before. Use cases include network optimisation, decision intelligence. Shippers network data can be integrated into an OEM’s digital platform and with the help of AI it can be established where the strongest case is for electrification. AI can also be leveraged to buy electricity on a dynamic market at the lowest possible cost. 

The panel’s advice

• First, run a pilot by electrifying a small segment of your operations to see whether it can work across the whole business.
• Sustainability must be embedded in all aspects of the organisation.
• Once you’ve invested in electrification, make sure you utilise your assets to the maximum. AI-driven solutions can help you with that.
• Your AI deployments must be use case based.