Published Wednesday 11th September 2019
Despite uncertain short-term outlooks, excitement is growing about the future of consumer spending, in the UK and across the world. From fast fashion to consumer electronics, the rate at which we buy and sell nowadays is almost unparalleled. With the number of people with disposable income set to rise over the coming decades, companies are positioning themselves to take advantage, now and in the future.
However, this has come at a cost, most notably for the planet. With sustainability now a key focus for governments and consumers, businesses have to consider the long-term implications of their procedures. In an increasingly competitive world, consumers expect excellent service but now with a sustainable drive, proven by results. By utilising the latest emerging technologies in logistics and distribution, companies can ensure their profits continue to increase long into the future.
Challenging Unsustainable Distribution Practices
Ultimately, if global climate change goals are to be reached, current supply chains for major businesses are not sustainable. The Paris Climate Agreement, signed by the UK Government, means that countries have to report and be accountable for their emissions. It is major companies and distributors that will eventually have to deliver these reductions.
Such an improvement in emissions as outlined by the Paris Agreement is no small feat. According to reports, per unit emissions for major consumer packaged goods distributors will have to be reduced by around 90% over the next few decades to meet targets. To continue growing sales whilst improving sustainability to such a degree highlights the size of the task ahead and the need for a radical solution.
Current distribution practices have not been helped, from a sustainability point of view, by the growth of e-commerce. The Amazon Effect has seen consumer expectations skyrocket, particularly for online goods but also for traditional retail. The modern consumer expects products to be delivered quickly, cheaply and conveniently, meaning the pressure on deliveries has drastically increased. These demands have led to environmentally poor deliveries, including those by HGVs less than 25% full.
Modern Technology for Supply Chain Optimisation
The truth is that many technologies are available that can help to overcome these current issues. Sustainability and efficiency often go hand-in-hand, meaning that the active uptake of emerging technologies can deliver not just environmental but also capital savings.
Artificial Intelligence is expected to create new interactions across the supply chain. More than anything, it is expected to produce much closer ties from production through to final distribution. By effectively sorting big data, companies can predict consumer demand, product availability and much more. Putting this information into the latest AI practices, such as deep reinforcement learning, businesses can make their delivery plans more accurate and efficient than ever before.
AI and similar technologies could also create a new age of shared responsibility in distribution. Collaborative shipping options are expected to increase over the next few years, as the industry strives to reach its climate goals. We already see early signs of this in last-mile delivery systems in the UK’s major cities.
Future-Proofing Your Supply Chain
AI is but one of many technologies that companies can utilise to deliver more sustainable supply chains. The internet of things, closely tied to AI, will provide faster and more accurate responses from minute parts of the distribution and production process. Meanwhile, blockchain is another hugely popular technology that will create increased accountability and reliability throughout the supply chain. Many of these technologies are now available for all major businesses. However, some supply chains remain stuck in previous routines and practices that could be further optimised.
With the effective uptake of relevant technologies, companies can meet sustainability goals whilst also reducing their overall expenses. Here at Expense Reduction Analysts, we’ve been helping major companies reduce distribution costs through effective supply chain management. Our experts can deliver savings in a range of cost areas, whilst also supporting businesses in their environmental ambitions. We have worked across a variety of industries; if you want to discover what we could do for you, get in contact today.