Industry
Manufacturing
Future-Ready Manufacturing: Partnering in your journey to a sustainable manufacturing enterprise
Highlights
- Freight transportation and warehousing are significant contributors to greenhouse gas. It is thus imperative for manufacturers to keep a tab on their supply chain emissions for sustainable operations.
- The challenge for manufacturers is to monitor Scope 3 emissions, which are indirect ones, and require granular data to be compliant with the regulatory requirements in the mature markets of the US and EU.
- Digital twin platforms for freight transportation and warehousing can create sustainable logistics operations which can benefit organizations in the long term.
On this page
The emission conundrum
Chief supply chain and sustainability officers are always concerned about their firm’s supply chain emissions.
Freight transportation and warehousing, which are important parts of the supply chain, contribute about 15% of the total greenhouse gas emissions (GHG). Both fall under Scope 1 (direct emissions) and Scope 3 (indirect emissions) and require granular data to comply with the regulatory requirements in the US and EU.
That puts executives in a spot of bother because collecting such data is difficult and thus becomes challenging to address the sustainability goals of an organization. Manufacturers have been leveraging multiple point solutions connected with their enterprise systems (both planning and execution systems) to monitor and report their emission compliance data. This is not effective and addresses only a small segment of the requirement.
Digital twin platforms can create sustainable logistics operations which can benefit firms in the long term. It bridges the gap between an enterprise’s planning and execution for sustainability, provides simulation capabilities to improve decision making, and improves data availability for compliance and regulatory purposes.
Managing the warehouses
Sustainable warehousing management and transportation can go a long way in creating sustainable logistics supply chain as shown in the figure below:
Figure 1: Emission data categories in manufacturing value chain as per ISO 14083
A warehousing yard is a busy area and a critical source of CO2 emission within a manufacturing warehouse or plant. Emissions produced due to idling of engines, waiting to be docked or moved from parking to drop and hook areas, contribute to Scope 1 emissions of an organization. Another source of emission is terminal tractors which haul the trailers around in the yard and move them from the loading and unloading docks. The figure below shows a conceptual view of physical and virtual representation of a system within a warehouse.
Figure 2: Yard management sustainability digital twin (for hub operations category)
Traditional yard management system performs linear planning based on existing enterprise data reported in the system. The dynamic situation at the yard demands a situational analysis of equipment positions and dock door scheduling. Digital twin is the perfect solution for such a complex system which can optimize resource utilization and CO2 emissions.
Yard management sustainability twin and its working methodology
Figure 3: Yard management sustainability model
This example demonstrates how a logistics process twin with focus on sustainability can not only help an organization deliver on its sustainability commitments but also improve operational excellence. This approach can be operationalized to deliver value to diverse types of yards and material movements.
Figure 4: Types of manufacturing warehouses and average carbon emission footprint
Transporting sustainably
Transportation feeds the warehouses with various goods and materials as well as moving the material out of the warehouse.
Efficient monitoring and management of GHG is a key to supply chain execution. Transportation produces both Scope 1 and Scope 3 emissions. Scope 1 involves emissions contributed by owned or leased fleet which can be directly managed by an organization. Scope 3 emissions are all the indirect ones caused by third-party carriers.
Traditional planning is a linear process which excludes any insights from execution. Digital twin works by bridging the gap between planning and execution of logistics by enabling a closed loop system.
There are three use cases based on which can construct a primary solution for transportation digital twin.
Figure 5: Select use cases for a transportation digital twin
Key scenarios under transportation use cases are as per the following.
Strategic network design feedback and realignment
Transportation digital twin has a unique position in supply chain as it not only looks at current situation through sensor data, but also has forward and backward visibility with historical data and artificial intelligence and machine learning (AI/ML) capability. The system can train the specific ML models based on similar occurrences in the past and actions. The models can provide sustainable prescriptive solutions for future planning.
Tactical capacity planning of network
This is historically based on near term forecasts and is prone to errors and variations. Digital twins can be used in the following scenarios:
- Taking decisions for asset alignment, for example drivers, tractors, and trailers in fleet management.
- Reviewing third party carrier contracts to ensure availability of capacity on specific lanes that can be planned based on constant feedback from virtual systems.
- Enabling real-time feedback loop from planned sustainability footprint and actual emission on the ground, thereby minimizing the delta.
- Getting real time feedback to drivers via onboard devices can help in better fuel management, which includes driving pattern, speed, and acceleration as well as optimal refueling stations resourced with sustainable gasoline supply.
Real-time operational alignment and risk mitigation actions
One of most important use case scenarios and benefit of digital twin in transportation is operational realignment through alerts, notifications, and operational insights. Digital twin’s real time visibility on the ground enables planners to realign transportation routes dynamically by communicating with drivers through mobile apps. Historically premium shipments generate significant amount of cost pressure as well as excessive CO2 footprint. This is a reason for variation between planned CO2e footprint and actual emissions. Dynamic routing of shipments to accommodate last-minute updates and expedite orders can help to reduce at least 2-3% of overall cost and emission in logistics.
A peek into the future
Manufacturers need a three-phased approach to attain carbon neutrality in the value chain: collect data, control emissions, and optimize operations.
A digital twin plays a vital role in implementing this approach. It can seamlessly combine different digital initiatives to break the organizational data silos and provide a real-time decision-making platform aligned with organizational imperatives. It can also monitor and manage operations to help organizations achieve their sustainability goals.
