Sustainable F&B Logistics — The Warehousing Approach

Wednesday, September 20th, 2017

The concept of sustainability has been spreading throughout the industries in recent years, and the food and beverage industry is no different. What is meant by sustainability, and how can manufacturers benefit from incorporating sustainable practices into their businesses? By Pedro Furtado, deputy general manager and projects director, Efacec

To the average consumer, business sustainability in the F&B market may equate to actions taken against climate change and water scarcity. But there is more to how F&B manufacturers are fulfilling their green agendas. Interestingly enough, sustainability in the F&B industry can take the form of supply chain logistics network optimisation, through reducing environmental, waste, and business risk costs.‘Sustainability’—a word that is increasingly emphasised across global markets—has well nestled itself into corporate strategies of companies across all industries including beauty, pharmaceutical, logistics, and even food industries. One of the latest additions to business buzzwords, the concept of sustainability has firmly rooted itself in the minds of manufacturers and strategies of businesses worldwide. With sustainability continuing to make waves in the corporate world, more and more food & beverage (F&B) players are integrating green initiatives into their business practices.

The Essential Warehouse

In the F&B sector, the warehouse is an important component of efficient sustainable supply chains. In order to maximise warehouse operation efficiency, savvy F&B manufacturers today employ various forms of warehouse management systems (WMSs).

The essence of a WMS is based on its ability to connect stores and distribution centres with warehouses, as well as to coordinate shipping and ground transport. Information is collected across these multiple logistic points and then compiled into a centralised database that allows companies to track inventory movement. Additionally, the visibility of the WMS enables companies to maintain inventory control and uncover areas for improvement, which are of great importance to F&B manufacturers.

Not only are WMSs customisable to fit each manufacturer’s unique needs, these automated warehouses are also suitable for deep freeze projects, which are growing more popular in Asia so as to relieve their employees from working in cold room facilities for long periods, shared Jorge Manuel Couto, global business development director, Efacec.

Furthermore, F&B companies will find that automated warehousing offers various opportunities to reduce the environmental and social footprints of warehouse facilities in ways that, in fact, improve their businesses’ bottom line.

Sustainable Warehousing— A Three-Pronged Approach

When it comes to creating sustainable value, there are several practices that companies can implement in their warehouses. These include automating warehouse solutions and management processes, increasing energy efficiency within a warehouse, and optimising warehouse design.

Automating Warehouse Solutions & Management Processes

To complement WMSs in their warehousing processes, manufacturers can incorporate other automated solutions such as order picking technologies (e.g. pick-to-light technology, voice technology, sortation systems, etc.), barcoding, radio frequency identification (RFID), as well as automated storage and retrieval systems (ASRS) to achieve a sustainable warehousing system.

Automating the warehouse environment is a good first step for companies looking to improve operational efficiency and maximise productivity as manual warehousing operations can lead to inefficiencies, said Mr Couto. By automating these labour-intensive processes, companies can also achieve financial and business management sustainability benefits in the long run, as improved inventory visibility increases product accuracy and even influences customer satisfaction.

For example, F&B companies switching to barcoding or RFID technologies will likely see a reduction in paper consumption as they changeover to a largely digital approach—a simultaneous step towards environmental sustainability.

Also, automated warehouses often have a built-in redundancy for equipment breakdown and event mishaps. According to Mr Couto, this would help ensure warehouse continuity as manufacturers cannot afford production and distribution downtime.

Further, automated warehousing systems addresses the sensitive issue of food traceability for the F&B industry. In the event of a product recall, the WMS will be able to provide companies with necessary details for an efficient recall. Sustainable value is achieved as F&B companies see less wastage of resources, time, and energy when track-and-trace efforts can be performed with ease.

In a business arena fraught with stiff competition and ever-present threats to survival, the ASRS could potentially help F&B manufacturers cope with rising business pressures, increasing labour costs, intensified calls for safety, and the need for tighter security.

On top of more productive sorting and retrieving processes, the ASRS is particularly useful in minimising the warehouse footprint as it offers innovative storage solutions. Utilising vertical space within a warehouse, the ASRS is capable of handling and processing a higher volume of orders in a given period of time and space.

Increasing Energy Efficiency

Across industries and countries, warehouses have been known for their large energy footprint within entire logistics supply chains. However, automated warehousing solutions can lead to significant energy-savings as they can function both in darkness and non-heated environments.

This is a stark contrast to conventional warehouse equipment with their high-energy consumption levels and high operating costs. Unless specific food storage calls for otherwise, it is advisable for manufacturers to implement a ‘lights-out warehouse’ for day-to-day operations, as lights are generally required only during routine maintenance checks. Given that automated technologies such as stacker cranes can function independently without supervision, powering lights in the warehouse is an unnecessary form of expenditure.

The process of transporting pallets of food inventory from the warehouse to a distribution centre also presents an energy-saving opportunity for F&B manufacturers. Manufacturers can opt to consolidate deliveries and share transportation with other suppliers, so that delivery costs are split among companies replenishing sale inventories at the same time, thereby increasing trucking sustainability efforts.

Warehouses that integrate green warehousing practices such as daylighting technology (e.g. skylights, photocell sensors, etc.) can save energy costs for companies in the long run. Some methods that can be used include fitting warehouses with solar panels or light-emitting diode (LED) lighting, regenerating power by converting braking forces on automated equipment into electricity, and recovering heat that is generated from cold storage systems.

Other methods include switching to natural ventilation instead of electrically-run ventilation, and even adjusting the speed of conveyors and palletisers, so that these equipment can run at a slower pace (or be turned off) when left unused.

In implementing energy-efficient warehousing measures, more than 20 percent of cost savings can be achieved. F&B manufacturers that adopt green warehousing practices can then work towards building a financially and environmentally sustainable business.

Optimising Warehouse Design

Careful planning of the warehouse layout is crucial for companies to maximise current workflow efficiency, not only to remove unnecessary steps within the warehousing process, but also to ensure the ease of integrating new functions in the future.

Companies should aim to maximise their cube-wise space—meaning all length, width, and height—to fully optimise the warehouse for efficient material handling, order picking and storage processes, personnel movement, and equipment handling (e.g. automated guided vehicles). Inefficient use of warehouse space can lead to excess utility, unnecessary labour costs, and lower asset utilisation.

When constructing the layout, companies should collect operation data on actual facility throughput and information on warehouse structure requirements, such as loading and levelness, precision data on floor flatness, and even weather information, because it relates to possible impact on warehouse structure durability. For temperature-sensitive food inventory, manufacturers also need to consider temperature-controlled warehousing and temperature monitoring technologies to ensure food safety. By incorporating these factors into the warehouse design, companies can then increase warehouse productivity and safeguard food integrity.

First Steps Towards Warehouse Sustainability

While it is clear that F&B companies stand to enjoy cost-savings and environmental benefits by incorporating sustainable warehousing technologies, it must be said that sustainability needs to be strategically managed and undergirded by top management’s support for real change to happen.

As the F&B industry and its warehousing requirements continue to evolve, the three approaches highlighted above can be employed by companies to increase the positive effects of their business activities on the environment. And as a significant component in supply chains worldwide, the warehouse can also be a competitive asset for F&B businesses as they reduce their overall carbon footprint, refining their competitive edge in an increasingly environmentally-conscious market.

With more and more manufacturers implementing sustainable practices within their business operations, it has become and will definitely be a necessary paradigm shift for companies to achieve business success in the long run, said Mr Couto.