Sustainability concerns us all, but companies also have a social responsibility." With this thesis, Materialfluss editor-in-chief Martin Schrüfer got the participants at the Materialfluss Round Table at the Bader Hotel in Parsdorf in the mood for the topic.

The round table discussion featured Hartmut Braun, Head of Division Warehousing, PSI Logistics GmbH, Aschaffenburg; Björn Brunkow, Managing Director, Pierau Unternehmensberatung GmbH, Hamburg; Andreas Fleischer, Business Unit Director Northern Europe, Segro Germany GmbH, Düsseldorf; Bernd Langreder, Global Segment Manager Logistics & Sports, Forbo Siegling GmbH, Hanover; Dustin Schöder, In-house Consultant Surface and Contract Logistics, Hellmann Worldwide Logistics GmbH & Co. KG, Osnabrück.

How sustainable is your own company?

After a round of introductions, deputy editor-in-chief Susanne Frank gets straight into the topic and wants to know from the experts what design options there are for the concept of sustainability and first asks for examples of practical implementation in her own company.

The participants at the round table agree that there is still a lot of room for improvement when it comes to green logistics. Photo: Thilo Härdtlein

Bernd Langreder reports on "relatively extensive energy management" in his company. The graduate engineer from Forbo Siegling reveals that the company has been able to reduce its energy requirements by 25 percent over the last three to four years by optimizing its production processes and saving electricity and water. "We are a chemical company and process PVC and polyurethanes. Our efforts to achieve sustainability start with very simple things. For example, we try to produce our conveyor belts in the optimum width to avoid waste. That sounds simple, but it's not when you consider that production widths range from 10 millimetres to 4.5 meters. We survey the market and are constantly working on developing belts that we can manufacture in optimum production widths. At the same time, we are considering where we can manufacture these products optimally - in our production facilities in Japan, China, the USA, Brazil or Germany. The aim is to consciously move our energy management forward," says Langreder.

"Sustainability is a process efficiency issue in logistics," claims Dustin Schöder, Hellmann Worldwide Logistics. As a logistics service provider, we are faced with the task of sustainably managing the balancing act between socially necessary mobility and its environmentally friendly design. "Sustainability is a focus topic for us and is anchored in our corporate DNA," emphasizes the logistics specialist. "Sustainability is a broad field and for us it starts with carbon footprint measurement. Like every logistics service provider these days, we produce sustainability reports on an annual basis, where we basically disclose everything." In the area of transport/distribution, the company is already looking into alternative drive systems, Schöder reveals. The electromobility initiative is also part of this, even though - in his opinion - it is still a long way from being ready for use. Sustainability is also an issue in the area of contract logistics, Schöder continues. "In real estate, for example, alternative energy sources such as photovoltaics are standard. Our company headquarters in Osnabrück is heated with geothermal energy. Sustainability goes hand in hand with efficiency. With more efficient processes at the interfaces, where the aspects of the supply chain interlock, traffic can be avoided and logistics space can be better utilized."

"The topic of sustainability has reached people." Hartmut Braun, PSI Logistics

Hartmut Braun from PSI Logistics draws the line from logistics to the energy industry. His company is the market leader in software systems for this sector. The company itself has implemented the topic of sustainability in the construction of the new company building in Aschaffenburg. As Braun reports, combined heat and power units have been installed there for the energy supply, which make it possible to continue working even in the event of a power failure. In day-to-day business, the company tries to make business trips as energy-efficient as possible. "These may only be small things that ultimately only have a cumulative effect, but they are proof that the topic of sustainability has arrived at the company," Braun points out, steering the conversation towards IT.

"The objective of the software solutions developed by PSI is to optimize logistics processes. Starting with strategic network planning, through the planning of logistics locations and the planning of transport networks, this extends to intralogistics, with warehouse management systems and transport reduction in the warehouse." This is the indirect effect of the software in terms of sustainability and energy savings, says the IT graduate.

Björn Brunkow, Managing Director of Pierau Unternehmensberatung, agrees with the previous speaker and adds: "We are basically a manageable planning and consulting company and try to handle as many tasks as possible in-house. There are short distances, it saves us business trips and is effective. The sustainability concept is also reflected in our reduced paper consumption - we are increasingly working digitally. This is part of our everyday practice. The concept of sustainability also plays an important role in our planning. The expertise we are building up for our customers is to incorporate ecology into an efficient logistics system and to use smart IT systems that optimize the way orders are managed. These are the areas that we take care of. Not just the property, but the logistics center as a whole. A green conscience certainly requires an investment in one area or another when you consider energy-efficient systems with a service life of 10 to 15 years."

Andreas Fleischer, Segro Germany GmbH, makes it clear that as a real estate service provider, he does not have a fleet of trucks that could save CO2. "We are limited to a certain extent at this point. For me, it's more a question of what makes sense, what is effective? If a customer says I need you, then I'll go there. What really drives me is the efficiency of our product that we can provide to customers." In his view, real estate is still a neglected area of the supply chain. "I've always asked myself how I can make real estate more efficient for the benefit of the customer. At the end of the day, it's about getting something back in euros from the euros invested. This means that when I build something, it should be built in an energy-efficient way that saves the customer money in the long term." This can be photovoltaic systems for generating electricity on the roof and now also storage systems that make you more independent and operationally more efficient.

Profitability beats sustainability

"A green conscience requires certain investments." Björn Brunkow, Pierau Planning - Photo: Thilo Härdtlein

Sustainable or efficient - how do you communicate the topic? How does the customer react when you come up with a sustainable solution? - the editor-in-chief wants to know. "Sustainability is often associated exclusively with ecological goals," says Björn Brunkow. "It's often a question of terminology. When we think of efficiency, we immediately think of the right use of resources. Is the leap to efficiency then perhaps not ecological at all? If a fully automated high-bay pallet warehouse would perhaps be the most compact solution, but when viewed over 15 years, a combination with mini-load warehouses might make more sense because the energy input per cycle is cheaper with mini-load warehouses than with high-bay warehouses. If you do the math, then you actually have the efficiency in terms of ecology, also in terms of profitability." However, this is rarely done out of pure conviction. Brunkow knows that the entrepreneurial, economic component must always be considered, because competition demands it.

Braun adds: "You always have the tension ratio, keyword high-bay warehouse. You have to plan such a facility for 10 to 15 years. Then I ask my logistics service provider how long the contracts run for? Then he already has a problem per se. Business models are changing, customers are changing, requirements are changing. What you need is flexibility. What I do today, I won't necessarily do tomorrow. The industry is booming and customers are driven by efficiency, profitability and flexibility. It's a nice side effect if I can save something in the process. However, ecological sustainability is not the main focus, but that's something I'm happy to accept."

Hartmut Braun looks to the future. "The topic of Industry 4.0 and IOT (Internet of Things) is currently driving logistics." As the computer scientist reveals, the company is researching the topic of "SmartParcel": what does parcel distribution look like today and what could it look like tomorrow? How do things move along their transportation route and how can this be made as efficient as possible? "A nice side effect is that I can also save energy and avoid transportation. That is the objective and we need to find solutions for this in the future."

Convincing people to save energy

"It's not that easy to bring sustainable material to the market." Bernd Langreder, Forbo Siegling - Photo: Thilo Härdtlein

Langreder knows the sustainability problem from practical experience. The conveyor belt expert regrets that it is not that easy to bring sustainable material onto the market. "We have succeeded in developing a conveyor belt that halves the friction coefficient thanks to a special fabric on the underside. We went to the customer with the first generation of these belts and explained that this belt saves 50 percent energy and reduces CO2 emissions because you only need half the engine power due to half the circumferential force. The buyer said I have to buy cheaply because I have to sell my project. The project engineer said, 'I won't take that risk'. What's in it for me if the user saves money and I'm shipwrecked? We turned the tables and went to the end customers, to the airports, to DHL and all the others who transport things. We entered the market via this channel because these users specified the use of these belts to their system suppliers. Today, we can offer these energy-saving belts at the price of a normal belt and therefore have our foot in the door. We are ahead of the competition with the energy-saving belts and also with the sustainable Biobelt," says Langreder happily.

You always have to look at the overall system in a logistics center, says Brunkow. "There are many pieces of the mosaic that come together, be it the control system or the intelligent IT for the forklift control systems or the WMS and the right choice of storage system. In connection with the property, things like lighting, natural light, heating and ventilation also play a role." Looking at the entire supply chain, Brunkow believes that this would be the smaller share of the cake. Two thirds of energy consumption is accounted for by transportation, and this is where the screws need to be tightened.

Willingness to pay more for ecologically sustainable solutions is low

"Customers in logistics have always been price-sensitive, which is why they are not willing to pay more." Dustin Schöder, Hellmann Worldwide Logistics - Photo: Thilo Härdtlein

"You're right, of course," Schöder agrees with the previous speaker. "The leverage lies in the investments and the costs. We have the same experience as others in the market. The willingness of customers to pay more for environmentally sustainable solutions, whether in the transport or contract logistics sector, is low." Although sustainability is a qualification criterion, it is not the decisive criterion in a tender. "As a logistics service provider, we face the challenge that we also have single-customer locations where we only work for one customer. Depending on the industry, it is often the case that the customer specifies in detail the system they want to use to operate the warehouse. As a service provider, we have relatively little influence here. If the customer does decide on a less sustainable solution, then as a service provider you have to deal with it. It's a different matter if you operate multi-customer locations yourself, where you can achieve greater effects in terms of sustainability." Customers in logistics have always been price-sensitive, which is why they are not willing to pay more. From day one, you have to prove economic advantages wherever possible, Schöder describes the problem.

Sustainability and global change - what is the impact of digitalization? What will the future bring us?

Hartmut Braun ventures a forecast: "The drivers are certainly not ecology or climate change, but digitalization, Industry 4.0 and IOT. What was true yesterday is no longer true today. Amazon is entering the transportation business and becoming a competitor to its main service provider DHL. DHL is mutating into a car manufacturer with the Streetscooter because they can't find anyone to do it for them. These are the first signs of where things are heading. Industry 4.0, what is happening, where is it going? Every company is called upon to question its business model. Even if I am the market leader in certain areas, the future competition will no longer come from within the industry. Just look at the automotive industry. Tesla is the one building electric cars, not the big car manufacturers. They are not at the forefront. They are making an effort somewhere, but there is no perspective, no strategy. Let's see who else is there tomorrow and who will shake up the market as a newcomer. Of course, this has a complete impact on logistics, starting with long-distance transportation. People have been discussing 'from road to rail' for decades, but everyone who has tried it gives up in frustration because it doesn't work."

Digitization helps to implement sustainability

Logistics real estate expert Andreas Fleischer reiterates the benefits of digitalization. "We achieve a lot when we collect data." For example, Segro is addressing the issue of long waiting times at the ramp and how this can be improved. "Basically, it's relatively simple, you just need a contact that tells me whether the ramp is occupied or not and the driver has to find out somehow."

"Logistics real estate is a neglected part of the supply chain." Andreas Fleischer, Segro - Photo: Thilo Härdtlein

There is also a lot that can be done when it comes to designing properties, but too little is implemented, "because nobody wants to pay for it," says Fleischer. He advises simulating the property in advance: "In tests, we found out what happens if you add 2, 4 or 8 centimetres to the building insulation to avoid emissions. The result was payback periods of 99 years, because energy is still not expensive enough to make insulation worthwhile. We now know what happens when I open a door and it's minus 10 degrees outside and 17 or 19 degrees inside. We didn't have this data before. In operational terms, the potential savings are considerably greater than with insulation. What makes sense in private residential construction and office buildings does not apply to commercial buildings. If I'm thinking about a transshipment property, it doesn't make any sense at all because the gates are open on both sides. But if I have a fulfillment center where people have sedentary jobs and you have to cool in summer and heat in winter, there are operational options. That is actually the order of the day. We have noticed that too little thought is given together with the tenants to where considerable savings could be made," regrets Fleischer.

Editor-in-chief Martin Schrüfer moderates the final round and wants to know from Dustin Schöder whether logistics service provider Hellmann will also have to reinvent itself in the future? "Basically, logistics service providers are faced with the question of how to deal with the issue of sustainability. We are reasonably well positioned at Hellmann," claims Schöder. "The topic of sustainability strategy is on the agenda, including in the area of transportation. This includes keeping an eye on electromobility and gas technology. Plus the various types of electric hybrids. Then there is the issue of digitalization. With the help of sensors in the vehicles, you not only know where your vehicle is via GPS, but ideally you can also see the charging status or the current process status of a vehicle based on the axle load. Then you can plan dynamically. More and more customers are asking their logistics service provider about the footprint and using it for their own sustainability report. The Gartner Hype Cycle exists and we are hopefully out of the valley of tears. We are certainly not through yet, but the hype is over and something has changed from the initial hype to the current situation."

Walter Dorsch

www.forbo.com/movement/de-DEwww.hellmann.net www.pierau-planung.de www.psilogistics.com www.segro.com