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Sustainability means meeting the needs of the present without compromising the future. Examples range from throwing an increasingly rare fish back into the lake to switching from finite fossil fuels to renewable solar, wind or water power.
Although sustainability might strike some retailers as idealistic or esoteric, efforts to achieve it can bring immediate financial rewards. Stonyfield, for example, has worked with Ryder System in a quest for sustainability that also paid off in sizeable supply chain cost reductions.
A Londonderry, N.H.-based organic yogurt, milk and ice cream supplier, Stonyfield has reduced outbound supply chain carbon emissions by 56 percent while cutting outbound supply chain costs by 21 percent, says Ryan Boccelli, the company’s senior director of logistics. He bases those figures on 2010 results compared with a 2006 baseline.
Between 2006 and 2010, Miami-based Ryder helped Stonyfield eliminate 4.9 million miles of unneeded trucking, which saved $2 million in fuel costs, Boccelli says. That reduction in miles, combined with other Ryder-induced efficiencies, prevented the company’s supply chain from spewing an estimated 9,786 metric tons of carbon into the atmosphere.
The reduced emissions and increased profits both mean a lot to a company founded in 1983 as a nonprofit organic farming school, Boccelli says. Stonyfield later became the first U.S. manufacturer to offset 100 percent of its factory CO2 emissions, and one of its founders wrote a book entitled Stirring It Up: How to Make Money and Save the World.
But offsets, good intentions and the profit motive failed to curb the 80 to 90 percent of Stonyfield’s carbon emissions that came from the supply chain — activities that include producing the milk on the farm, shipping ingredients and packaging to the factory and delivering finished products nationwide from a plant in the Northeast corner of the country, Boccelli says.
In the face of such challenges, achieving an idealistic goal like supply chain sustainability takes plenty of real-world savvy, says Mark Swenson, vice president of business development for Ryder Supply Chain Solutions.
A ‘Pony Express’ system
Ryder began handling parts of Stonyfield’s shipping in 2006, taking over management of Stonyfield’s common carriers — the trucks owned and operated by outside companies. At the time, common carriers were handling about 85 percent of Stonyfield’s outbound shipping, Boccelli recalls. Ryder’s new duties ranged from negotiating contracts with carriers to monitoring carriers’ results and reporting carriers’ performance compared with Ryder baselines, Swenson says.
At first, Stonyfield retained control of its dedicated fleet — the two tractors, two trailers and two drivers hauling products to points in the Northeast that constituted 15 percent of outbound shipping — but initial success with the common carriers prompted Stonyfield to hand over management of the dedicated fleet a year later. The dedicated fleet soon grew to three tractors, six trailers and four drivers and began handling 20 percent of outbound shipments.
Ryder set up a “Pony Express” system for the dedicated fleet: One driver pilots a truck about 250 miles to Newburgh, N.Y., where a new driver replaces the original. The Pony Express model alleviates the need for drivers to stay out overnight, enabling Ryder to use tractors without sleeping compartments – reducing weight and, as a result, boosting fuel economy.
What’s more, without long hauls the truck engines no longer need to idle overnight to keep the cabs warm while the driver sleeps, Swenson says, and reducing the payload’s time on the road limits the likelihood of spoilage and lessens inventory carrying costs.
Early on, Ryder introduced automated freight bills and payment, eliminating the reams of paperwork that occupied much of Boccelli’s time and freeing him to concentrate on analyzing the business. “Now, we’re at about 96 percent electronic,” he says. Switching from paper to electronic documents also helps Ryder compile and study the data, which increases the company’s understanding of the system and improvements that include route optimization, Swenson says.
As part of Ryder’s “end-to-end” management of outbound freight from the factory dock to the retailers’ distribution centers, Stonyfield has added a second distribution center and placed it under Ryder management, Bocelli says.
Ryder uses satellites to keep tabs on trucks, making sure drivers take the most efficient routes and enabling management to redirect trucks when orders arrive for product, Swenson says. The systems also can direct trucks to the nearest fueling stations and repair shops.
Ryder’s onboard technology monitors the amount of time trucks are idling and checks to see if drivers are shifting gears at the optimum moment — two ways of reducing fuel consumption and carbon emissions.
Meanwhile, Ryder has convinced truck maker Freightliner to produce tractors and trailers to Ryder’s RydeGreen specifications, which call for aerodynamic mirrors, fairings and cab extenders that deflect wind, automatic tire inflation for better mileage and lighter rims to reduce weight. Synthetic oil and automatic transmissions also improve fuel economy and reduce emissions, says Swenson.
Ryder also searches for other modes of transportation. As a result, Stonyfield began using rail in 2009 and now ships 10 percent of its common-carrier volume this way, Boccelli says. The company hopes to increase that to 20 percent this year.
The future could bring other changes, too. Stonyfield has concentrated on cleaning up its own factory and outbound supply chain, but plans to lobby suppliers to reduce carbon emissions in their factories, farms and supply chains.
In studies aimed at helping Stonyfield achieve its goal of reducing greenhouse-gas emissions 75 percent by 2015, Ryder has constructed a scenario calling for a second Stonyfield plant, located in the west, and doubling the number of distribution centers to four.
“Efficiency and sustainability are highly correlated,” Swenson says. “They’re not mutually exclusive.”