Energy Management: The Next Step in Supply Chain Optimization
When considering new ways to optimize their supply chain, many large enterprises—like UPS, Amazon, Walmart, and FedEx—first focus on technology enhancements. Hyperautomation, artificial intelligence (AI), edge computing, 5G, and virtual reality are the latest ways to fine-tune transportation, shipping, and logistics to meet customer demand and improve profitability.
But today's supply chain concerns extend beyond IT fixes, encompassing issues that are critical to the C-Suite. Rolling blackouts, severe weather, and wildfires are some of the top causes of supply chain disruption. Plus, a stronger focus on environmental, social, and corporate governance (ESG) is changing the landscape, with rollouts of electric vehicles (EVs) and greater reliance on solar and wind to power fleets, refrigeration and their facilities.
Energy management offers new, creative ways to optimize the supply chain by fostering resilience in the face of power outages, and addressing customer demand for eco-friendly, sustainable practices. A smart energy strategy also offers enterprises a unique opportunity to generate greater revenue through wholesale energy market participation.
Getting Smart About Energy Management
Many enterprises can lower energy consumption costs by signing direct access contracts with independent power producers (IPPs). Yet they still have to contend with demand charges, which can be unpredictable and a significant budget item—a growing concern, as enterprises build EV fleets and add charging stations. They also need to consider the cost and complexity of maintaining diesel generators for backup needs, and determine the best way to incorporate green energy into the mix.
Enterprises that get smart about energy use can positively impact their supply chain. Developing an energy services plan and leveraging technology, including AI, energy storage, and automation, can improve visibility into, and control of, these moving parts.
With the right smart energy management strategy, supply chains can be optimized to:
- Enhance use of renewable assets. Solar and wind can become flexible resources that adapt to changing utility rates and help minimize demand peaks, when paired with energy storage. For example, enterprises can discharge stored clean energy when electricity from the grid is more expensive or EV fleets are charging.
- Improve resilience. Enterprises can’t control extreme weather, heatwaves, wildfires, flooding, rolling blackouts or aging grid infrastructure, but these adversely impact supply chain continuity. A smart energy strategy can mitigate these risks and ensure backup power without expensive and environmentally unfriendly diesel generators.
- Align with energy policy mandates. As more states establish aggressive sustainability goals, a smart energy strategy can support initiatives like deployment of EV charging infrastructure and emission-free fleets, and increased reliance on renewable energy.
- Meet corporate ESG goals. Investors and customers increasingly support brands that actively show sustainability leadership. Tools that integrate energy storage with real-time data analytics can optimize use of renewable resources and reduce reliance on fossil fuels.
- Add new revenue streams. With the right platform in place, enterprises can participate in wholesale markets. Storing excess solar energy can enable enterprises to participate in energy markets, creating new revenue streams and increasing returns on smart energy investments.
A select few global logistics companies are already embracing smart energy management. Building what some call the "hub of the future," companies are integrating renewable energy sources; advanced analytics and energy storage to support fleet electrification and EV charging; backup power and load management to support ESG and sustainability goals; and open the doors to wholesale market participation.
But these strategies are not reserved for just the largest enterprises. Advancements in technology, new energy policies, and better ROI for solar deployment are putting these benefits in reach for companies of all sizes. The time is right to look beyond the usual IT enhancements and further optimize the supply chain with smart energy management that can offer a triple threat: saving money, adding new revenue streams, and reducing impact on the environment.