Green Logistics 2025: Driving Innovation with Hyperlocal Logistics

In an exclusive interaction with Industry Outlook, Om Vijayvargiya, Head –SCM & Logistics, Schaeffler India, discusses how the Indian Supply chain and logistics are evolving. His highlights shed light on performance, reliability, cost-effectiveness, technological innovation, and sustainable practices in the industry. With over a decade of experience in the supply chain management industry, Om Vijayvargiya is a seasoned leader driving the company's profitable growth. Other than SCM & logistics, his expertise spans Operations, Program Management, Lean Manufacturing, Process Automation, and digitalization.

As emission norms tighten, how are companies integrating EV retrofits into fleets without disrupting operations or compromising load capacity across distribution networks?

Sustainability has emerged as a critical goal for all business organizations. The government is also promoting the integration of sustainability across industries and all the industries are working in line with this initiative. Our organization also aims to become carbon neutral globally by 2040.

Regarding supply chain management and logistics, we have started to act towards reducing the Scope 3 emissions. One of the effective actions to reduce these emissions is implementing the use of Electric vehicles (EVs). However, the limited availability of EVs in the commercial vehicle category poses a big challenge to effective usage in the sector. Our industry needs high tonnage capacity EVs like 9-18 tons. I believe such higher-capacity EVs will be available in India very soon. Adding to this, India has infrastructural challenges related to EV charging stations. Imagine traveling long distances in an EV vehicle without a proper charging facility. Therefore, EVs in commercial vehicles are still in the nascent stage in India, they are not currently the most viable option.

Therefore the best option to tap into is CNG vehicles. These vehicles emit 48 percent less carbon compared to IC engines. We have been using CNG vehicles on some of our lanes to reduce carbon emissions. Additionally, initiatives like Network Restructuring, increased use of Returnable Packaging, and Optimized Container & Vehicle utilization further contribute to our sustainability efforts.

Diesel-powered warehouses hinder sustainability. How are automated systems like HVAC and lighting helping older facilities meet energy goals without major infrastructure upgrades?

Warehouses play a multifaceted role in supply chain management, serving functions such as storage, distribution, and processing of goods. From this perspective, the necessity of warehouses in modern supply chain management is undeniable. A good warehouse always facilitates the working of MHEs, a sufficient number of racks and offices. Hence, a warehouse operation is more like an industrial hub rather than merely a storage facility. Warehouses typically employ a substantial workforce in constant motion alongside MHEs. This combination can result in significant carbon emissions.

Considering the huge demand for warehouses in India, HVAC and automated lighting systems are the effective choice for sustainability. Additionally, best practices to reduce carbon emissions include minimizing unnecessary movement of MHEs. Selecting a warehouse based on specific business requirements regarding size or volume can optimize operations. Expert consultation can lead to credible warehouse layouts, enhancing efficiency and sustainability. Warehouses should utilize Polycarbonate sheets on the roofs of the warehouse for a brighter environment. Roof insulation systems can reduce the warehouse temperature by 2-3 degrees compared to non-insulated roofs. Implementing sustainable energies, such as solar panel installations, offers a promising solution for reducing reliance on air conditioning and electric lighting systems. These practices not only reduce carbon emissions but make business cost-effective.

Scope 3 emissions from suppliers are difficult to track. How is blockchain helping the logistics team identify carbon hotspots across suppliers and freight routes?

Emissions are categorized into scope 1, scope 2, and scope 3, with supply chain activities typically falling under scope 3 emissions. As mentioned earlier, our focus is on reducing scope 3 emissions. Tracking these emissions presents challenges, but leveraging current technology allows us to pinpoint issues and develop effective solutions.

One promising approach involves using technologies like Blockchain, IoT, GPS, etc., providing comprehensive visibility across the supply chain—from raw material acquisition to customer delivery. This technology offers timely updates on supply chain activities, including any disruptions, delivery schedules, and location tracking. The data provided enables us to assess travel times and identify carbon emission hotspots. With this understanding, we can devise effective strategies to restructure material movement and optimize networks, promoting faster deliveries and reduced carbon emissions.

Incorporating these technologies facilitates a more sustainable supply chain by enhancing transparency and enabling informed decision-making, ultimately contributing to our goal of minimizing scope 3 emissions.

Containerized micro-fulfillment hubs improve part availability in remote areas. How are they transforming industrial supply chains lacking strong cold or delivery networks?

The rapid growth of e-commerce in India has significantly increased the demand for containerized micro-fulfillment solutions, enabling companies to meet urgent customer needs quickly and efficiently. However, industries such as ours, which focus on Automotive and Industrial customers, operate with various distribution models that differ from those of micro fulfillment centers.

In our customer base, certain geographic hubs in India are concentrated. For instance, Gurugram serves as a central hub in the north, while cities such as Chennai, Bangalore, and Coimbatore are prominent in the south. The west has key areas like Mumbai, Pune, and Gujarat, and the east is anchored by Kolkata and Jamshedpur. Given these distribution patterns, the micro fulfillment center model is less applicable to our needs.

Instead, we utilize a hub-and-spoke model to achieve success. This approach involves establishing large warehouses in strategic locations near customer hubs and stocking them with the necessary inventory. Deliveries are then tailored to customer orders, allowing for efficient distribution and fulfillment in response to demand. This model supports our industry’s requirements and ensures we effectively meet the needs of our automotive & industrial customers across key regions in India

Traffic congestion is a major hurdle in timely parts delivery. How is AI-based route optimization improving delivery time, fuel efficiency, and cost control?

In most of the urban areas, traffic congestion has become a major problem, affecting timely deliveries. Innovations such as AI technology offer promising solutions by analyzing historical traffic data alongside real-time updates to identify patterns and potential bottlenecks. This technology can also suggest alternative routes, enabling organizations to optimize their resources effectively.

In addition to AI, other emerging technologies like the Internet of Things (IoT) and blockchain can be employed to enhance supply chain operations. IoT devices can provide real-time tracking and data collection, offering deeper insights into traffic conditions and delivery status. Blockchain technology can ensure data transparency and security, helping organizations manage their logistics more effectively.

By leveraging these technologies, businesses can work towards improving delivery efficiency despite the challenges posed by urban traffic, contributing to more resilient and adaptive supply chain systems.

With rising demand for faster service, managing inventory is crucial. How is SKU rationalization helping reduce delivery delays and product returns in auto supply chains?

SKU rationalization is a process that heavily depends on the customer's needs. Managing fewer SKUs can simplify operations for managers, while a higher number of SKUs can complicate distribution tasks. As an OEM tier I supplier, our product offerings depend significantly on the customer’s new projects and technology. If our current products meet their needs, the SKU count remains stable; however, a demand for new products necessitates an increase in SKUs.

Achieving SKU rationalization poses challenges, particularly for industries like ours, where product development is dynamic and responsive to customer needs. Unlike industries with fixed product lines that seldom encounter SKU-related complications, our industry must constantly adapt its SKU count.

To address these challenges, we strive to streamline our SKU management by standardizing packaging, which can help reduce SKU diversity. This approach can lead to more efficient use of resources by minimizing material pickups, reducing delivery locations, and enhancing the timeliness of service. Fewer SKUs ultimately facilitate more effective warehouse and transportation operations, allowing us to respond to customer needs efficiently while maintaining operational simplicity.