Environmental, Social, and Governance (ESG) is becoming increasingly important for businesses, not least because of current and forthcoming legislation.
Andreas Maritz, Strategic Growth Executive at VSC Smart Supply Chains, says, “Environmental criteria considers how a company safeguards the environment, inclusive of corporate policies that address for example, carbon emissions and climate change. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.”
Legislation vs responsibility
Corporate Governance is largely legislated through several Acts of Parliament and investors, managers and employees are familiar with these Acts and work within their framework daily.
When it comes to the environment we again return to a mix of legislation and personal responsibility. However, more and more companies and investors are realising the importance of Environmental Responsibility and the need for sustainability and responsible business practices to secure their long-term success.
“One of the areas where businesses can make substantial ESG improvements is in their fleet management operations,” says Andreas.
VSC Fleet Management Modules and their impact on ESG
VSC Smart Supply Chains offers several modules to the transportation industry that can be seamlessly integrated with third party systems such as SAP ERPs as well as the VSC Portal.
These modules include Route Optimisation, Resource Scheduling, Route Execution, Distribution Workflow, Transportation Management and Fleet management.
Together these modules don’t just affect the Environmental element of ESG but the Social and Governance aspects too.
From an Environmental point of view, they significantly reduce the emissions associated with transportation as vehicles travel shorter distances, spend less time idling and drivers operate within the green zone of optimal driving. The result is less greenhouse gas emissions, a smaller carbon footprint and of course air quality improvement. Vehicles and their components such as tyres have a longer lifespan, and the overall use of the planets resources is reduced.
Social considerations include improved safety for drivers and other road users and improved customer and consumer experience. Optimization can lead to more predictable schedules for drivers, reducing stress and fatigue, and contributing to a healthier work environment.
When it comes to Governance these modules can ensure that drivers adhere to regulatory requirements and minimizes risks associated with non-compliance. The tracking and reporting features provide transparency into operations and activities and all reporting and actions are accurate and fair.
“Our existing modules and ongoing efforts to improve fleet management not only ensure that our users optimise their operations but improve their ESG stance on many levels. The result is that our users have a better relationship with their customers, shareholders, management, and employees,” says Andreas.
Best Practices for Fleet Route Optimization
The VSC Smart Supply Chain’s goal is to understand their customers’ requirements thoroughly and provide them with the most suitable solutions tailored to their specific environment.
“We go beyond the simple supply and instillation of our modules. We assist our clients in their use and ultimately enable in the application of best practices for Fleet Route Optimization,” adds Andreas.
These best practices may be summed up as follows:
- Data Quality: Ensure that data used for optimization is accurate, reliable, and up to date.
- Driver Training: Train drivers on the benefits of route optimization, emphasizing its role in reducing their workload and improving their work-life balance.
- Transparency: Communicate openly with employees and stakeholders about the goals and benefits of optimization, addressing any concerns or questions.
- Continuous Monitoring: Regularly monitor and update optimization algorithms to adapt to changing conditions and ensure fairness.
- Collaboration: Collaborate with industry peers and experts to share best practices and stay updated on the latest developments in fleet route optimization.
Andreas says, “We ensure continuous improvement and enable companies to adapt to changing market dynamics, ultimately enhancing their competitive advantage and reducing their impact on the environment.”
Case Study – Travel Time Improvement
The VSC Smart Supply Chains have repeatedly proven their ability to greatly reduce the amount of travel time of their customer’s fleets.
“Not only do our supply chain technologies aid business in optimising their operations, but in addition we have a proven track record in ensuring that those plans are executed upon,” says Andreas.
In the below example VSC Smart Supply Chains plotted the optimal amount of travel times needed for a client’s fleet to perform their functions and as the company’s employees began to follow the planned strategy so the amount of actual travel reduced significantly until planned and actual became travel time becomes more in line.
“Our modules, expertise and experience go a long way to minimising the environmental impact of a company and of improving their overall ESG stance,” concludes Andreas.
If you would like more information or a demonstration of what VSC has to offer please contact Andreas Maritz, Strategic Growth Executive, on 072 049 5824 or andreas.maritz@vscsolutions.co.za