Paulig’s overall aim is to reduce the greenhouse gas emissions from the company’s own operations by 80% and from its value chain by 50% by 2030. What part does the company’s logistics department play in this? The best person to answer is Logistics and Operations Director Rogier Verkarre who highlights that often the fastest and most effective way to reduce logistics emissions is to first assess the need for it and then focus on optimisation.
When a company sets itself ambitious climate targets, it’s necessary to examine the issue from every possible aspect from production and operations to transportation and supply chain, to name a few.
On a global scale, the fact is that transportation amounts to a fairly small portion of the overall emissions in the food and beverage industry – however, the percentage varies depending on the product in question. Due to the growing transportation volumes, global emissions from transportation are becoming more and more significant and this is why transportation in the whole industry is becoming an obstacle in the way of reaching the goals set in the Paris Agreement. New solutions are needed to stop this development.
That’s why at Paulig, Logistics and Operations Director Rogier Verkarre and his team have recently been working intensely on mapping the company’s logistics emissions and are creating a roadmap to reduce them.
As a result, Paulig has committed to reducing its logistics emissions by 25% by 2025 from a 2018 baseline.
How to achieve this? According to Rogier Verkarre, reducing emissions from logistics in general can be divided into three main categories – and people usually only tend to focus on the last one.
1. For every transport, first assess if it is absolutely necessary or can be avoided. According to Verkarre, sometimes another solution could be far more effective with a much smaller environmental impact.
“For example, in Belgium, we built our distribution warehouse next to the production facility and connected them by a bridge. Previously, we had 25,000 trucks a year driving between the production site and our two distribution centres that were located further away,” he explains.
2. If transport is necessary, assess how it could be optimised. Ways to do this are either network-based, or by optimising the loads. They include e.g. using transport partners who have optimised a particular route (e.g. using train or short-sea) or combining tasks and loads so that instead of two different routes going the opposite ways, one single service takes care of both incoming and outgoing logistics. Optimising logistics also includes smart product design so that more product fits on a pallet or in a truck.
According to Verkarre, optimisation is above all about taking a comprehensive look at the whole supply chain and identifying where they need improvement. Sometimes there are legacy routes that made sense in the past but not any longer.
“Due to Paulig’s history of growing through M&A, we’ve achieved a lot just by doing this. For example, Poco Loco in Belgium was originally a supplier for Santa Maria for Sweden, and Santa Maria was serving Paulig’s Business Area East, mainly from its distribution center in Estonia. So, the logistics from our factory in Belgium took the products to Sweden and from there to Estonia, where the products were relabelled and shipped to Russia. Now, they go directly from Belgium to Russia. By doing this we didn't only reduce cost and emissions, but also time to market for Russia was almost halved,” he describes.
3. Deploy new technology and methods as they become available. This is the part that people tend to focus on. For example, electric and gas vehicles as well as self-driving trucks will reduce emissions in the future. Rogier envisions that in the future, new technology will also play a key part in further optimising logistics, for example by planning transport for the nights when it is quieter and automating last-mile delivery with self-driving cars or drones.
“It’s important to understand, however, that in this area, we are dependent on the development and cost-efficiency of technology. We can deploy it as soon as it becomes available, but while we are waiting for it, we can achieve a lot by focusing on the other two,” Verkarre says.
From low-hanging fruits to a more systematic approach
So, how do these principles look like on Paulig’s roadmap? Rogier Verkarre says that once he and his team set their target, they first started working on removing unnecessary routes and optimising existing ones.
“First we focused on all the low-hanging fruits. For example we optimised the route to market for Russia and we consolidated all Paulig’s products for Central Europe in one central warehouse. This year, we have started a more systematic approach,” Verkarre says.
In logistics, this systematic approach comes in the form of the Logistics Excellence programme. It looks at Paulig’s logistics operations in the broadest possible way with and aim to identify opportunities for improvement step by step.
“I really appreciate Paulig’s leadership for this combination of great heritage, high ambition and careful planning that we see happening across the organisation now. Quite often high ambition leads to rushed execution but Paulig has decided to take a more patient approach that will definitely bring more results,” Verkarre concludes.
Career: Rogier Verkarre has an MA in Industrial Engineering, specialising in biochemistry and food processing, as well as an MBA and a MA in Supply Chain Management. He initially joined Poco Loco as the Supply Chain Director, moving to Paulig with the acquisition of Poco Loco in 2010. Prior to Poco Loco, he worked for Latexco, most recently as the Group’s Production Director.
Hobbies: As a father of three daughters, Verkarre spends most of his time with the family nowadays. He is also a long-time practitioner of karate, holding a 3rd degree black belt. Some years ago, he wrote a paper for one of his exams about the impact of karate on working life. Verkarre sees that above all, karate helps with two things: it teaches persistence and trains an ability to thrive in even in the face of adversity, and it offers an excellent outlet and a place where you can revitalise.
Last book you read: Thinking, Fast and Slow, by Daniel Kahneman.