Even though all-in-one control towers can provide valuable insights, you will learn in this article why they shouldn’t serve as the primary tool for emissions calculations regarding data accuracy, scope definition, complexity of analysis, regulatory compliance and wider integration.
More and more transport and logistics companies implement all-in-one control towers to gain real-time visibility over various aspects of the supply chain. They are also increasingly used as a basis for carbon accounting to maximize synergies. A supply chain control tower is a centralized control and monitoring system used in transport logistics to manage and optimize the entire supply chain. It provides real-time visibility and control over procurement, production, warehousing, transport and distribution.
Essentially, the control tower acts as a central platform that collects data from various sources, such as enterprise resource planning systems, warehouse management systems, transport management systems and other information sources. This data is then analyzed to gain insights into supply chain performance, identify bottlenecks, predict delays and make effective decisions in real time.
The functions of a supply chain control tower can vary depending on the specific requirements and complexity. Typical features may include inventory monitoring, shipment tracking, transport route management, supplier coordination and proactive problem solving.
Oftentimes, control towers are also used as a basis for a company’s emissions accounting, assumed to provide the necessary tools and insights to measure, manage, and reduce CO2e emissions across the entire supply chain.
There are a few issues in this regard as well as remedies to mitigate them.
How can you rely on the accuracy of emissions data?
Ensuring the accuracy of emissions data is crucial for reliable carbon accounting. Control towers rely on data from various sources, including internal systems, suppliers and external databases. However, discrepancies, inconsistencies and missing data can be difficult to detect, considering that regular data auditing processes are not likely to be an integral part of the process. Hence, there is a risk of compromising the overall accuracy of emissions calculations.
To address this issue, robust data validation and verification processes would have to be implemented to ensure the integrity of emissions data. Establishing data governance policies can also help improve data accuracy within control tower systems. Here you can gain insights why primary data is crucial for measuring CO2 emissions in transport and logistics.
How should you define the relevant scope of emissions calculations?
Defining the scope of emissions to include in carbon accounting is complex, especially in multi-tiered supply chains with diverse activities and stakeholders. Control towers may struggle to establish clear boundaries for emissions measurement, leading to incomplete or inaccurate carbon footprints.
Conducting a thorough scoping exercise to identify all relevant emission sources and boundaries within the supply chain would have to be an initial step, engaging stakeholders across departments and organizational levels to ensure consensus on scope definitions. Documenting the scoping process to consolidate assumptions and exclusions transparently is likely to facilitate accurate reporting and decision-making processes.
How do you overcome the complexity of analyzing carbon emissions?
Analyzing carbon emissions involves complex calculations and methodologies, including emissions factors, allocation methods and baseline setting. Control towers may lack the specialized tools and expertise required to perform accurate emissions analysis, leading to errors or oversimplification of results.
Investing in advanced analytics capabilities and specialized carbon accounting software to support complex emissions calculations and analysis can help in this regard. Training employees in basic carbon accounting principles and methodologies to enhance their understanding and proficiency in emissions analysis can furthermore be beneficial.
How can you fulfill evolving regulatory requirements & global reporting standards?
Carbon accounting requests compliance with various regulations and reporting standards, such as the ISO 14083 standard and the Greenhouse Gas Protocol. Using control towers as primary tool for carbon accounting neglects the need of having to keep up with and integrating evolving regulatory requirements to ensure compliance. In the long run, this may lead to legal issues and reputational damage.
Addressing this issue would require freeing sufficient resources to stay informed about relevant regulations, reporting frameworks, and industry standards for carbon accounting. Regularly updating control tower systems and processes to align with changing regulatory requirements must become an integral part of the reporting process. Furthermore, seeking exchange with regulatory authorities, industry associations and legal advisors can help to ensure compliance and mitigate compliance risks.
How can you integrate carbon accounting into existing control tower systems?
Integrating carbon accounting functionalities into existing control tower systems can be challenging, especially if they were not initially designed for this purpose. Retrofitting control towers with carbon accounting capabilities may require significant investment in technology, training, and process redesign.
Taking a phased approach to integration, prioritizing critical functionalities and addressing integration challenges incrementally might be the most effective approach. Leveraging APIs, data integration platforms and middleware solutions can facilitate seamless data exchange between control tower systems and carbon accounting tools.
Conclusion
Given that the above issues are taken into consideration, companies can leverage all-in-one control towers to acquire some insights for carbon accounting. However, control towers are not suitable as a stand-alone tool for measuring, managing and reducing a company’s carbon footprint across the supply chain.
To learn more about CO2 emissions management and what shipzero can do for your company, get in touch with one of our industry experts.
