Logistics Essay Paper on Logistics and Supply Chain Management

Logistics and Supply Chain Management

Executive Summary

            The logistics and the supply chain operations of retail firms and companies result into the emission of carbon dioxide and other Greenhouse gases into the atmosphere among other environmental impacts. With the increased awareness among the public regarding the need for a carbon-free atmosphere, firms are incorporating sustainability practices into their operations. Strong environmental lobbies have set guidelines on the required sustainability practices. Firms are combining practices like carbon-efficiency in logistics & supply chain, Lean thinking and Life-Cycle Assessment. Proper and advanced utilizing of these practices lead to a sustainable environment and operations. The self-sustaining operation ability of a business depends on their sensibility to their corporate social responsibility. Firms are thus incorporating environmental management practices aimed at gaining a competitive edge in the world market.

Carbon Management Practices

            Retail companies and organizations dealing with logistics and statistics in the world are currently undertaking steps of sustainable operation. They have taken steps that reduce the emission of carbon from their operations (Wisner, Tan & Leong, 2011). These firms strive to manage their logistics and supply chain activities in order to reduce the carbon dioxide emissions. A company that is efficient in its carbon and thus energy efficient practices, in the end lowers its cost of operation of its business.

             Carbon management and carbon efficiency is a corporate social responsibility that most firms are advised to incorporate in their activities (Wisner, Tan & Leong, 2011). Various questions may arise as to why environmental lobbies are insisting on firms to employ carbon efficiency practices. The next section gives the reasons why carbon management has been is becoming a major preference by many firms and government institutions.

Reasons for Carbon Emission Management Practices

            The reduction in the carbon emissions by a firm strongly relates to the savings on the energy costs. When a firm wants to reduce its carbon emissions it normally looks for better and advanced ways of improving on energy efficiency (Hensher & Brewer, 2001). Most of these advanced energy methods reduce the emission of carbon and thus minimizes on the loss of energy through emissions. These methods result into the reduction in the costs of energy incurred.

            Minimizing the consumption of energy by measures to improve energy efficiency is a viable way of handling the risks encountered with the energy supply (Hensher & Brewer, 2001). Firms are expanding their carbon management practices through the enactment of low carbon onsite generation of energy. Retail organizations like Wal-Mart and other firms have saved on the costs and ensured security in supply through installation of modern information technology like the Bloom Energy Servers (Fernie & Sparks, 2009).

Drivers of Carbon Management Practices

            There are various factors that revolving around social change and the expectations in the market that are causing the increase in carbon management practices (Fernie & Sparks, 2009). Firms in areas of the world that are likely to experience adverse climatic condition understand the purpose for controlled carbon emissions to the stakeholders in terms of risks to be involved in investment in such areas (Fernie & Sparks, 2009). The sectors adversely affected by these conditions are being compelled to advocate for the reduction in carbon emissions.

            There is a change in the general and social expectations on the employers from the community, old work force and newly recruited work force. Most employees give preference to firms that practice carbon management practices since it is an indication that the firms are operationally safe and regard corporate social responsibility as an important factor in the operation of their businesses (Fernie & Sparks, 2009). The performance of the carbon management practice of a firm is a measurement tool employed by the workforce to determine the safety and future sustainability of operating in the firms.

            In the world of business carbon management is an important practice that has increasingly become trendy. Most firms operating in a competitive area incorporate carbon management practices in their daily activities to have a competitive advantage in the market since their fellow competitors incorporate these practices too (Fernie & Sparks, 2009). Various investors require the release of the performance of the carbon management practices of a firm before undertaking any investment. Therefore, many firms are adopting the carbon management practices thereby attracting potential investors.

            Although customers may not directly insist on their retailers to practice carbon management, their trust in the brands develops proportionately depends with the carbon management performance (CMP) of a firm. Business customers like Wal-Mart also inquire about the CPM of their suppliers (Ross, 2000). Firms supplying organizations in the public sector face increased criteria in the procurement of tenders. These organizations follow a CMP-linked criterion that details the requirements to qualify for a tender award.

Carbon management Practices in Logistics and Supply Chain

Logistics is the extent of organization and regulation of the cargo movements through modern information technology techniques. Information technologies are aimed at reducing the environmental (carbon emissions) and energy effects of the cargo distribution. Logistics entail the processes a product undergoes from packaging to the management of waste Button, K. J., (Hensher & Brewer, 2001). With the increased awareness of carbon emissions, a new form of logistics referred to as reverse-flow logistics that ensures the movement, recycling and disposal of waste came into existence.

            Despite the changing trends in the retail world, companies are still adamant to adopt techniques that suit the requirements of the changing times and the obligations that come along. However, in the current world with the need for a clean built environment and the emergence of strong environmental lobbies, most companies are now improving their operations (Ross, 2000). Firms are modifying their operations to ensure a sustainable future with fewer omissions of carbon and other related Green House Gases that contribute to global warming and other harmful effects to heath and the atmosphere.

Case Study 1; Mark & Spencer Retail Company

            Marks & Spencer is a retail company dealing in foods, furnishes and clothes located in the UK (Britain). The company serves its customers in Europe, UK, The Middle East and the Americas. It also provides financial facilities for its customers.

            This firm has increased its productivity in the recent past through the reduction of carbon emission. This culminated in significant reduction in the costs incurred from its activities. In the period of 2006 to 2009, the firm saved about 72 Million Dollars from the measures it undertook to improve carbon emissions (Waters, 2011). The firm uses a smart logistics system that has a synchronized coordination between the transport network and the logistic practices of the firm in the supply chain. This software together with other hardware efficiently improves the logistics process thereby minimizing the resulting carbon emission saving on the costs of running the business. 

Case Study 2; Wal-Mart Retail Company

            Logistics and supply chain initiatives undertaken in Wal-Mart in 2008 reduced the net cost saving of business by 282 Million Dollars. This company utilizes information technology techniques to improve its logistics in the supply chain thereby improving its carbon efficiency. The Information Technology Strategies help to reduce carbon effluents (Radhakrishnan, 2001). The strategies effectively coordinate the logistics in the supply chain thereby saving the energy wasting in utilizing non-technological methods (Myerson, 2012). The GPS technique keeps up with the location of the various transportation facilities in transit for efficiency in operation. Keeping track of the location of the trucks in transit and the surrounding environment by GPS is key in minimizing wastes of losing contact with the control stations (Radhakrishnan, 2001). The firm keeps proper modern inventories that effectively enable the loading and offloading of goods from the silos on time thereby minimizing wastages and unnecessary carbon emissions.

Lean Thinking

            Lean refers to the process of waste elimination in the zones of operation of any given firm. The Toyota Company of Japan started this practice to tackle the problem of waste of resources. These wastes take many forms. They include overproduction, wastage, waiting, unnecessary production, unnecessary movements and unnecessary inventories (Gattorna, 2008). This approach is intended to enable the minimizing and possibly eliminating wastes involved in the processes of the supply chain. A value management practice aims at finding the best value of resources while minimizing wastage.

Case study 1; Deutsche post DHL

            A convention carried out by the US, estimated that the emissions caused by logistics in the supply chain to be close to 20% globally. The increased awareness of the public led to their inquisitiveness about the product and the services the company offered to its customers (Fernie, & Sparks, 2009). Customers expected the firm to provide information about its carbon footprints and the recycling procedures in their supply chain. 

            DP DHL contributed about 28.4 million tons in carbon dioxide emissions and therefore there was a pressing need to mend its carbon efficiency as a corporate social responsibility. The company therefore came up with a detailed Go-green strategy to provide green logistics thereby minimizing the carbon emissions resulting from the activities of the firm (Fernie, & Sparks, 2009).          Conceptualizing of lean thinking as the company strived to improve its carbon efficiency by lowering the carbon footprints in its logistic processes (Fernie, & Sparks, 2009). The carbon efficiency in the firm thereafter improved significantly. Creating the lean supply chain entails figuring out the unnecessary process that increases the carbon footprint in the supply chain and eliminating them.

Case study 2; DHL Express Asia pacific

            DHL Express AP was among the best logistics company with close to 20,000 employees and it transported close to over 30 million shipments throughout Asia. In order to reach the targets set by the region for the CO2 emissions, DHL Express AP initiated the GO Green project. The company used the Greenhouse Gas Protocol (GHG Protocol) to quantify and monitor its carbon footprints through the logistic process in the supply chain (Cheng & Choi, 2010). The company employed lean thinking in that they advised their employees on the need for optimized utilizing of resources by minimizing wastages. Optimization of the resources in the supply chain would decrease the total cost and in turn minimize the CO2 emissions from the firm.

            The operations that utilize electricity and fuel increase the carbon emissions. DHL Express AP therefore advocated for initiatives that will save on fuel and electricity consumption-lean thinking (Clausen, Ten & Klumpp, 2013). The employees in the firm use energy saving techniques like lighting with energy-saving bulbs and natural light. The firm uses conveyor belts in its silo. They used to function even when they were not conveying any packages.

             However, the wastage that resulted and the corresponding increase in carbon emissions were alarming and thus there was need to shut it down automatically, thereby, increasing the carbon efficiency through lean thinking (Clausen, Ten & Klumpp, 2013). The strategies of lean thinking substantially reduced the carbon dioxide emissions thereby increasing the carbon efficiency in the company with minimal effect on the operations of the factory.

Life Cycle assessment (LCA)

            LCA is termed as an impartial process that evaluates the impacts a product, an activity or a process has on the environment by identifying the inputs used in the process and the corresponding wastes formed and come up with measures to improve the environment (Cetinkaya, 2010). LCA is a process of determining the impact that processes have on the environment and determining how moderating the effects can achieve environmental sustainability (Cetinkaya, 2010). A team of experts majoring in environmental concerns is required in order to carry out a LCA. A LCA process is resource intensive and requires skilled expertise.

            The LCA process goes through various steps. The initial step involves the evaluating the scope and the goals. Conducting an inventory analysis determines the elements contained in a product that may have an impact in the environment (Button, Hensher & Brewer, 2001). The third and the most intensive of the steps is the Life Cycle Impact Assessment (LCIA), simply referred to as Impact Assessment. After the experts conduct an intensive analysis, they interpret the data to act as a tool for environmental decision-making.

Goal and Scope Definition

            The expert analyst conducting the LCA determines the scope of the practice stating the various elements under study and the constrictions in the assessment (Bowersox, 2013). The goal should be clear enough for the assessors to relate to during the impact assessment stage. The LCA is light or detailed depending on the data collection on environmental impacts of the primary elements.

Inventory Analysis

The assessment experts create of a list of the parameters that make up the life cycle of the product within the constrictions of the assessment. It entails the construction of a flowchart detailing the entire process; input of raw materials, manufacturing processes, distribution processes, consumer usage, disposal (Blanchard, 2010). Collection of data on the raw material inputs, products and their corresponding byproducts, wastes in soil, air and water follows. The assessors then carry out statistical comparative data calculations that relate the various parameters in the flow diagram (Blanchard, 2010). The whole processes flows with a clear relationship between the materials and the energy flow. 

Impact Assessment

            Attaching the impacts in the inventory analysis to their various portion follows projecting to a greater scale of the entire operational system (Arlbjørn, 2008). The experts classify the data by assigning of each environmental impact to the elements in the inventory analysis. They refer to the conceptualization (goal and scope) stage in relation to the assessment made (Arlbjørn, 2008). The next step is characterization that utilizes mathematical formulas to convert the data obtained from the inventory analysis into impact pointers that are decision-making tools of sustainability in the supply chain.

Interpretation

In this section, analyzing of the results obtained in the impact assessment and formulating better ways of improving them forms the core of the this LCA stage.

Application of LCA in Environmental Sustainability

            Analyzing the environmental indicators of the LCA process has its applicability in the design of the working environment enabling sustainable operation. The parameters that impact the environment can therefore be controlled leading to environmental sustainability in the processes of the supply chain of a firm (An & Fromm, 2005). Firms are continuously employing the LCA strategy in designing the working environment as a step to achieving environmental sustainability. For instance, the Coca-Cola Company employed the LCA on the water emitted by the firm. The assessment enabled the company to minimize on the effects of the water effluents. 

Conclusion

            Firms are increasingly becoming aware of the need for a healthy carbon-free environment that is energy efficient. They are incorporating sustainable practices in logistics and their supply chain operations to increase carbon and efficiency thereby minimizing their operation costs. In addition, they are employing Lean thinking to minimize on the unnecessary wastage of resources in the supply chain. Together with life cycle assessment, they maintain environmental and operational sustainability thus creating a self-sustained cycle. A carbon-free and environmentally sustainable environment is the future for growth of many businesses. Ultimately, the practices reduce operational cost and improve efficiency of logistics and other operations in the supply chain.  

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