Sustainable Logistics PDF

MODULE 3: Tactical & Operational Sustainable Logistics Background to Logistics Sustainable Logistics Green Logistics Practices...

MODULE 3: Tactical & Operational Sustainable Logistics Background to Logistics Sustainable Logistics Green Logistics Practices ©2023 B2G Copyright MODULE 3 : TACTICAL & OPERATIONAL – BACKGROUND TO LOGISTICS Background to Logistics ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > BACKGROUND TO LOGISTICS Logistics plays a key role connecting producers to the market they serve Loading Unloading Supply Transportation Manufacturing Unloading Loading Transportation Warehousing Loading Unloading Handling Preparing/ Transportation Distribution/ Packaging Delivery ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > BACKGROUND TO LOGISTICS Effective logistics help foster relationships between suppliers, shipping services and warehousers through automated systems As the new engine of economic growth, plays a core role in Land availability and its costs, transportation infrastructure overcoming the constraints of time-space between producers and government policies are important factors influencing the and the markets they serve. evolution of logistics space. The basic functions of transportation, storage, loading and The constant increase of logistics demand has put forward unloading, handling, packaging, distribution processing, higher requirements for the development of modern logistics. distribution, recycling, and information processing are organically combined. Logistics space refers to the projection of urban logistics The quantity and types of logistics facilities and enterprises activities (professional markets, logistics companies, logistics have increased dramatically, and the quality of logistics nodes, logistics infrastructure) in the geographical space. services has been increasing, which has led to dramatic changes in the spatial distribution of logistics. The spatial layout and evolution of urban logistics facilities is Restructuring of the logistics space leads to geographical an important force driving urban economic and spatial dispersion of supply chain, increasing the distance between development. suppliers, manufacturers, distributors and consumers ©2023 B2G Copyright MODULE 3 : TACTICAL & OPERATIONAL - SUSTAINABLE LOGISTICS Sustainable Logistics ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > Sustainable Logistics Sustainable logistics aims to lower the ecological footprint of its tasks, such as CO2 emissions, noise pollution, and accidents The environmental regulations are becoming more and more strict and Waste Management logistics companies must make their tasks increasingly more sustainable to meet these regulations and improve their social responsibility to consumers. Some actions to may take: Switch to more efficient and environmental-friendly vehicles Sustainable Logistics Logistics companies may transform systems and processes to design innovative strategies that care for the environment, measuring and minimizing the impact of their activities Choosing renewable energies. As energy sources, wind and solar power have a lesser impact on the environment and decrease fossil fuel and electricity usage Implementing the 4R strategy: Reduce, Recycle, Reuse, and Recover ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > Sustainable Logistics They are many obstacles to sustainability in logistics Packaging Capacity & Utilisation Reluctance to change In recent years, shippers have strayed from the An organization’s capacity is one of the biggest Shippers have grown accustomed to how use of foam as a shipping protector, but these obstacles to sustainability in logistics, but it is things are done in the modern world companies and organizations have turned not an impossible feat. towards plastic air pillows, and this change Unfortunately, this has led to a reluctance to Rather than decrease the capacity of existing change current processes, which have shown towards sustainability for protective packaging fleets, shippers and logistics providers must to be profitable, in favor of sustainable is expected to grow by 5 percent annually until work to ensure all current capacities are ventures. 2019. operating at a 100-percent efficiency. Yes, Society is becoming more aware of the For example, the use of transportation environment and energy consumption. consolidation programs can help an organization take advantage of capacity Shippers do not have a decision but a duty to limitations to reduce emissions and move embrace change. towards a more sustainable future ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > Sustainable Logistics Sustainable logistics involves emphasizing sustainability and a reduced environmental footprint when it comes freight, logistics and supply chain Macro Area Details of the Sustainable Practices in Logistics: 1 Practices Related to Modal Choice, Vehicle Use and Routing Warehouse Practices Practices Related to Suppliers and Purchasing Processes Practices Related to Packaging Management Expansive Management Practices and Social Programs ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > Sustainable Logistics Sustainable logistics involves emphasizing sustainability and a reduced environmental footprint when it comes freight, logistics and supply chain Practices Related to Modal Choice, Vehicle Use and Routing 1. Use of electric vehicles. 2. Use of strategies to define the modal of transport to be used considering Macro its transport capacity and the reduction of environmental impact. Area 1 Warehouse Practices 3. Mapping the energy and/or fuel consumption of the vehicle used. 4. Planning of delivery routes contemplating the optimization and Practices Related to Suppliers and Purchasing reduction of emissions of polluting gases. Processes Practices Related to Packaging Management Expansive Management Practices and Social Programs ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > Sustainable Logistics Sustainable logistics involves emphasizing sustainability and a reduced environmental footprint when it comes freight, logistics and supply chain Practices Related to Modal Choice, Vehicle Use and Routing Macro Warehouse Practices Area 1 1. Ergonomics and operational safety of the warehouse to improve working conditions Practices Related to 2. Rainwater collection for use in warehouse operation Suppliers and Purchasing Processes 3. Use of photovoltaic panels for power generation in warehouse 4. Use of electric trolleys fuels in warehouse Practices Related to 5. Use of less polluting fuels in forklifts Packaging Management 6. Mapping of waste in order picking operations Expansive Management Practices and Social Programs ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > Sustainable Logistics Sustainable logistics involves emphasizing sustainability and a reduced environmental footprint when it comes freight, logistics and supply chain Practices Related to Modal Choice, Vehicle Use and Routing Macro Warehouse Practices Area 1 Practices Related to Suppliers and Purchasing Processes 1. Selection of suppliers considering environmental practices, compliance with labor rules, code of conduct, anti-corruption program and Practices Related to sustainable certification Packaging Management 2. Programs for development of suppliers with sustainable aspects 3. Inclusion of social criteria and human rights in purchases processes Expansive Management Practices and Social 4. Prioritization of purchase of inputs available in local community Programs ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > Sustainable Logistics Sustainable logistics involves emphasizing sustainability and a reduced environmental footprint when it comes freight, logistics and supply chain Practices Related to Modal Choice, Vehicle Use and Routing Macro Warehouse Practices Area 1 Practices Related to Suppliers and Purchasing Processes Practices Related to Packaging Management 1. Reuse, recycling and reverse logistics of packaging 2. Reduction of the use of supplies in production of packaging Expansive Management 3. Use of recycled material in the production of packaging Practices and Social Programs 4. Development of campaigns to encourage the use of more sustainable packaging 5. Packaging design focused on optimization of handling ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > Sustainable Logistics Sustainable logistics involves emphasizing sustainability and a reduced environmental footprint when it comes freight, logistics and supply chain Practices Related to Modal Choice, Vehicle Use and Routing Macro Warehouse Practices Area 1 Practices Related to Suppliers and Purchasing Processes Practices Related to Packaging Management Expansive Management Practices and Social Programs 1. Free transport for social projects. 2. Management actions focused on transparency and anti corruption. 3. Adoption of environmental and social rules such as ISO 14001 and Labor rules. ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > Sustainable Logistics Several small steps that companies can take to start making their logistics business more sustainable Reusable or recyclable Renewable energy source Use plastic totes and heavy-duty containers which are cost- Use of solar energy and hydropower for many logistical activities efficient and can be used for multiple trips instead of single-time use electric ones. Paper, cardboard, corn starch, and bubble wrap, etc. are Transparent roofs for natural light to enter during daytime, biodegradable and preferred for packaging storage of rainwater for gardening and cleaning and renewable energy transportation from end to end logistics ©2023 B2G Copyright  MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > Sustainable Logistics Several small steps that companies can take to start making their logistics business more sustainable Green procurement Reduction in carbon emissions Purchase products or services, which will cause a minimum This initiative has a positive impact on LSPs’ environmental and adverse effect on the environment financial performance Damco, DHL and TNT are offering green services and reducing carbon footprints through various services Resource optimization Reduction in fuel consumption Use limited resources in an optimum way Automobile companies are adding fuel-saving features in new vehicles by using new engine technologies LSPs are optimizing resources by making maximum use of natural resources over man-made products Eco-friendly transportation, reduction in fuel consumption, and pollution solar light and rainwater harvesting in their warehouses. Use of CNG/Electric fleet Use of CNG vehicles to reduce cost, pollution, and fuel consumption CNG/electric vehicles (fuel-free) helps in reducing the noise level and making the air clean Adopting e-vehicles in the coming years LSPs: Logistics Services Providers ©2023 B2G Copyright CNG: Compressed natural gas MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > Sustainable Logistics LSPs can also improve their performance in terms of sustainability measures by adopting green logistics Digitalization Green Practice Certified with ISO 14001:2015 The adoption of green practices in the Plants more than 5,000 trees annually to ISO 14001:2015 specifies the logistics sector has also become evident enhance green cover around their requirements for an environmental by converting manual processes (paper- warehouses management system that an work) into e-processes (paper-less) organization can use to enhance its through digitalization Culture of planting tree saplings on environmental performance. various occasions as a step towards Adopting process automation, in order environmental conservation. It is intended for use by an organization to change its manual transactions to seeking to manage its environmental digital processes. Air sanitizing plants are also grown responsibilities in a systematic manner around warehouses or distribution that contributes to the environmental This initiative not just reduces the use of centers to purify the air and make pillar of sustainability. paper and makes document handling surroundings clean. easier but also brings transparency to the system The GPS technology help to track the exact location and then reduce carbon footprint ©2023 B2G Copyright  MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > GREEN LOGISTIC PRACTICES DIGITALIZATION ETHICS ELECTRIC EDUCATION GREEN PROCUREMENT GREEN SERVICES MULTI MODAL MONITORING PACKAGING ERGONOMY ENERGY MANAGEMENT ROUTE OPTIMIZATION ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > GREEN LOGISTIC PRACTICES Green Logistic Practices & Their Ranking (Sureeyatanapas et al, 2018) Eco-Driving 1st Training drivers to drive in an environmentally friendly manner; assessing and monitoring drivers’ performance through driving behavior and fuel consumption; optimizing energy efficiency of the vehicles through maintenance or repair techniques Alternative Energy Using alternative energy/fuel sources, such as biofuels, that cause less emissions; switching to modern or moderate energy-efficient vehicles; using hybrid electric vehicles. Modal Shift 2nd Changing transport mode from road to rail to integrated delivery systems; intermodal and multimodal transport ; combined transport Vehicle Routing Optimizing transport routes to reduce miles; optimizing transport load distribution; full vehicle loading; using IT applications for vehicle routing and scheduling, such as planning and routing software or internet matching systems ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > GREEN LOGISTIC PRACTICES Green Logistic Practices & Their Ranking (Sureeyatanapas et al, 2018) Green Packaging Reusing recyclable or reusable packaging and containers; substituting environmentally friendly materials for harmful ones; reducing packaging usage; reusing product packages; recycling wastes from transport and warehousing Green Administration 3rd Selecting, auditing, or assessing partners based on their environmental performance; promoting employee awareness of environmental protection and energy saving; establishing incentives for encouraging employees to improve environmental performance; measuring and monitoring environmental performance; training staff, employees and operators; developing formal environmental policies Reverse Logistics Taking back used products or packaging materials from customers for reuse or recycling; collaborating with customers on recycling programs ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > GREEN LOGISTIC PRACTICES Inapplicable Green Demands Inapplicable Green Demands Category Example Problem Demanding a specific type of fuel in trucks Could disrupt the asset-sharing Too specific demands (e.g. HVO) concept adopted by LSPs Demanding investing in an intermodal Payback of required investment Unfeasible demands transport system over a short contracting could not be covered under period short contracting period Demanding shortest lead time with lowest emissions (e.g. goods must be delivered tomorrow with the lowest emissions Unattainable due to non-existent Conflicting demands target, and such admission target can only technologies or infrastructure be achieved by train which runs once a week) ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > GREEN LOGISTIC PRACTICES Supply management process should integrate achievable sustainability targets Supply management Set further applicable: demands (i.e. flexible, negotiable and target-oriented) to stimulate LSPs’ green engagement Align operational environmental targets inter- departmentally before setting demands in RFPs Consider aligning demands with other shippers e.g. within RFPs and codes of conduct (could be attained with the help of a third parties such as policy makers) Exercise caution when articulating demands under tailor-made agreements: find the right balance by setting “enough” green demands without running out of potential LSPs ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > GREEN LOGISTIC PRACTICES Internal sustainability assessment should be perform as often Internal green measures Align environmental targets across different departments (mainly procurement and operations) Perform regular audits to ensure environmental agreements are fulfilled (even if compliance was confirmed pre-contractually) Incorporate the environmental sustainability element on the agenda of regular operational meetings Develop environmental KPIs for internal follow-up, and if possible, introduce them to shippers during operations (if already missed in contracts) Consider reporting environmental measures via international standards (e.g. GRI standard) Prepare sales team in advance by enquiring on shippers’ green ambitions (via e.g. initial profile checks) Clarify green investments payback periods Transparently provide clear cost breakdowns for the offered green solutions Proactively propose green solutions with a “price tag” (e.g. green tonnage) Focus on eco-efficient offerings ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > GREEN LOGISTIC PRACTICES Suppliers sustainability should be assessed and sustainable action encouraged Supplier Relationship Management Proactively initiate environmental discussions with LSPs even if missed in the RFPs Revisit and openly negotiate the demands set in the RFPs Invite LSPs to modify the requested environmental service levels based on their expertise Openly discuss even if they were missed out pre-contract, or would potentially alter ongoing operational procedures Consider cultural differences when outsourcing to LSPs in countries with low(er) environmental awareness Promote unified, target-oriented and applicable demands through websites, initial meetings with shippers and public seminar Proactively offer green solutions even if these were missed pre-contractually Set up clauses for mutual and continuous engagement (time, effort, resources) Construct the deal transparently Consider suitable contractual periods in relation to the desired green investments Consider risk/reward sharing on environmental projects Incorporate environmental KPIs and set up clear terms for following up with them Consider assigning cooperative roles to deal with potential trade-offs between operational objectives (e.g. short lead times) and environmental ones (increase fill rates) ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > GREEN LOGISTIC PRACTICES Recommendations that could increase alignment with 3PLs Set further applicable: demands (i.e. flexible, Consider cultural differences when outsourcing Perform regular audits to ensure environmental negotiable and target-oriented) to stimulate to LSPs in countries with low(er) environmental agreements are fulfilled (even if compliance was LSPs’ green engagement awareness confirmed pre-contractually) Align operational environmental targets inter- Proactively initiate environmental discussions Incorporate the environmental sustainability departmentally before setting demands in RFPs with LSPs even if missed in the RFPs element on the agenda of regular operational meetings Consider aligning demands with other shippers Revisit and openly negotiate the demands set in e.g. within RFPs and codes of conduct (could be the RFPs Openly discuss even if they were missed out pre- attained with the help of a third parties such as contract, or would potentially alter ongoing Invite LSPs to modify the requested policy makers) operational procedures environmental service levels cased on their Exercise caution when articulating demands expertise Promote unified, target-oriented and applicable under tailor-made agreements: find the right demands through websites, initial meetings with If available, include environmental sustainability balance by setting “enough” green demands shippers and public seminar and operational experts in the negotiation without running out of potential LSPs sessions Prepare sales team in advance by enquiring on Proactively propose green solutions with a “price shippers’ green ambitions (via e.g. initial profile Align environmental targets across different tag” (e.g. green tonnage) checks) departments (mainly procurement and Clarify green investments payback periods operations) Transparently provide clear cost breakdowns for the offered green solutions Focus on eco- efficient offerings ©2023 B2G Copyright MODULE 3: TACTICAL & OPERATIONAL > SUSTAINABLE LOGISTICS > GREEN LOGISTIC PRACTICES Leaders in sustainable supply chain Committed to becoming a resource Leader in engaging with suppliers to helps its farmers with the tools and Pioneer in the concept positive company enable sustainability improvements technology needed to foster sustainable of decoupling environmental company B Corp certification agricultural techniques impact initiatives to develop a sustainable Investment in green initiatives and supports organizations working to recognized as a leader in global beverage industry and developing in the care they take during product solve environmental problems with AI sustainability initiatives circular economy design and in sourcing materials and cloud computing decreasing the impact of its Engages with sustainability at every Creating Shared placing a focus on certifying the operations while providing products level of its supply chain Value strategy by sustainable supply of key to inspire responsible consumption driving partnership commodities ©2023 B2G Copyright