The Data and Characteristics of the Firms Using the Green Logistics Strategies - Research Paper Example

Introduction Sustainability is one of the subjects that have attracted a lot of interest in the environmental and business management all over the world in general and in the technologically advanced countries in particular. There has been considerable research in the past regarding the trade-off between such activities of economy as manufacturing and their impact on the environment. In addition, many studies to date have placed emphasis on manufacturing enterprises. Nevertheless, there has been very limited research upon the logistics sector. Most of the literature to date discusses the partial link between firm performance and environmental variables (Chol and Zhang, 2011). This research tends to fill these gaps by evaluating the way the sustainable performance of green logistics has facilitated the proactive green management in the firms belonging to different industries. A potential way to motivate the firms to adopt the approaches involving the use of green logistics is to dawn upon them the way use of green logistics’ approaches has benefited the firms in the past. An analysis of the comparative benefit drawn by the use of green logistics by the firms belonging to different industries would help the firms gauge the usability of adopting the green logistics approaches depending upon their nature of business and belongingness to a specific industry. One of the main hurdles in the way of adopting the green logistics approaches in a firm is the ambiguities and confusions about the way by which they can be adopted. This imparts the need to carry out a comprehensive study of the way different firms have adopted the approaches of green logistics in the past and have drawn positive results from this. More firms can imitate these ways to draw similar benefits from the approaches of green logistics. One question that this research would answer is the entities that can benefit the most with the adoption of the green logistics. Presumably, this research’s prime beneficiaries would be the firms that are looking for new and innovative ways to ensure environmental sustainability as they do business as well as gain competitive advantage in their respective industries. In addition to that, the possible beneficiaries of this research would also be the developers of green logistics as they would be able to learn the challenges and risks posed by the adoption of green logistics by the firms so that they can modify the green logistics to decrease the number of, or possible, reduce the severity of such challenges and risks for the firms, which in turn, would facilitate the growth of use of green logistics by the firms. Considering the fact that green logistics are one of the most important developments that have been made in the transportation industry, and the bad reputation of the transportation industry in terms of its adverse impacts on environment (Rodrigue, Slack, and Comtois, 2001, p. 1), another key question that this research would find an answer for is whether it is acceptable to apply constriction of the green logistics for the authorities of transportation. Literature Review Evolution of Green Logistics There has been immense emphasis on the need to integrate the transport into a process of sustainable development over the past few decades (Gerolimins and Daganzo, n.d.). A lot of countries around the world have understood the importance of adopting the strategies of green logistics because of the potential adverse impacts of the system of transportation upon the environment. “According to the U.S. Environmental Protection Agency…35 billion gallons of diesel fuel is used to deliver goods by truck and rail each year, generating nearly 350 million tons of carbon dioxide (CO2)” (Carlson, 2009, p. 128). One of the main challenges of the present age is creation of a long-term sustainable society whose environmental impact is the least negative. A new approach to logistics, known as the “green logistics” approach had surfaced in response to this challenge during the early 1990s. The green logistics approach considered the measures that could be adopted to protect the environment. This approach went beyond the traditional imperatives of logistics for effective and quick handling of the goods. The principles of logistics of green city Logistics are undeniably a very important function of the contemporary systems of transportation. The modern spatial and technological developments have brought improvement in the efficiency, reliability, and cost of the passenger and freight systems of transportation. However, at the same time, the adverse impacts of transportation on the environment have been widely recognized and are amongst the core issues of sustainability in all areas in general and in the urban areas in particular. Complications in painting the logistics “green” originate in the fundamental inconsistencies between “logistics” and “greenness” (Rodrigue, Slack, and Comtois, 2001). The strategies used by logistics operators aimed at saving the cost often get at variance with environment as the environmental costs are usually externalized. The activities of logistics usually do not compensate fully for using the infrastructures. Consequently, logistical operators use such modes of transportation that are least energy efficient, most polluting, and most intensive for the infrastructure in an attempt to accelerate the distribution (Geroliminis and Daganzo, n.d., p. 4). According to Taniguchi, Thompson, an Yamada (2003), there are three fundamental pillars that serve as the guiding principles for the logistics of green city, namely sustainability, mobility, and livability. These basic pillars support the goals of logistics like congestion alleviation, improvement of efficiency, and energy conservation. Confente and Russo (2009) developed a conceptual framework to define the strategies of green logistics in terms of an aggregate of three fundamental pillars, namely city of logistics, reverse logistics, and intelligent distribution. Reverse logistics from the standpoint of environment provides the basis of such environmentally sound practices as remanufacturing, recycling, recall, and recuse. The fundamental principle is that extension of life of a material or a product yields many environmental benefits. Positive results of the use of green logistics strategies Case study: China Chol and Zhang (2011) carried out a research to examine the casual link between the sustainable performance of an enterprise of logistics based in China and proactive green management, and to synthesize the factors of green strategy and green awareness that may have an impact upon the management of green logistics in a completely systematic structural equation model (SEM). SEM was chosen for this research because of the advantages it provides in the study of the casual link between the practice of green logistics and its performance in business. As a result of their research, Chol and Zhang (2011) found that the practice of green logistics has favorable effects on the sustainable business performance, and that this impact constitutes a positive environmental as well as financial performance. However, their study led to the conclusion that green strategy’s influence on the performance of a business, and the relationship between green awareness and the performance of a business is not significant. Case study: Europe The initiative of green logistics of Europe is quite strong as well as well-positioned at the macro level. Most of the goals and decisions have been performed over the last decade and a half. As a result of that, environmental tasks, goals, and issues have been incorporated in the institutions based in Europe that have enabled the European Union (EU) to persistently evaluate the adoption of proposals in all states that are members of the EU. In addition to that, the European green logistics policy advanced with the objective of creating a model of sustainable logistics in Europe. Three main fields are covered by this concept including economy, society, and environment using various activities of society, environment, and economy. The prime goals of the sustainable logistics of Europe are to co-ordinate these activities in ways that address the needs and fulfill the demands of the customers at the minimal cost. These costs should be inclusive of environmental issues which imparts the need for the European companies to also consider the external costs of logistics that are primarily linked with pollution, air quality, vibration, noise, change of climate, and accidents. Therefore, various research projects are currently studying different ways to reduce the externalities and to obtain a sustainable balance between the economic, environmental, and social goals. The various aspects of the environmental outcomes have become an essential component of development strategy in a vast majority of important companies in Europe. They find it difficult to negate the direct link between environmental issues and corporate actions, particularly in the regions where the macro green logistics have been already enforced. As a result of that, the pressure of management of the green supply chain is more than before. “From collecting just the waste and used transport units that are operations, which were managed at the end of logistics operations, we came to an era when the entire logistics within the manufacturing company and in the entire logistics process must be managed as green logistics” (Beškovnik and Jakomin, 2010, p. 151). In addition to that, the green concept of the management of logistics needs to commence with the recycled materials’ use in the manufacturing and means of ecological transport. This would make it easier to recycle the final product with lesser energy and in lesser time. Green benefits for Woolworths IMPERIAL Logistics (2010) carried out a research along with Cardiff University (UK) to calculate the extra distance travelled because of uncertainties in the supply chain. Various elements that included elimination of the “dead kilometers”, and networking modeling were included in the research. The concept of “extra distance” in the supply chain was introduced as a measure of uncertainty. In the research it was found that 13143 kms of the 207000 kms covered in a single week were merely “extra kilometers”, that accounted for a total release of 1071200 kg of carbon in a year. IMPERIAL Logistics (2010) also found that more than 6 per cent of the actually run transport distance did not add any value to the consumers. The “extra kilometers” were typically caused by failures in the distribution centre including queuing and picking delays, errors in the planning of transport, errors in forecasting, and increases in the short-notice volume. Identification of these uncertainties in the supply chain led to the unlocking of numerous green benefits for Woolworths in terms of reduction of carbon dioxide as well as savings in cost. Benefits obtained with the use of green logistics strategies in different cities Rodrigue, Slack, and Comtois (2001) carried out a research to study the environment-friendliness of the use of green logistics in the transportation industry, and to study the issue of green logistics and their environmental paradoxes in terms of the terminals, activities, and modes of transportation. As a result of their research, Rodrigue, Slack, and Comtois (2001) found that the applications of green logistics improves the efficiency of the transport systems and can be considered environment friendly. The researchers also found that despite the fact that logistics can be linked to the transportation systems that are less harmful for the environment, yet they have led to the development of a set of paradoxes that contradict the general perceptions held for them. Geroliminis and Daganzo (n.d.) have cited numerous examples of the schemes of green logistics that have been tried in different forward-looking cities across the globe that include but are not limited to Zurich, Berlin, Stockholm, Barcelona, and Paris. Green logistics and sustainability are integrally linked with each other. Use of the strategies of green logistics leads to a reduction in the pollution, improvement in the quality of life, and reduction in traffic congestion and health diseases as a result of the reduced level of air pollution. Zurich: green approaches reduced the cost and increased the profit The city distribution of vans increased in the urban area of Zurich as the number of trips increased and the accessibility in the area decreased (Ruesch and Eugster, 2001). Cargo Tram operated in the locations where the waste disposal and recycling department of Zurich moved the household waste. A pilot project commenced in the year 2003 to collect rubbish from the peripheries of the city with four stops. The number of stops increased to eight in 2004 and nine by 2005 (Geroliminis and Daganzo, n.d., p. 16). The main objectives were to shift the collected garbage away from the road, to offer the facilities at off-times for the working population, and to get closer to the clients. The authorities of Zurich adopted this innovative solution of tram because of the need for the usual lorries of waste collection to be three times longer to be able to navigate during the peak hours across the heavily congested city. Use of Cargo Tram not only proved to be cost effective and quicker, but also environmental friendlier as it produced fewer pollutants. The Cargo Tram technology moves a low intrinsically valued commodity. Stockholm: green approaches improved the efficiency of transportation system In Stockholm, a logistical centre was established in the Hammarby Sjostad District for the coordinated transports in the year 2003 (Geroliminis and Daganzo, n.d., p. 19). The main objective of the establishment of this logistical centre was reduction in the use of energy as well as emissions of carbon dioxide through coordinated transports to the municipal institutions and the residents. This centre delivers the goods purchased online, distribution of beverages and foods, and dry cleaning services. This centre “has the potential of becoming an integrated distribution system for locally produced food directly from approximately 300 local farmers” (ManagEnergy, 2013). The transports are centrally coordinated to reduce the number of deliveries made to the individual units. Smaller suppliers have also benefited from this green logistics approach as they have been enabled to deliver provisions and do not have to personally transport their goods any more. The logistical centre has not only reduced the transports’ environmental impact, but has also enhanced the security of traffic, improved the quality of service for the residents, and improved their access to the locally produced food. The review of Geroliminis and Daganzo (n.d.) highlights the fundamental qualitative ideas of the green logistics schemes most of which can be adopted in other cities around the world, though the combination of green logistics schemes that best suit a particular city need to be analyzed before adoption. Green logistics strategies Murphy and Poist (2000) identified the strategies that are least and most well-known for the management and resolution of the environmental issues that affect the value chain’s logistical decisions, and provided evidence of the links between the select characteristics of company and the specific kinds of strategies used in the management of environmental impacts related to the logistics. Murphy and Poist (2000) drew data from the companies based in Canada, the EU, and the US. Results of the research revealed that such strategies of green logistics as reducing consumption, recycling materials, and reusing the materials have universal popularity in the industrialized western countries. Firms that are more intensely committed to the environmentalism as compared to their peers amplify the use of these strategies of green logistics with different specialized thrusts like the environmental audits. Methodology This research would be conducted using a descriptive research that would elaborate the data and characteristics of the firms, systems of transportation, and cities that have successfully implemented the green logistics strategies in the past. The data about firms belonging to different industries would primarily be accessed online on a variety of databases. The secondary data would be drawn from online journals, books, case studies, articles, and the projects of firms. Since the corner stone of the research is to prove by means of previous experiences that green logistics can enhance the profitability of the firms and reduce their adverse impacts upon the environment, case studies and success stories in the past can be a potential source of information for this research. Data drawn from the case studies would be described so that a list of the available strategies of green logistics for the select industries can be prepared. Using the very secondary sources and case studies, the highest beneficiaries of the adoption of strategies of green logistics would be identified, and it would be argued whether or not it is acceptable for the transportation authorities to apply constriction on the green logistics. The data for this research would be collected by conducting a review of secondary data the large-scale literature. Major databases would be employed to locate the related articles including the ones from major publishers. An extensive review of the academic literature would be carried out through initial searches upon the particular terminology. There are two main objectives of literature review in this research; firstly, existing research would be summarized through the identification of themes, issues, and patterns, and secondly, literature review would help identify the field’s conceptual content. A potential challenge in this is the fact that it is indeed impractical to review all of literature. Therefore, a focused review of literature would be adopted as a valid approach, since this is a fundamental essential of structuring a research field and leads to the development of an integral part of the research. For this purpose, the journals that have been used so far and would be reviewed afterwards also include but are not limited to Traffic and Transportation, African Journal of Business Management, and Transportation Journal. Various books have also been studied to identify the ways in which the strategies of green logistics have been adopted in the past and can be adopted as have been mentioned in the references. Topics that were looked for included success stories of the use of green logistics, advantages of adoption of the green logistics strategies, implications of use of green logistics strategies in the systems of transportation, challenges and opportunities of use of green logistics strategies, analysis of the patterns of usage of green logistics, and economic effects of the use of green logistics strategies. Using the literature review, the case studies of firms, cities, and countries that have adopted particular approaches of green logistics strategies would be explored and the benefits drawn from the use of these approaches would be discussed. References: Beškovnik, B, and Jakomin, L 2010, Challenges of Green Logistics in Southeast Europe, Promet – Traffic and Transportation, Vol. 22, No. 2, pp. 147-155. Carlson, K 2009, Green Your Work: Boost Your Bottom Line While Reducing Your Carbon Footprint, Chapter 8, USA: Adams Business. Chol, Y, and Zhang, N 2011, Does proactive green logistics management improve business performance? A case of Chinese logistics enterprises, African Journal of Business Management, Vol. 5(17), pp. 7564-7574. Confente, I, and Russo, I 2009, Green Logistics in Italy: new challenge for sustainable development, 12th International QMOD and Toulon-Verona Conference International Conference on Quality and Service Sciences (ICQSS), [Online] Available at http://www.univr.it/documenti/AllegatiOA/allegatooa_11268.pdf [accessed: 17 January 2013]. Geroliminis, N, and Daganzo, CF n.d., A review of green logistics schemes used in cities around the world, USA: University of California, [Online] Available at http://www.metrans.org/nuf/documents/geroliminis.pdf [accessed: 17 January 2013]. IMPERIAL Logistics 2010, Green Logistics Strategy, [Online] Available at http://www.imperiallogistics.co.za/documents/IMPERIAL-Logistics_Green-Logistics-Strategy.pdf [accessed: 17 January 2013]. ManagEnergy 2013, Internet-based Logistics Centre for Coordinated Transport in Stockholm, Sweden, [Online] Available at http://www.managenergy.net/resources/246 [accessed: 17 January 2013]. Murphy, PR, and Poist, RF 2000, Green Logistics Strategies: An Analysis of Usage Patterns, Transportation Journal, Vol. 40, No. 2. Rodrigue, J, Slack, B, and Comtois, C 2001, Green Logistics, [Online] Available at http://people.hofstra.edu/jean-paul_rodrigue/downloads/Green%20Logistics.pdf [accessed: 17 January 2013]. Ruesch, M, and Eugster, J 2001, Strategic development of freight transport in the canton of Zurich, Study on behalf of the Canton of Zurich, Zurich, Final Report. Taniguchi, E, Thompson, R, and Yamada, T 2003, Visions for city logistics, Proceedings of the 3rd International Conference on City Logistics, Madeira, Portugal, June 2003, pp 1-16. Read More