Green Logistics and Corporate Initiatives - Research Paper Example

Green Logistics and Corporate Initiatives Introduction: Green logistic issue is an increasing concern in today’s world. The combination ‘Green’ and ‘logistics’ are explanatory itself, logistics refer to the control and management of the freight movements while green refers to sustainability with minimum negative impact on environment. The two words when put together raise the concerns and the need for the environment friendly transportation and distribution system. The development of Green logistics gained importance in the last few decades when issues like acid rain and global warming caught awareness. Many steps have been taken by numerous worlds’ organizations to integrate suitability and environmental friendliness in the logistic system and supply management as these activities greatly influences and has vast impact on the environment. (Ann, Button, Hensher.339) Evolution and Awareness of Green Logistics: The concept and awareness about the green logistics have evolved over time. Earlier it was a matter of public policy agendas which was forcefully implemented by environmental pressure groups that focused on the mitigation of damages caused by the transportation system. Later on it gained more importance as the businesses realized their responsibilities towards the environment and wider society perspective stressing upon the need of sustainable development for the future. Additionally the scope of green logistics has expanded over time, it not only includes the physical distribution of finished goods but it also deals with the entire transportation system including integrated logistics which includes storing, warehousing and handling systems etc. and the supply chain management which includes interaction with upstream suppliers and downstream customers. (Ann, Button, Hensher.340) The modern researches unlike the traditional ones take into account the environmental effects of all the activities of the supply chain. The traditional system while only recognized the forward distribution and logistic system, a ‘reverse’ logistic system has also been introduced over time which led to a new dimension of sustainable and green logistics. This involves movement of waste, used materials including toxic and hazardous goods for recycling and disposing purposes. This whole concept has created new markets for recyclable products and its movement. (McKinnon, Alan C.243) Reverse logistics is a modern concept in logistics which is now regarded as part of green logistics. This involves processing, planning and utilization of resources from the point of consumption to the point of origin, unlike the traditional logistics concepts which focus on movement from point to origin to consumption only. These will usually involve activities like transportation and collection, storage, reprocessing, recycling, reusing or disposal etc. This topic has been a centre of attention for many researches and work has been done to determine the drivers and constraints in reverse logistics and how techniques like speculation and postponement can be used to develop a better reverse green logistics. As the volume of waste is growing the government regulations for its recycling, reusing or disposing are tightening too. (Farahani et al.206) Globalization of Supply Chain Management and Increasing Issues: Supply chain management has gained importance throughout the world due to globalization and free trade agreements and removal of trade barriers. This on one hand gives opportunities for economic development to many nations all around the world and on the other hand has sustainability effects which could be good and bad both. In the long run, these trade arrangements and globalization if not managed properly can cause environmental, economical and social catastrophes which can have adverse effects all around the world. The growth of new logistic structures has also led to the increasing need of sustainable supply chain management. These days the production process is spread over many low cost countries and the organizations seek economic benefits unlike the traditional ways when the whole product from its production to consumption revolved in nearby areas which have increased total transportation volume. The companies now even face increasing pressure from consumers and society for the development and provision of green products through a green logistic system for which various international standards have been developed to measure company’s adherence to the environment friendly processes at all levels of supply chain management. The successful supply chain management requires the careful consideration of interrelations and trade offs between dimensions of sustainability as sacrifice in one can have a disproportionate effect on other areas. (Roger et al.4-5) Green Supply Chain Management: Green Supply Chain management (GSCM) is a concept that has gained importance at the corporate level. It refers to the integration of environmental management and supply management. The companies that adhere to green policies also prefer that their upper and lower supply chain also comply with minimum standards of environmental policies. This concept involves consideration by the company regarding choosing its vendor and assessing its performance on the basis on environmental friendliness, additionally it also deals with collaborative steps that the companies have taken along with their vendors to add sustainability to all the levels in the supply chain. It is basically an attempt between organizations to minimize the logistical impact of material movement. (McKinnon, Alan C.16) Paradoxes of Green Logistics: The green logistic system has several inconsistencies with the environmental compatibility. There are five factors that companies have to consider regarding the decisions about the environmental sustainability and economic feasibility. These factors have a positive impact on the company but can adversely affect the environment. These are also called paradoxes of green logistics. (Ann, Button, Hensher.341) 1. Costs: The aim of all logistic activities is to save cost and time while improving services and reliability, however the environmental consideration and attempt to built green logistics can be against this purpose. The environmental costs are usually borne by the companies while the consumer benefit from it, there is an increasing pressure from the pressure groups and society on the corporations to adhere to policies for green logistics. Researches also revealed that most of the companies management take environmental concerns as a means of internalizing cost saving while they ignoring the external costs of environment. This shows the paradoxical relationship that reduction in costs isn’t reduction in environmental footprint. (Ann, Button, Hensher. 342,343) 2. Time and Flexibility: In logistics timely delivery and speedy distribution is the most important factor. This is achieved by using most polluting and least energy efficient resources. The more frequent use of air transportation as a means of distribution is due to time constraints and the need for speedy deliveries in the upper and lower supply chain. Especially with the introduction of JIT and door to door services the need for quicker means to distribution has become vital for the business. The more the use of logistics, the less the production and retailing activities are constrained by distances. This actually involves higher usage of transportation system resulting into more trafficking and more negative environmental consequences. (Ann, Button, Hensher.344, 345) 3. Reliability: Reliability is at the heat of logistics, with the emphasis on timely and safe deliveries to satisfy customers. It is seen that the most environmental friendly ways of transportation are the least favorite like ships and railway and are least satisfying to customers. While trucks and air transportation is the most efficient and reliable ways of delivery. Hence the concept of reliability of logistic opposes the concept of green logistics. (Ann, Button, Hensher.345) 4. Warehousing: In most of the sectors a trend of decrease in warehouses and storing places has been seen. This decrease is due to the introduction of JIT systems and an emphasis on minimizing the storing and handling costs. As a decrease in these activities are seen a similar increase in the frequency of traffic and transportation is seen, as these inventories and product are more in transit than in stores and warehouses. As the traffic increases because of this reduction in warehouses an increase in environmental pollution and emission is seen due to more use of transportation. (Ann, Button, Hensher.345) 5. E-Commerce With the introduction of e-commerce the patterns and consumption and distribution have changed. E-commerce and online shopping is a booming business where millions of transactions are made everyday. This has shaken the traditional retailing and distribution channels and the need for an integrated structure of supply chain with suppliers, assemblers and freight forwarders have emerged. This may look like a movement free transaction to supplier but this has led to the installation of stores and warehouses outside the localities from which supply to customers take place which cause more pollution as most of the orders are placed with freight forwarders which works with quicker means of transporting like air transportation and trucks. So e-commerce involves more packaging and more tons-km of distribution through the logistic system. (Ann, Button, Hensher.345, 346) Development of Green Logistics: In order to develop green logistics work has been done which suggests the installation of green transportation and green warehousing. It is important to determine the most effective means of transportation according to its CO2 emission. On an average, sea transport is the best means to reduce the environmental footprint, while air transport is the most disastrous means of transportation. The idea is to shift freight from modes which produce more carbon emission like air and trucks to less carbon emission modes like sea and rail. (Larsson, Vega.11) Many organizations and government are investing into exploring the sea and rail sector to discover means and produce vehicles that supports the idea of green logistics. Second consideration would be given to the utilization of space and the capacity of transit compared to the CO2 emission. Better vehicle utilization reduces the amount of traffic and CO2 emission. Many steps have been taken by various companies to maximize the utilization of vehicles which includes companies working together and sharing their vehicles in order to reduce cost, energy and carbon emission. There is a need to promote regional approach to green logistics, which will reduce the number of trips in international trade. Steps like routing trips to deliver goods save time, cost and environmental effects. Drivers training can be a step to minimize emission by training and awareness regarding the carbon emission and steps by which it can be reduced. Warehouses should be adhered to green building principles, the existing ones should be changed to green buildings as much as possible. Further energy efficient vehicles have been provided which is a result of low carbon technology implication, it is estimated that this technology will help average CO2 emission to reduce by around 12%. For existing vehicles regular maintenance steps to improve and repair their engines to lower down the carbon emission have also been taken. Government needs to take more serious steps to develop green logistics by imposing significant financial penalties for carbon emission over a certain level, stricter regulatory policies and development of an infrastructure which supports environmental friendly transportation system and by saving green taxes, incentives etc. (Tobelmann.15-19) Application of Green Logistics and Corporate Initiatives: The environmental concern is not at the priority for the companies due to the cost factors as they believe it has no value addition in the short term. Nor the logistic system presents a very greener face. Additionally the reverse logistics has further burdened the traffic and additional carbon emission is caused by this. The issue is how the companies will realize the impact their environmental footprint has. Due to globalization and development of global logistics organizations in international markets have starting competing ignoring the environmental standards. There are three approaches to greenness, the ways it can be imposed to be implemented by the organizations; first being by the government policies, second where industries themselves take the step and third being by a compromise between the government and industry. (Ann, Button, Hensher.347) Conclusion: Due to globalization and expansion in the logistics system there is an increasing need to develop and promote a green logistic system for a sustainable future. The traffic has increased due to increased businesses and so has the carbon emission due to this trafficking. Companies have taken many initiatives along with the government and logistics firms to built a green logistic system which will minimize the environmental footprint and will result in much efficient use of energy resources. The companies need to measure their logistic activities and related costs and environmental effects. The costs drivers are usually the freight transport activities while other factors which effects the costs and environments include externalities from material handling, warehousing and logistic IT activities etc. The companies can greatly benefit from the green supply chain. It not only improves the brand image but also reduce costs to a great level. It will further reduce waste and increase the use of recycled products and materials which can further save costs. Works Cited Zanjirani, Farahani R, Nasrin Asgari, and Hoda Davarzani. Supply Chain and Logistics in National, International and Governmental Environment: Concepts and Models. Heidelberg: Physica, 2009. Print. Burritt, Roger, Stefan Schaltegger, Martin Bennett, Tuula Pohjola, and Maria Csutora. Environmental Management Accounting and Supply Chain Management. Dordrecht: Springer Science+Business Media B.V, 2011. Print McKinnon, Alan C. Green Logistics: Improving the Environmental Sustainability of Logistics. London: Kogan Page, 2010. Print. Brewer, Ann, Kenneth Button, and David A. Hensher. Handbook of Logistics and Supply-Chain Management. Amsterdam: Pergamon, 2001. Print. Martin Tobelmann. Public Policies on Sustainable Logistics and Impact on Third party Logistics Providers. Germany: Grin, 2011. Print Larsson, F.E, and D Vega. "Green Logistics in Temporary Organizations: a Paradox? Learnings from the Humanitarian Context." Supply Chain Forum. 12.2 (2011): 128-139. Internet resource. www.airl-logistique.org/fr/files/?view=412 Read More