Impact of Green Logistics on the Future of Logistics Management - Report Example

Impact of green logistics on the future of transportation and logistics management Logistics refers to the set of all activities that considers procurement of raw materials to delivering the final goods to the customers. Green logistics refers to doing the various activities of logistics in a sustainable way. The following report analyzes the impact of green logistics on transportation sector. For the following report data collected from both primary and secondary data sources are analyzed. It has been arrived at the conclusion that green logistics is the way forward in future. If green logistics is to be implemented on a large scale it will have a considerable impact on the transportation sector. Introduction Logistics is a significant part in supply chain process. It is the integrated management process which is involved in managing all activities needed to shift products from different places. Through logistic process company takes raw materials from different sources, helps to reach those things to production point and after that distribute those things to various selling points. Logistic activities comprise of storage, transport, material handling, inventory management and all other information required for this process. The logistic objective is to co ordinate all the activities which will meet customer requirement at a low cost. In the modern world people have become very much concerned about various environmental issues. As a result companies are improving its logistic system for environmental benefit. External cost of logistics which are associated with air pollution, climate change, vibration, noise, accidents etc are taken into account by the companies. This helps to achieve sustainable environmental balance and social objectives. The concept of green logistic is implemented here. Green logistics comprises of all the attempts in measuring and minimizing the impact of ecology on various logistics activities. Sustainability is maintained in the activities of reverse and forward flow of service, product and information’s from their origin and consumption point. The aim of green logistics is to develop company values by balancing environmental efficiency and economics. Concept of green logistic was originated in the mid of 1980. Characterizes of this logistic system is the use of advanced equipments and technology. This helps to minimize environmental damages at the time of operations. For increasing diversity and differences various environmental issues have become very important to be concerned with. The firms have to face changing circumstances for this. Political, economical and social conditions demands for sustainable development to transport system and strategies of supply chain to reduce negative impact on environment. In green logistics there is a strong relation between natural resources, logistic and environment. The approaches of logistic are cross company and holistic. Environmental objectives can be fulfilled by financial and strategic goal. Ecological concerned of green logistic determines how far supply chain process is getting affected with the issues of resource conservation and environmental protection. Rising cost of energy and stakeholders influence affects the supply chain of organization. Green logistics is gaining its importance by various national and international regulations. Moreover the awareness of customers is increasing for eco friendly logistic services and products. Every company needs to maintain different corporate social responsibilities. Green logistics is an important part of it. Logistics plays a vital role in protecting environment and its resources. Many innovative transport systems are building to safe guard the environment. Controlling air pollution is one of the vital aspects of this logistic system. Understanding and reducing pollute emission helps in sustainable development of environment. These strategies of green logistics will plays significant role in safeguarding future environment and its logistic system. As a result different logistics company is adopting appropriate sustainable activities for its overall development. Environmental preservation has ecological impact which has a strong effect on local wildlife to global climate. Social development also depends on logistics activities of the society. Research objective This research paper describes about the topic of green logistics and its impact on logistics management and future of transportation. Aim of the paper is explaining green logistic in details. The paper also analyzes its impact on logistic management and its role in future transportation. In the modern time people have become very conscious about environment. Therefore green logistics is gaining its importance in maintaining sustainable environment. The objectives of this paper are discussing and finding various ways of implementing green logistics. This paper also focuses on technological change, waste heat management and some other issues which are associated with this logistic system. Research question The research question of this paper is “indentify an emerging concept of Green logistics and analyze its impact on future transportation and logistics management”. Literature review According to the authors Alan McKinnon, Dr Anthony Whiteing and Professor Michael Browne the term logistics is now widely used to describe transportation, handling and storing products for sales and consumptions. For past 50 years the fundamental approaches of logistics are towards social well being and environmental safety. Previously the logistics companies were only focused on gaining profit even at the cost of natural and environmental factors. But in the past years government and public has become concerned about environmental issues. They have forced the company to reduce negative impact of logistic system on environment. Goods distribution hinders the quality of local air. Vibration and noise are generated from this which plays a significant role in to increase global warming. Logistics has a strong impact on climate change. It has increased pollution and environmental problems. Green logistics involves in improving the transport system for preventing environmental degradation. It is a long term plan. Cutting carbon emission is an important step in this. The concept of green logistics was portrayed as a reconciliation of economic, environmental and social objectives. In the present time many measures have taken which have helped to reduce negative impact on logistics and has developed green logistic system. The writers also mentioned that green logistics is an evolving issue. It is experiencing rapid growth for social development. For maintaining sustainable logistics system the logistics firm are implementing different rules, polices and strategies for using advanced transport system which will required less energy and generate less pollution. The writers also suggest that in future water will become key driver of supply chain. The urban structure has to become more sustainable and support green growth which will increase efficiency in logistics. The author also states that transport companies face some major challenges in performing sustainable environmental policies. Often the companies lack in using tools which reduce environmental damages. They have very less information’s about best supply chain practices for becoming green logistic company. This type of logistics companies should be provided with sufficient information for the future benefit of the world (McKinnon, Browne, and Whiteing, 2012). As per the authors Paul R. Murphy and Richard F. Poist it has become an important duty of the managers of logistics companies to build and implements strategies for environmental benefit and promoting their activities of corporate social responsibilities. With the help of new technologies they are developing plans for reducing different environmental pollutions. They are implementing different models for green logistic system. By this process logistic management experiences a major chance. Earlier the function of logistic company was only based on profit making. But with the change of time and rise of various environmental problems the businesses are also focusing on sustainable development. In the present time several researches are conducted on green logistics. Intensives studies and experiments are done on greening the companies of supply chain which are going to benefit the world within few decades. Presently cutting carbon emission is a strong challenge for logistic managers. In future location of logistics and supply chain facilities will be highly influenced by the cost of carbon and energy (Murphy and Poist 2000). According to the writers Martin Streichfuss, Ingo Wieck, Wolfgang Stölzle and Thorsten Klaas-Wissing green logistic has a huge impact in developing different business models in the industry for protecting environmental damages. Recycling of waste raw materials is an important model of this logistic system. This effort helps to reduce waste products and generate new products from those wastes. The approaches of green logistics are not only concerned with manufacturing process. It has taken the form of holistic approach which comprises technology, people, organization and process. The stakeholders of logistic company are answerable to the customers if they fail to follow rules and regulations of environmental sustainability. Therefore continuous pressure from stakeholders plays a vital role in logistic company for adopting eco friendly approaches in their management process and transport system. Technology faces a huge challenge in implementing different processes of this logistic. Still now the transport companies have the impression that maximum initiatives involves in huge expenses. For lack of information the companies have such ideas. The long term benefits of this logistic system improve distribution efficiency of the company. Advanced model of Green logistic helps in product lifecycle management. It also plays a vital role in reducing energy consumptions. In future this logistic program will play a vital role to increase differentiation of services. Customer retention is improved by this process. So the writers’ state that by the development of green logistics the customer gets more associated with logistic company for their corporate social responsibilities (Streichfuss, Wieck, Stölzle and Wissing, 2011). According to Akkucuk Ulas Green logistic involves in changing raw materials used in the logistic process. For sustainable development logistic companies use recyclable plastics. It also involves in reducing number of warehouse inventory. It also takes necessary steps in converting the offices of Transport Company into green offices. The aim of green logistic is to develop opportunities in this service market for benefitting environment. Future research in this field will develop many more theories and practices of green marketing strategies. Social responsibility of the business is a major consideration of this type of logistic system. In the modern world the most important marketing concept is implementing sustainable green program in the work process. So the author states that building eco friendly logistic system will help the transport company to develop important marketing strategies which help the company in both ways. It will attract customers and it will also benefit the society by controlling different factors harming the natural balance. Over utilization of resources also causes environmental damages. The logistic company often uses more fuel than actually required. Consumption of these limited resources creates a threat on ecological balance. The logistics companies are now thinking about future and trying to use alternative ways for their transport system. Some transport companies are using those vehicles which do not required petroleum and diesel. Those vehicles are run by battery and gas. This type of transport system causes very less pollution and hardly causes environmental damages. Sustainable development of the environment has become a significant part of customer satisfaction and it is expected that in future it will gain more importance. Therefore developing logistic system according to it will be beneficial for the company (Ulas, 2014). According to the writers Lee Chapman and Tim Ryley involvement of logistics into disposal of waste material, recycling of different materials including hazardous goods has become a major trend in new market. For its commercial and economic imperatives logistic industry has responded to environmental safety. Significant issues of logistic industry like pollution, resource depletion, congestion, etc has still not been solved. The basic characteristics of green logistic system are classified into many parts. The cost saving strategies of logistic firm is different from environmental considerations. The companies often externalized environmental cost. By this benefits of the logistic are enjoyed by the users but becomes burden for society and environment. In present time many individuals of society are not willing to accept this extra burden harming the ecology. They pressurize the government and the company to adopt policies in safe guarding nature. For this the logistic company focuses much on their environmental policies. The government also applies strict regulations on transport companies for reducing negative impact on environment. Presently diesel is cheaper than gasoline in many countries. Still now diesel is more. For making Green logistic effective these alternative fuels much be make cheap for reducing pollution from diesel (Ryley and Chapman 2012). As per the author A.C. McKinnon and M.I. Piecyk supply chain management has a significant impact on global warming. Climate change has forced many logistic companies to change their priorities and focus. They have modified their transport operations in past few years and it is expected that in future they will improve it. In present times 40% of logistics companies are concerned about global warming and adopted policies of green logistic. The percentage of Transport Company is expected to increase to 80% in 2020. The managers of green logistic are aware of the problem of logistic influence on climate change. Future trend in green logistic there will be a relation between CO2 emission and the volume of fright movement. They will also have a direct relation with economic growth. Subsequent reduction and stabilization of externalities related to freight would influence the promotion of sustainable development of environment. Time and speed plays a vital role in regulating policies and logistics management in the companies. Often for saving time vehicles uses high speed which results in the consumption of huge amount of fuels and increases pollution. Green logistic companies focuses on these issues and tries to make effective solution of these problems by implementing effective alternatives. These issues have a strong impact on logistic management of Transport Company. For overcoming such problems they are making new rules and regulations for limiting transport speed. It is expected that in future green logistics will find many innovative ways to overcome various environmental problems (Piecyk and McKinnon 2009). Research methodology Research methodology is stated as the basis of any research paper. The various techniques can be used in a research study to deliver appropriate results. There can be two types of researches that are qualitative and quantitative. Quantitative research is that type of research that focuses on being able to statistically analyze research findings. Qualitative research on the other hand focuses on those types of research on which opinion is valued more than statistics and no. crunching. These two types of research represent two extreme type and methods of conducting a research. Using either one of the two methods may not give a complete picture and hence a combination of the two methods may be required to be incorporated. Actual research most of the time uses a combination of these two methods of doing research. In this research paper for example a combination of quantitative and qualitative techniques have been used to understand the impact of green logistics on the transportation and logistics management. Any research as such will require data to be collected. There are various sources of collecting data. These various sources can be grouped under primary and secondary data sources. Using secondary sources of data refers to the utilization of the works of previous researchers in this field. The data from the secondary data sources can be used as a stepping stone for conducting further research. In this research paper extensive collection of previous literary works in this field has been used as the first step. The data from the primary data sources was analyzed on the basis of data collected from secondary data sources. The primary sources of data used for the sources of data collection refer to the utilization of sources such as interview, surveys, etc. The problem with any sources of primary data specifically surveys is to consider the sample population. The important thing to consider over here what is the sample size that needs to be considered for the purpose of the study. Obviously greater the sample size better will be the research however for all practical purposes it is not possible to include a large sample population hence it is required to create a sample population. However, when selecting the sample population care should be emphasized to ensure the fact that the sample is totally random. Here the problem lies because no matter what criterion is used to select the sample there is bound to be some non randomness in the chosen sample. The primary sources of data used for the purpose of this research paper were conducting interviews to the focus group. The focus group included managers from the top logistics companies’ worldwide, research personnel of different research firms, and world bodies such as united nation organization, OECD etc. The following questions were mainly asked What are the emerging trends in logistics industry? What is the future of green logistics? Do they feel that green logistics is costly? If it is so then what improvement is required to bring the costs down? What factors or measures that the government can take so that there is wide implementation of Green logistics? What would be the impact of green logistics on the worldwide transportation system? Where do they see the logistics industry and particularly green logistics 20 years down the line? What are changes that they expect in propulsion technologies will occur as a result of the growth of green logistics? Changes that technology improvement may bring in the field of transportation sector with the growth of green logistics? What changes are likely to be introduced in traffic management in the light of implementation of green logistics? While most of the respondents to the questionnaire were optimistic about the future of green logistics, they said that there is a need from the part of the government to encourage developments in the field. Some of them also said that there is a lack of awareness among the logistics company and the people in general on the benefits of green logistics systems. They suggested that the government must be stricter and conduct awareness campaigns to improve the awareness of green logistics among various related stakeholders. Some of them also suggested the introduction of some form of punitive measures for the companies which did not comply with green logistics systems. Analysis and Findings The research topic is a current area of concern for the research. The main concern of all developments taking place now days or any future development will focus on the central theme of sustainable development. By sustainable development that development is referred to that focuses on present development but does not compromise the needs of the future generation. Any form of development or economic activity must take into consideration the fact that resources are not unlimited. So, all activities must focus on that form of development which helps in resource conservation. If one looks at global population then the common feature that will appear is that the global population is on a boom. With increasing population the demand for the amount of goods being transferred or the amount of goods that needs to be transported is going to increase. It is in this context that green logistics comes into picture. In future the impact of green logistics is to be felt across various sectors. As part of this paper however the impact of green logistics is analyzed from the perspective of transportation and logistics management. The rate of population growth can be judged from the following figure. Population growth (Source: Bixby centre, 2015) Change in technology With the help of technology there is a significant development in green logistic. Fuel consumption is highly influenced by vehicles. The logistic companies have the option to reduce pollutant emission after and before combustion. Technological advancement has contributed to modify the process of pre-combustion which is beneficial. Technology has also paved ways to innovate many alternative fuels for powering freight vehicles in a cost effective method. It helps to reduce environmental pollution. With change in technology logistic company gets traffic information of real time which enhances vehicle routing and facilitates their communication. In green logistics with the help of intelligent freight technologies Transport Company gets the facility of tracking. It can track and monitor its vehicles at any point of time. The companies set up different parameters for vehicle operation. Web based freight portals helps to maintain different data of vehicles like their fuel consumption, pollution level etc which helps the company to take necessary steps for controlling it. Technological advancement contributes in develop effective routes in congested conditions. Improvement of IT communication technology helps in managing traffic and fleet for better logistic service. Efficient management of intermodal freight logistic like marine, rail etc saves a huge amount of fuel energy. Inland network are influenced by advanced service of sea ports. They act as an important point of transshipment. One of the principle modes of freight transport is road mode. Green logistic influences to combine intelligent transport system and alternative fuels for multi modal traffic and long distance transport. Advancement of technology has also played an important role in discovering new routes which helps to reduce pollution and fuel consumptions. It is expected that by various technological innovation will help in growth of green logistic and help to prevent environmental damages. Waste heat utilization Along with utilizing alternative sources of fuel and alternative propulsion technologies an effective means by which green logistics can lead to better transportation is by using the waste heat generated from an internal combustion engine. Modern day combustion engines are only 40% efficient. That is only 40% of the total energy consumed by the combustion engines are actually utilized by the engine to run the vehicle and the rest of the energy is wasted. Out of the total energy consumed about 36% of energy is wasted as heat. If technology is developed to utilize this waste heat, then it will go a long way in energy conservation. This will obviously increase energy efficiency and help in cutting fuel consumption. Cutting in fuel consumption will reduce CO2 production and thus save the environment at the same time. Energy flow in internal combustion engine (Source: Daimler, 2014) Integrating system to monitor and manage goods in transit in real time The future impact that green logistics will have on transit monitoring system will look something like the image given above. All transportation system will be then monitored by satellite monitoring system in real time and then controlled so as to clear congestion. The route planning for an individual transport vehicle can then be accomplished so as to plan for the vehicle shortest route to avoid congestion. The traffic monitors can monitor the congestion in different routes and then alter vehicle paths so as to reduce congestion. All of these activities can be done centrally with data inputs to come from satellite and other surveillance and monitoring system. The cost of congestion worldwide is estimated in the following figure. By being able to effectively monitor and reduce congestion a lot of savings can be generated in addition to the fact that it will lead to better protection of environment and better management of time. An additional thing that can be implemented with the advancement of technology is better provision and enabling of communication within the vehicles. Cost of road congestion (Source: Inrix, 2014) The enabling and installation of better communication facilities and improved surveillance will ensure that different vehicles will be able to communicate amongst them and with a central traffic control system. The facilitation of better communication between the vehicles and the central traffic control system will help the individual vehicles better plan the routes on which they would travel. This system will also help in providing assistance to the vehicle in distress. Better monitoring can be facilitated by utilization of technologies such as radar system, video camera to provide video surveillance, satellite tracking system, infrared systems etc. As a next step to the development, automatic driving system can be developed. One example of this can be an automated truck convoy. In this convoy will have a driver and he will drive the entire convoy. The truck he will drive will be connected to all other trucks in the convoy. The rest of the trucks in the convoy will maintain equidistance from each other while being in sync with the first truck. The first truck will only have a driver and rest of the trucks will just follow the queue. The rest of the trucks can have a trained staff that will interfere when there is an emergency situation. Alternative propulsion technology It is a well known fact that petrol or diesel comprise or represent those forms or sources of energy which are non-renewable or has limited stock. These sources of energy cannot be replenished when they are finished. So the focus will be to develop alternate sources of energy or technology that utilize alternate sources of energy in order to power the vehicles. Some of the alternative sources of energy and the different kinds of combustion engines are listed below. CNG or LPG driven vehicles Use of compressed natural gas or liquefied petroleum gas as an alternate source of fuel can reduce the amount of carbon dioxide generated. CNG or LPG as alternate sources of fuel can reduce environment pollution to a great extent. However there exists a problem with CNG or LPG as sources of fuel. Vehicles running on CNG or LPG can run only for about 400km in the current technology. To circumvent these problem additional tanks can be provided so that the distance that the vehicles can travel before refueling is required is increased to a minimum of 1000km. Another factor that can motivate users to use more of CNG and LPG is by creating more no. of fuel stations who will sell CNG or LPG. LPG is the gas in liquefied form. So it will take less space than CNG as storing space. LPG thus will require less space and thus less storage space as compared to CNG. LPG and CNG are promoted as alternate sources of energy as because these sources of energy will last longer than the conventional sources of energy. Hybrid technologies Another alternative that can be developed and is in the process of development over many years is using hybrid technologies to power cars. Use of hybrid technologies means utilization of a combination of conventional and unconventional source of energy to power the vehicles. Conventional sources of energy include such sources as petrol, Diesel etc. Unconventional sources of energy can include solar, or other renewable sources of energy. Unconventional source of energy can also mean using a mix of petrol and battery power to drive vehicles. Some of the vehicles using hybrid technologies consist of a switching system that the driver can use to switch between the two sources of power. For other vehicles the system of transition between the two alternate sources of power is automatic. In some vehicles and some trains the system is such that it is normally powered by battery and the diesel system is only used to recharge the batteries when the battery looses charge. Solar driven vehicles In some of the vehicles the technology used is solar power. When solar power is used to power the vehicles there is no pollution. Solar power is an abundant source of power that is available and using solar power to power vehicles will obviously result in 0 co2 production as output. The current technology needs a lot of improvement before solar can be used as the only source to power a vehicle. Hydrogen Hydrogen can be used as an alternative fuel to power vehicle. The advantage of Hydrogen is that it is abundantly available and the exhaust that a hydrogen power vehicle generates is only water and so it does not have any impact on the environment. However, the problem with hydrogen is that it is very much combustible. So there are researches that are going on in the field to find a solution to the problem. Conclusion Logistics refers to the integrated management of different activities that are required to shift products through the supply chain. For a particular product the supply chain extends and includes all activities that start from the procurement of raw material at the source and transporting the same to production facilities, after production of the final product distributing it all the way to the final customer. If there is a warranty or replaceable clause attached with the product then the logistics also includes reverse logistics in the form of the logistic chain from the customers back to the warehouse and finally to the production centers. The various activities that are part of logistics are freight transportation, inventory management, material handling, storage of the goods etc. Green logistics refers to the doing of the various tasks or activities of logistics in a sustainable way so that it has minimal impact on the environment. Green logistics is important to consider in today’s perspective as the present generation is obsessed with sustainability. Sustainability becomes all the more important when we appreciate the fact that we are sitting on a pile of resources and environment that is degrading and deteriorating at an accelerated rate. The fact is evident from the data that all the coal resources available with us will last for another 30 years. Petrol will also not last long and eventually will get depleted. The question that arises then what wills our future generation does in such a perspective. How will they sustain themselves? Combining this with the fact the world population is increasing at a tremendous rate that is creating greater pressure on the available resources. Another factor that needs to be considered is the fact that transportation sector is the one that contributes maximum to global pollution levels. Green logistics becomes very important to consider keeping the above perspective in mind. Green logistic has an impact on societal, environmental and economic factors. In this research paper the impact of green logistics on the transportation industry is gauged. To gauge the impact the first step that has been followed is the use of secondary research data in the field to know the view points of other researchers. As a next step primary research is undertaken and data is compiled from a variety of sources through questionnaire of key personnel in the industry and academic field to understand what do they feel as to the future of logistics and in particular green logistics is concerned. It is found through the research that most of the people from university and academia agree to the point of view that green logistics will play a dominating role in future. It will have a major impact on various factors of transportation sector and will shape transportation sector in a big way. Some of the impacts would be in the form of introduction of better technologies, alternate propulsion technology, managing traffic etc. References Bixby centre, (2015). Global Population. Retrieved from: http://bixby.berkeley.edu/research/population/ Daimler, (2014). Visions of the future: transportation and logistics 2030. Retrieved from: https://www.dbschenker.in/file/7923390/data/Visions_of_the_Future_2030.pdf Inrix, (2014). Economic & Environmental Impact of Traffic Congestion in Europe & the US. Retrieved from: http://www.inrix.com/economic-environment-cost-congestion/ McKinnon. A, Browne, M and Whiteing, A., (2012). Green Logistics: Improving the Environmental Sustainability of Logistics. London: Kogan Page Publishers. Murphy, P. R. and Poist, R. F. (2000). Green logistics strategies: an analysis of usage patterns. Transportation Journal. 8(2). pp 5-16. Piecyk. M.I. and McKinnon. A.C.. ( 2009). Environmental Impact of Road Freight Transport in 2020. Edinburgh: Logistics Research Centre. Ryley,T and Chapman, L., (2012). Transport and Climate Change. Bingley: Emerald Group Publishing. Streichfuss. M, Wieck, I. Stölzle. W and Wissing. T., (2011). Switchpoints for the Future of Logistics: A Study. Germany: Springer Science & Business Media. Ulas, A., (2014). Handbook of Research on Developing Sustainable Value in Economics, Finance, and Marketing. Hershey: IGI Global. Read More