The definition of logistical sustainability
1. The definition of logistical sustainability
Sustainable supply chain management
2.0. Sustainable supply chain management
Sustainable logistics goals and roles
2. 3.0. Sustainable logistics goals and roles
Sustainable logistics management
3. 4.0. Sustainable logistics management
Possible logistical sustainability problems and concerns
4. 5.0. Possible logistical sustainability problems and concerns
Industry examples
5. 6.0. Industry examples
Global supply chain as the overarching backdrop
6. 7.0. Global supply chain as the overarching backdrop
References
Report on Logistics
1.0. What Does Sustainable Logistics Mean?
Sustainability logistics is defined as "a planned and methodical approach aimed at lowering the environmental effect of a company's activities by enhancing process efficiency and reducing energy, water, and fossil fuel use when providing transport and logistics services” (Koger, 2013). The law provides numerous avenues that cover pollution control, emission, and noise including the Regulation (EC) No 715/2007, Aviation Directive 2008/101/EC and EU Emissions Trading Directive 2003/87/EC (Abanda, 2017).
In the past sustainability was connected with a business a situation which was completely different. Various institutions have been seen investing in innovativeness and sustainable technology to decrease the impact of the environment as a hit on the bottom. It is not, however, the case as sustainability tends to drive efficiency, and it is entirely true in the supply chain logistics. An institution or an individual doesn’t need to sacrifice profitability at the option of achieving logistics; the two are aimed to go hand in hand (Chew, Lee, and Tang, 2011).
2.0. Sustainable Supply Chain Management
It refers to the management of economic, environmental, social impact, and the advocacy of respectable leadership practices, through the life cycle of services and products. The major function of sustainability aims at growing, protecting, and create abiding environmental economic and social values for all the stakeholders who take part in availing services and products to the consumers.
Sustainability has three major pillars that have been recognized. They are economic, social, and environmental issues which are also referred to as profit, planet, and people (Kashmanian, 2015). If any of these pillars is missing, the sustainability is not possible. The supply chain, in this case, is the business issue that affects the logistic network regarding waste, risk, and environmental costs. Currently, there is a growing demand for business to include sound choices into the supply chain management. Sustainability is taken to be the essential tool that will aid in delivering long-term profitability and has done away with speed, value, costs, and monetary costs as the main topics of discussion among supply and purchasing professionals. A sustainable supply chain directly offers a significant competitive advantage and seizes high value of technology that provides a great offers competitive advantage to processing innovators and even adapters (Drake, 2012).
2.1 Transportation
Currently the world has been interconnected by the use of internet and social media a fact that has raised the customer expectations on faster commodity delivery. Coming up with a logistic strategies that can tackle customers’ needs demands the company to take into account things like transport and a sophisticated software network that will enhance acquisition orders.
2.2 Inventory holding and/or replenishment goals
The major decision in service industry, retail and manufacturing is the quantity of inventory that is kept as hand, companies such as Coca-Cola and Pepsi need stock to facilitate a smooth distribution of commodities to the expansive market. For such companies the moment the inventory level are established, they develop into an important contributor to the budgeting system. Stock involves striking a balance between shortage, holding and ordering costs.
2.3 Roles of information system in logistics
IT or information technology continues to be an integrated processes in the supply chains of almost all industries in the world. As the world continues to shrink and the state of technology becomes advanced. Information is an important component in improving the supply chain. In the manufacturing industry, in companies such as Amazon IT has enhanced a collaboration and communication with suppliers of products worldwide. IT has also facilitated the synchronization of the flow of batch production by simply monitoring the flow of commodities. It has also optimized the production by cutting down on costs of production.
3.0. Goals and Roles of Sustainable Logistics
Any business attained to logistical sustainability has maintained humility. The management has to accept that the company cannot do it alone. Broad collaboration and partnership are crucial to solving the biggest environmental challenges that businesses face. Sustainability is both an opportunity and responsibility to secure the business and society’s future. A company should embrace a ‘learn and do’ mindset and should be willing to invest currently and in future which symbolizes the unity between a good business and supply chain. There is no compromise between sustainable profitability and logistics. Therefore, there is no argument on why it should not be done (Maltz, 2012).
Along with increasing dynamics, diversity and environmental issues which come on the top of the list, the world has been systematically transforming, and the institutions have to cope with new situations for several years. The economic, social, and political systems tend to demand a sustainable development force that will reduce the impacts on the surrounding. There is, therefore, a strong connection between environment, natural resources, and logistics (Matthews et al., 2015).
Many organizations have ascertained the sustainability in the supply chain of their organization, and, therefore, they are also unable to extend the evaluation to customers and suppliers. This factor makes tough to estimate the actual environmental cost, and it reduces the ability to remove waste from the supply chain. However, due to the research, it is possible to define the supply chain sustainability and benchmarking tools which have also been made available to enable the concerned parties to create and implement a sustainable action plan. One of the critical elements of a sustainable supply chain is the collaboration (Pagell, Krause and Klassen, 2008). Through collaboration the companies are in a position of reducing environmentally and cost impacts on the deliveries they make. Collaboration is, however, not quite famous because the companies fear loss of control by working with others.
4.0. Managing Sustainable Logistics
Sustainability is one of the biggest goals that persons aim at this century. All the organizations from governmental to business ones have the civic primary goal - to add value from the limited resources. The financial growth can be realized in the long run when organizations realign their strategies so that they become socially and ecologically sustainable.
A company can manage sustainability by training its employees to be flexible and change the functions of the organization as they evolve. An environment that is carbon constrained will always affect the business in the long run. A flexible environment can provide an organization with a competitive advantage over other firms. The correct regulation can help an organization find what is right for them. If a firm can do a good job managing production processes and factory inputs and defining the right commodity to be produced. Then such an institution will be more efficient, and in the long-term, it will pay a sustainable dividend to the environment and the company (Abanda, 2012).
Making a viable concept operational is a big challenge. One is prone to making ideas that are vague operational, there will be no clear metrics, and the regulations might be absent. When it comes to sustainability logistics, it is even a greater challenge. Sustainability logistics will only come to age when action and environmental awareness are not just acts of self-sacrifice but are integral to the successful operation of an organization in the society. Long-term sustainability only comes when an organization is careful with both natural resources and humans, by doing, so their products and production processes will go beyond the factory gates (Conard, 2013).
5.0. Potential Challenges to Logistics sustainability and considerations
Any corporate sustainability initiative should lay its focus on its impact three things; profit, planet, and people. This concept is referred to as the triple effect, and it known to shape the environmental efforts of any institution worldwide. The three greatest sustainability challenges include developing metrics to assess the initiatives; coming up with those metrics can be a difficult task. The risks of failing to provide for a new sustainable world are not also fully understood. However, many companies have understood that climatic changes and water supply shortages could have a significant cost if disaster strikes. The second challenge is making the business case. Often the rhetoric that surrounds sustainability is the increase in business costs that are later on passed to consumers. Moreover, the exact opposite is also true. When a company increases efficiency whether in the operational resources, energy usage or at some point during the supply chain it results in decreased cost while creating a more efficient and sustainable institution. The last challenge comes about engaging colleagues and management. Encouraging employees to introduce logistics sustainability can be a great challenge that requires patience a company can also use unilateral communication and incentives so that employees are invited to participate in this process. The companies should put in place that will enable it to monitor employee’s engagement.
6.0. Industry examples
Walmart is one of the enterprises of the world attributes that sustainability’s best practices are part of the company’s supply chain DNA. Walmart is one of the businesses that distinguishes itself from a separate herd and introduces itself through company’s capacity to change the marketplace, innovation, vision, and leadership. Walmart has created a business case that supports sustainability which infiltrates all the parts of the company and extends to the customers and suppliers. Back in 2009, Walmart made a statement that it was a sustainable index which could be analyzed according to the supplier’s performance. The Walmart’s green strategy is organized in a centralized manner; it has a clear roadmap of exactly where it aims at to be. For instance, the company aims at procuring 7 billion kilowatts of renewable electricity each year (‘Green Logistics The Walmart Way - Inbound Logistics’).
Microsoft is another company that exists in the software industry which values logical sustainability. The company utilizes the lifecycle assessment for determining the impacts which they produce on the environment. The company conducts its calculations by the use of the entire product cycle from the point of time when the material is acquired to the end of the product life. Microsoft Inc. uses these calculations to reduce environmental impact because it guides in decision making. The calculation of the life cycle assessment can be utilized internally to identify the critical stages in the life cycle of products, for example, the action that should be taken to minimize that impacts and the largest source of emissions. The company with the intention of making the planet has published material composition, primary energy consumption and Greenhouse gas emission data on all its products.
Boeing Inc. is the largest aerospace company that manufactures security systems, defense space, and commercial airlines. Five years ago, the company reduces its footprints on the environment while at the same time improving its businesses. The company targets to operate at absolute Zero carbon dioxide, zero adjusted revenue in hazardous material, and zero solid waste sent to the lands and zero water intake. The company is working on new technology that will extend beyond the walls of the company and leave the next generation more fuel efficient, quieter and cleaner (Green Technologies, 2010). The company advocates for recycling of old planes which reduce waste. It has also partnered with the University of Nottingham, England with an objective of coming up with carbon fiber recycling technology and processes. The company won a Crystal Cabin Award for manufacturing aircraft that are recyclable (‘Boeing: 2014 Environment Report’).
7.0. Global supply chain as the overarching context
Over the past decades, most businesses around the world have become global. Globalization has created newer markets and also presented a major challenge for the supply chain managers who often strive to achieve the innovation standard, responsiveness, cost cash, quality, and desired customers services. The problems that emanate from global supply chain are not new, they have been particularly dynamic with the emergence of economic opportunities in developing countries (Frazzon, 2009). The global supply chain face numerous challenges due to the uncertainties which exist in this setup and has an adverse implication on the particular firm’s performance. Some examples of the risks, which are associated with global supply chain, include terrorism, weather or natural disasters, environmental requirements and regulatory, security problems, and supply shortages (Gereffi and Lee, 2012).
The issues which surround the global supply chain strategies are often structural in nature and involve making decisions on whether to open a retail center, locate a manufacturing facility, or where to source material from. For example, a decision on whether to source material from a particular place is always accompanied by eliminating the material from the available sources. The decision cannot be reversed easily if the new offshore does not meet the anticipated expectations. Due to this reason, some of the company’s strategies places greater emphasis on the importance of the of the global chain management (Hsuan et al., 2015). Building an efficient global supply chain is a difficult task because it raises the consumer’s expectations on customer service and product quality. There are numerous environmental concerns, some government rules and regulations which tend to disrupt the system. All supply chain professionals ought to be armed with a solid global supply chain strategy so as to handle all the challenges that emerge and keep the business going.
References
Abanda, N. (2017). Acknowledgment to Reviewers of Sustainability in 2016. Sustainability, vol. 9, no. 1, p.90.
Boeing.com. (2017). Boeing: 2014 Environment Report. [online] Available at: http://www.boeing.com/aboutus/environment/environment_report_14/ [Accessed 10 Mar. 2017].
Chew, E., Lee, L. and Tang, L. (2011). Advances in Maritime Logistics and Supply Chain Systems. Singapore: World Scientific.
Conard, B. (2013). Some Challenges to Sustainability. Sustainability, vol. 5, no.8, pp.3368-3381.
Drake, M. (2012). Global Supply Chain Management. 1st ed. New York: Business Expert Press.
Frazzon, E. (2009). Sustainability and Effectiveness in Global Logistic Systems. Berlin: Gito.
Gereffi, G. and Lee, J. (2012). Why the World Suddenly Cares About Global Supply Chains. Journal of Supply Chain Management, vol.48, no.3, pp.24-32.
Green Technologies. (2010). New York: IGI Global.
Hsuan, J., Skjott Larsen, T., Kinra, A. and Kotzab, H. (2015). Managing the global supply chain. 1st ed. Frederiksberg: CBS Press.
Inboundlogistics.com. (2017). Green Logistics The Walmart Way - Inbound Logistics. [online] Available at: http://www.inboundlogistics.com/cms/article/green-logistics-the-walmart-way/ [Accessed 10 Mar. 2017].
Kashmanian, R. (2015). Building a Sustainable Supply Chain: Key Elements. Environmental Quality Management, vol. 24, no.3, pp.17-41.
Koger, S. (2013). Psychological and Behavioral Aspects of Sustainability. Sustainability, vol. 5, no. 7, pp.3006-3008.
Maltz, A. (2012). Global Supply Chains: Other Voices. Journal of Supply Chain Management, vol. 48, no. 3, pp.3-6.
Matthews, L., Power, D., Touboulic, A. and Marques, L. (2015). Building Bridges: Toward Alternative Theory of Sustainable Supply Chain Management. Journal of Supply Chain Management, vol. 52, no. 1, pp.82-94.
Pagell, M., Krause, D. and Klassen, R. (2008). Sustainable Supply Chain Management: Theory and Practice. The Journal of Supply Chain Management, vol. 44, no. 1, pp.85-85.
Grober, U. (2012). Sustainability. Totnes: Green Books.
