Green Logistics: A Sustainable Solution for Supply Chain Integration

Green Logistics is a sustainable approach to the integration of transportation and the supply chain of an organization. This concept first emerged in the 1990’s when standard logistic infrastructure had a significantly negative impact on the global environment such as air-pollution, noise pollution, climate change, accidents and congestions from freight traffic. The solution to all these problems is adopting greener measures and developing sustainable logistics.

However, there are paradoxes of green logistics that make it difficult to be implemented. These include the conflict in objectives of different parties.

For example, a company’s objective will be growth and profit maximization while an environmental objective would be to reduce the external costs. Both these objectives are in conflict because what is profitable for the firm such as air transportation has a negative impact on the environment. However, if all the involved parties find a balance between the objectives, implementing it can be easier.

There are three approaches to implementation; the top-down approach where the government imposes greener regulations on the industry, the bottom-up approach where industry itself adopts greener measures because it may be profitable for them and the third approach is the compromise approach which balances both the approaches mentioned earlier.

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The implementation of Green Logistics is also evident in a lot of countries such as the automated Truck Toll System developed in Germany. Finally, this topic is important for logicians because it helps them to see the areas that they need to improve on.

It helps them to see that sustainability could lead to profitability and it helps them to realize the differences in objectives between different parties and maintaining a balance between them.

No matter what approach is used, the end-result should be desirable for all parties involved which means that transportation as well as external costs must both decrease. Green Logistics and the Effects Our Growing Logistics Technologies and Infrastructure Have on Our Global Environment Introduction

Logistics is the process of moving products through the supply chain from the procurement of raw-material to the point of consumption (Green Logistics, 2009). Green logistics is to carry out this same process in a more sustainable manner. The overall costs, including external costs, have to be reduced while meeting customer requirements. The purpose of this paper is to enlighten the readers about green and sustainable logistics. It is also written to put light on the effects that regular logistics technologies have on our environment.

This topic might be of interest to businesses because in recent times, each and every manufacturing firm essentially has to have some kind of logistics. Some businesses are advanced and automate this through Supply Chain Management while some still do it simply. Discussion Green logistics is increasingly becoming popular today as people rather customers are becoming aware of the environment and the effects and causes of its depletion. Environmental degradation has become a growing concern and to counter this sustainability must be achieved in every transaction a firm carries out be it replacing its furniture.

The logistics of a firm is an important area and function. In most firms today, it is characterized as a different function along with sales and marketing, finance, production, human resources, etc. Therefore, achieving or at the very least attempting sustainability in this function is an obligation. The activities involved in a regular logistic process involve freight transport, storage, inventory management, materials handling, and relevant information processing (Green Logistics, 2009). It is easy to see that there is much potential for sustainability in these activities.

For instance, freight transport can be made ‘greener’ by using environment-friendly fuel products/brands. Organizations must now become more conscious of their logistics. They must take into account the external costs involved in moving about products. Some of these are the accidents that take place with heavy traffic, the air-pollution caused by the burning up of fossil fuels, noise pollution, and much more. To see how green logistics can be useful for companies, customers, and the environment, we first have to study the effects that regular logistics technologies and infrastructure has on our global environment.

Once these have been studies, it will be easy to see why ‘green logistics’ is the ideal solution and an alternative transport means. Effects of Growing Logistics Technologies and Infrastructure on the Environment Products are moved around from one point to another through transportation and the most common mode used is freight carriers. These provide companies with better transportation facilities and more importantly, cost reductions. This is why these modes are the optimal logistics choice. However, this form of urban logistics has caused congestion in the cities.

There are already growing concerns regarding regular traffic. To add to this, heavy traffic has now become a part of it, making the situation even worse. In addition to congestion, heavy traffic gives rise to two kinds of pollution; air-pollution and noise pollution. Air-pollution is a bigger concern because the CO2 emissions, NOx, Particulate Matter and other airborne pollutants from these freights degrade the environment greatly. The burning up of fossil fuels fills the air with carbon dioxide which is not fit for humans. The ultimate effect of this is thought to be global warming, which means a climate change for everyone.

The noise level also grows as a result of heavy traffic giving rise to increased noise pollution in the cities as well as the suburbs. The progression of urban logistics and the use of heavy vehicles as a mode have also led to a greater number of accidents. These vehicles are more prone to accidents than other modes of transport such as personal vehicles. The reasons for this are the size of the vehicle itself, the lack of sleep and the fatigue levels of drivers are high, and in some countries, road infrastructure is not ideal. Materials handling is also a logistical activity.

In handling the materials, company must not carry out activities that cause any kind of pollution. For example, the disposal of faulty materials must be appropriate such that it should not be disposed off in rivers or other areas where they can be nuisance to the environment. Green Logistics, a Solution The development of logistics technology and infrastructure, as seen above, has a number of drawbacks, for no one else but the environment. Since the environment is important to a large number of people and organizations today, the problem with existing transportation means is big.

Therefore, companies must find a way to integrate transportation and meet customer requirements in a sustainable manner. This leads us to ‘green logistics’. This concept was first developed in the 1990s. It went beyond the standard concept of logistics and took into account a deeper concern, that of the environment (Gerolaminis, 2005). It was a whole new approach in its own sense. Companies were willing to adopt it also because of the good will, the brand image and the goodness in general it brought with it. The Paradox

This approach of ‘green logistics’ seemed like the perfect solution to all the problems of standard transportation and logistics. However, it was plain to see that it brought with it many inconsistencies in objectives and hence, a paradox. Companies used regular transportation means to logistics because they would meet customer requirement, carry out the task as required and at minimum cost. When, in contrast, a greener approach is followed, costs go up significantly. The ultimate objective of an organization, which is profit maximization, becomes inconsistent. On the other side of the picture, sustainability is achieved.

If however, profits due to cost reductions and regular transportation means were achieved, then sustainability would no have been achieved. To say it simply, there must be a tradeoff between the both; the company’s and the societal and environmental objectives. Only one can fully be achieved at a time. Companies, however, can strive to find a balance between the both and follow an approach that is better for both parties to an extent. Figure 1. Balancing Economical, Societal and Environmental Objectives (Green Logistics, 2009) To be more specific, there are smaller paradoxes in the following areas: 1.

Cost Transport costs must ideally be reduced as a result of effective logistics. These costs, however are reduced by using means, such as heavy vehicles, that are in conflict with the environment. The benefits from these strategies are realized by the firms as well as consumers (in the form of lower prices) but the costs to the environment are externalized. This is the paradox between reduction in cost and sustainability. 2. Time/ Speed Time and speed of the transportation in logistics is enhanced by using technologies and infrastructure such as the most polluting vehicles such as air freight and trucks.

These, again, are in variance with the environment. The effects of them have been shown earlier also. This is another paradox that green logistics brings about. 3. Reliability Service reliability is paramount to any integrated transportation system. This system will only be successful if it has delivered the product on time and with minimal damage. Therefore, those modes of transportation are used that are most reliable such as air freight. Ship or rail, on the other hand are least polluting means but are also the least reliable (Rodrigue et al, 2008). In other words, either a mode is polluting or it is unreliable.

In both cases, some one will have to suffer. This is the reliability paradox. 4. Warehousing Warehousing is a cost to any business. An organization never wants too much inventory at one time. Therefore, there must always be a flow. To manage inventory efficiently through logistics, it must be in transit or on the road. This again increases congestions, pollution and accidents on the road. The environment then assumes this as an external cost, for obvious reasons. This is hence the paradox in warehousing. 5. E-commerce This is a fast growing trend in retail today. E-commerce is basically buying and selling online.

Customers buy online from sellers and pay online as well. E-commerce gives the impression that there is less logistical activity in the process. In reality, however, the background logistics are intense. They might even be more intense than physical retail logistics. These online vendors rely on parcel-shipping companies like UPS to deliver goods and these in turn rely solely on air and truck transportation (Rodrigue et al, 2008). Again, this is a paradoxical circumstance. All these smaller paradoxes are summarized in the table below, with an addition of a paradox in the logistics network also.