Chapter 14 Sustainable Logistics and Supply Chain Systems Professor : Lyu Ph.D Student：Mira

Introduction Look beyond how logistics and SCM can influence organizational success and to consider the issue of sustainability as it applies to logistics and SCM “Green “ issues Economic sustainability Reverse logistics

Learning objectives Understand what sustainability involves in the context of logistics and SCM Understand key terms such as carbon footprints, food miles, reverse logistics, etc Illustrate best practice examples of attempts to reduce environmental footprints Understand the link that exists between growth in logistics and concomitant growth in the demand for transport Examine the different aspects of the two key dimensions used in logistics to reduce environmental impacts, namely scale and efficiency Explain the different aspects of reverse logistics

Sustainability Sustainability to include environmental management, close-loop supply chain and a broad perspective on triple-bottom-line(3BL) Sustainable logistics is concerned with reducing the environmental and other disbenefits associated with the movement of freight

triple-bottom-line(3BL) An criteria for measuring organizational success: economic, environment and social People, Planet and Profit are used to concisely describe the triple bottom line and the goal of sustainability The triple bottom line (or "TBL", "3BL", or "people, planet, profit") captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic, ecological and social.三重基線包括 財務基線 (financial bottom line)、 環境基線 (environmental bottom line) 及 社會基線 (social bottom line) Bearable equitable viable

Five core section The green revolution and supply chain redesign The link between economic growth and transport growth The role of scale in logistics and SCM Efficiency solutions Reverse logistics

Green Revolution The international Kyoto Protocol has called for a 60% reduction in carbon emissions by 2050 Carbon footprint: the environmental disbenefits associated with economic activities such as the movement of freight http://www.carbonfootprint.com/index.html Food miles: the distance by which the various components of a particular food item have to travel before final consumption http://www.food-mileage.com/calculator/ http://www.youtube.com/watch?v=m7JlaHeZnP0 今天吃一個漢堡，夾在漢堡裏的肉，是從美國坐飛機來的，肉上的洋蔥，是從嘉義坐大卡車來的，送的玩具，則是中國製造坐船來的。於是你就得把背後這些碳全都相加，最後就得出吃下這個漢堡的碳足跡。在國外有研究發現，一個漢堡的碳足跡，約為3.1公斤的二氧化碳。 Discribe calculator

The drivers behind the increased emphasis on green issues Cost Reduction Legislation summarises Social Responsibility Market pressure

Supply chain redesign ‘Greening’ the supply chain: Largely about forward planning Over 80% of carbon savings are only achievable at the supply chain design stage, e.g.: deciding where to locate warehouses and distribution centres deciding which transport modes to use reconfiguring distribution networks so as replace small deliveries direct to all end customers with centralised deliveries to a hub from where end customers retrieve their goods

Sustainable logistics and SCM Three ways in which to improve the sustainability of logistics and supply chain system Redesigning supply chain Supply chain redesign Energy bill loyalty conclude juncture in effect negative load mutually exclusive sensitive Promoting scale Enhancing efficiency Using scale to use the negative environmental effects of logistics activities Promoting various efficiency solutions

The link between economic growth and transport growth There is an closely link between economic growth and transport i.e. as economies grow, more transport is required to move the freight that economic growth inevitably generates A core issue for policy makers is to endeavour to decouple economic growth and transport growth i.e. to find ways of allowing economic growth without comparable growth in transport Feature essential

The role of scale in logistics and SCM If all the containers in the world were lined up, it would create a container wall with a length of 108,000 kilometres i.e.2.7 times around the earth at the equator The volume of freight that can be held in one standard forty foot container is quite significant: 200 dishwashers, 350 bicycles or 5,000 pairs of jeans The shipping cost per unit is thus quite low: Maersk estimate for freight coming from Asia to Europe it costs £9 per dishwasher, £5 per bicycle and just £0.35 per pair of jeans Subsidiaries container vessels equivalent TEUs widespread inaugural environmentally taxation volume significant hold in ply inevitable deleterious Emma Mærsk was the largest container ship Fraction dra material labor raw standpoi facilitatent consequence

The role of scale in logistics and SCM Only certain ports can handle ultra large vessels There is growing traffic concentration at certain other ports Increasingly, many mid-sized ports are playing a feeder role to the very large ports as hub and spoke networks In these networks the larger vessels ply between the major transhipment hubs The prosperity of the smaller ports is increasingly dependent on the route strategies of the major shipping lines

Efficiency solutions Many logistics operators are seeking efficiencies with how they move and store freight so as to reduce the environmental impact of their activities The supply chain strategy can impact the efficiency of the transport services demanded , ex JIT system Table 14.1 lists some of the many ways in which logistics efficiencies can be generated, and simultaneous environmental penalties reduce , in the case of road haulage Haulage centric insight road maritime penalize spurred restricted movement

Table 14.1 Improving Road Haulage Logistics Efficiency and Reducing Environmental Penalties Reducing empty running, pooling and sharing capacity, obtaining ‘backhaul’ loads (a number of websites have been developed that match carriers who have available capacity with shippers seeking capacity – see the case below on electronic logistics markets). Increasing vehicle payload capacity (by weight and/or by cubic volume) – double deck and higher trailers, single tractor unit and multiple trailer combinations, etc. Improved vehicle routing using GPS and other systems More efficient use of packaging and loading of containers. Improved vehicle driving (in-cab computer monitoring of driving style, even examining the benefits of air conditioning versus open windows!). Enhancing vehicle operating efficiency (for example using hybrid fuels, ensuring correct wheel alignment and enhanced aerodynamic styling of trucks).

Reverse logistics Reverse logistics encompasses a number of streams of activity: Return of end of life products Return of defective, damaged and unwanted products Return of packaging and recovery of returnable equipment such as containers, pallets and barrels Closed loop supply chains: those which also comprise reverse / return flows

Closed-loop supply chain Material Supply Component Manufacturing Assembly or Re-assembly Distribution Repair User Recycle Remanufacturing Reuse Material Recovery Disassembly Inspection Separation Collection shows the structure of a typical closed-loop supply chain The flow of reverse logistics is drawn in the figure with solid lines while the forward flow delineated with dashed lines. It also depicts the main processing options in reverse logistics, which are reuse, repair, remanufacturing, recycling and disposal Disposal Waste Disposal

Green product design It is at the product design stage that the most contribution can be made towards reducing a products environmental footprint This is sometimes referred to as green product design

Comparison of reverse logistic and green logistics Packaging reduction Air & noise emissions Environmental impact Recycling Remanufacturing Reusable packaging Production returns Marketing returns Secondary markets Recycling Remanufacturing Reusable packaging Comparison of reverse logistic and green logistics Fig.3 gives a comparison between reverse logistics and green logistics the differences and the overlap between the two conceptions are presented in the figure. The overlap means there are some activities applied both to reverse logistics and to green logistics, such as recycling, remanufacturing and reusable packaging Reverse logistics differs from green supply chain as the latter concentrates on environmental impact of all logistics activities especially the activities involved in traditional forward logistics [8]. The environmental issues in green logistics are reduced consumption of natural resources, air emissions, congestion and road usage, noise pollution, and both hazardous and non-hazardous waste disposal. So green logistics investigate supply chain with respects to environmental and ecological activities while reverse logistics emphasizes more on the profitability of strategic recovery options. The overlap means there are some activities applied both to reverse logistics and to green logistics Green logistics investigate supply chain with respects to environmental and ecological activities while reverse logistics emphasizes more on the profitability of strategic recovery options

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