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Chapter 14Sustainable Logistics and Supply

Chain Systems

Professor : Lyu Ph.D

Student ： Mira

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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

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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

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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

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triple-bottom-line(3BL) People, Planet and Profit are used to

concisely describe the triple bottom line and the goal of sustainability

An criteria for measuring organizational success: economic, environment and social

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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

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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/

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The drivers behind the increased emphasis on green issues

Legislation

Market pressure

Social Responsibility

CostReduction

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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

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Sustainable logistics and SCM

Supply chain redesign

Promoting scale Enhancing efficiency

Three ways in which to improve the sustainability of logistics and supply chain system

Redesigning supply chain

Using scale to use the negative environmental effects of logistics activities

Promoting various efficiency solutions

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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

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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

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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

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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

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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).

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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

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Closed-loop supply chain

Material Supply

ComponentManufacturing

Assembly orRe-assembly

Distribution

User

CollectionInspectionSeparation

DisassemblyMaterialRecovery

WasteDisposal

Recycle RemanufacturingRepair

Reuse

Disposal

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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

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Comparison of reverse logistic and green logistics

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

Production returns

Marketing returns

Secondary markets

Recycling

Remanufacturing

Reusable packaging

Packaging reduction

Air & noise emissions

Environmental impact

Recycling

Remanufacturing

Reusable packaging

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Thank You for Your Attention