Chapter 14 Sustainable Logistics and Supply Chain Systems

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Chapter 14Sustainable Logistics and Supply Chain
Systems

• Professor Lyu Ph.D
• StudentMira

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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
Cost Reduction
Legislation
Social Responsibility
Market pressure
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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

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

Supply chain redesign
Promoting scale
Enhancing efficiency
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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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
Component Manufacturing
Assembly or Re-assembly
Distribution
Repair
User
Recycle
Remanufacturing
Reuse
Inspection Separation
Collection
Disassembly
Material Recovery
Disposal
Waste 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

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