GREEN LOGISTICS

Presenter: Manish Kumar Choudhary Sanjit Kumar Prasad

SLIDE TO SLIDE

Introduction

Concept of green logistics

Blueprint of Green Logistics Paradox of logistics

Green Logistics in Toyota

Application of Green Logistics

I NTRODUCTION

Supply chain management practices and strategies that reduce the environmental and energy footprint of freight distribution. It focuses on material handling, waste management, packaging and transport. The loosely defined term covers several dimensions related to production planning, materials management and physical distribution opening the door to a wide array of potential applications of environmentally friendly strategies along supply chains This implies that different stakeholders could be applying different strategies, all of which being labeled as green logistics.

GREEN LOGISTICS
Recycling Environmental efficiency

Green

Convergence?

Logistics

Distributional efficiency Save time / money

CONT

Externalities of Freight Transportation Methodology

Organization of Options

E XTERNALITIES OF F REIGHT T RANSPORTATION

Economic Impacts 1.Traffic Congestion 2. Resource waste 1. Greenhouse Gases Cause Climate Change 2. The use of non-renewable fossil fuel 3. The effects of waste products such as tires and oil 4. Ecosystem destruction and species extinction 1. Negative public health impacts of pollution 2. Crop destruction 3. Injuries and deaths resulting from traffic accidents 4. Noise 7. Loss of Greenfield sites and open spaces

Ecological Impacts:

Social Impacts:

M ETHODOGY

Current Green Logistics Schemes

Assessment of Environmental Externalities

METHODS

Logistics Optimization Methods -Facility Location -Routing -Scheduling and Management

Impact Analysis (Case Studies) Air Quality Considerations Logistics Companies Implementation Costs

O RGANIZATION

OF

O PTIONS

Social & Economic Activities

Logistic Activities

Emissions

Negative Impacts

Optimize logistics

Reduce emissions

Reduce exposure

Technological and Policy Options

The Environmental Impacts of Logistics Systems and Options for Mitigation

Effect on Externalities
I. Impact Considerations

Application Types
A. Impact Assessment B. Policies and Projects

Options/Considerations
1. Exposure Metrics 1. Diversion based on location 2. Diversion based on timing 1. Employee Training 2. Equipment Condition 1. Fuel Efficiency 3. Combustion Improvements 1. Vehicle Standards 2. Fuel Standards 1. Intelligent Routing Systems 3. Online B2B Coordination 1. Vehicle Utilization 2. Intermodal Options 1. Terminals 2. Pavement Characteristics 1. Load Factor Requirements 3. Zonal Designations 5. Taxation 1. Goods Characteristics 2. Geography 3. Cultural 2. Weight Regulations 4. Temporal Restrictions 6. Market Creation 2. Real-Time Traffic Information 2. Fuel Changes 4. Post-Combustion Controls

II. Emissions Reduction

A. Industry Practices B. Technologies C. Government Policies

III. Affecting Operations

A. Technologies B. Operations C. Public Projects D. Government Policies

IV. Economic and Societal Development Considerations

A. Demand

A B LUEPRINT FOR G REEN L OGISTICS

A top-down approach where greenness is imposed on the logistic industry by government policies through regulations

A bottom-up approach where environmental improvements are coming from the industry itself through the adoption of best practices

A compromise between the government and industry, notably through certification schemes.

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P ARADOX
Cost

OF LOGISTIC

Time

Reliability

Warehousing

Information Technologies

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TOYOTA GREEN LOGISTICS

The Toyota 8-Series introduction in 2007 broke new barriers toward clean
emission technology, becoming the Worlds Cleanest Internal Combustion Lift Truck

Toyotas catalytic muffler system coupled with an exclusive closed-loop fuel system design that adjusts and optimizes the air-fuel mixture ratio, results in a very low emission lift truck that produces 70 percent less smog forming emissions than current federal EPA standaard
Toyota has also committed to at least 95% of the truck fleet being upgraded or replaced to EPA 2007 standards, and 50% being upgraded or replaced to meet 2010 standards by 2014. TIEM got Indiana Governors Award for Environmental Excellence for Five Years of Continuous Improvement in 2006 The recognition was due in part to the companys complete elimination of solid waste (a zero landfill facility) and for reducing Hazardous Air Pollutants (HAPs) by 80 percent and Volatile Organic Compounds (VOCs) by 33 percent in both paints and solvents by reformulating the products.

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A PPLICATION

OF

G REEN L OGISTICS

Product design and production planning-The conventional focus of product design and development is the improvement of its commercial and competitive attributes such as price, quality, features and performance. This process is common for electronic goods as each new generation of a product (computers, phones, televisions) is quantitatively and qualitatively better Physical distribution-Concerned about strategies to reduce the environmental impacts of physical distribution, namely the transportation and warehousing processes Material management-Concerned about reducing the environmental impacts related to the manufacturing of goods in all their stages of production along a supply chain Reverse Distribution-concerned about activities and movements related to taking back consumed goods as well as waste to be recycled or discard

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THANK YOU

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H OW WILL LOGISTICS BECOME GREENER ?

Bottom-up, industry action

Technology will improve the situation (to a limit). Fleet management, vehicle efficiencies. Attitudes will change; greenness can become a marketing tool.

Composite solutions

Environmental management and audit systems (EMAS).

Will the logistics industry adopt ISO 14000?

Paradoxical situation

Problems occur at all spatial scales, from the local through to the global, so a political response is inevitable. There are hopeful signs of greener attitudes in the industry.

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THE PARADOXES OF LOGISTICS: COSTS

Driving down distribution costs

Benefits are realised by the users. 1990-2000 (manufacturing sector, % GDP):

Distribution costs declined by around 13%. Inventory costs declined by around 5%.

Environmental costs are externalized

The environment or society at large pay the indirect costs. The logistics industry has largely escaped governmental attempts to charge for externalities.

Numerous subsidies. Trucking is less regulated.

Some estimates put costs as twice the revenue generated by vehicle taxation.

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THE PARADOXES OF LOGISTICS:

% of Products Shipped for Just-inTime Manufacturing
45 40 35 30 25 20 15 10 5 0 1990 1992 1995 2000

TIME / SPEED

Logistics has given rise to two fundamental features of the contemporary economy:

Just-in-Time (JIT). Door-to-Door (DTD).

Cycle time requirements down by 25% between 1990 and 2000.

Both favour use of the least energy efficient modes:

Trucking. Air.

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THE PARADOXES OF LOGISTICS: RELIABILITY

Service reliability is at the heart of logistics

Delivery time. Delivery on-time. Breakage.

Modal reliability

Logistics systems use the modes perceived to be the most reliable:

Trucks and planes.

The most energy-efficient modes are perceived to be the least reliable:

Rail and ships.

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LOGISTICS AND WAREHOUSING

Delivery units for parts

Inventory reduction:

1980: 50% of costs. 1990: 44% of costs. 1999: 36% of costs.

Moving storage units

Assembly and warehousing Delivery units for finished goods

While the manufacturers may achieve economies:

Inventories are in transit. More links are added to the production chain, with more traffic movements added overall. A form of externality.

Moving storage units 19

LOGISTICS AND E-COMMERCE

Supply chain

E-commerce and supply chain management

E-Retailer

Traditional marketing involves consumers going to shopping centres for their purchases. New systems require large distribution centres on the edge of cities from which small parcels are delivered to customers. The system uses the most polluting modes.

Warehousing

Disaggregation of retailing can be expected to lead to more tons/km.

Higher use of packaging, with concomitant increase in waste generation.

Customers 20