Green Logistics Chain Issues - Research Paper Example

Green Logistics Chain and Issues of the of the In this study, green logistics has been explained as an evolving concept in relation to increasing environmental concerns. It is an important function encompassed within modern transportation system. Freight reliability, improved efficiency level and costs are important factors behind such technological developments. A set of environmental friendly paradoxes have been created to justify the different dimensions of green logistics chain. Introduction This research paper shall address the concept of green logistics chain. Logistics is indeed an important function belonging to the framework of modern system of transport. The overall spatial developments and technological advancements have enhanced efficiency, cost, freight reliability, etc. Transportation system causes a great deal of negative impact on environment. This kind of impact has gained significance in current scenario. Logistics is the central component of transportation system. The term “greenness” is utilized for wide array of environmental concerns. It is basically incorporated in order to bring forth environmental compatibility. Greenness in logistics encompasses two important components such as efficient transportation mechanism and an environmental-friendly system. Logistics is a tool used for moving people, raw materials and goods from one location to another. Logistics expansion was greatly supported by trend of globalization. Cost and time elements have ultimately become essential factors in terms of adding value to all segments. Logistics industry has been able to handle many critical issues but there are still certain issues which are not appropriately addressed. These issues are related to pollution, resource depletion and congestion. The green aspect is still missing in context of logistics industry. In this study, focus will be on sustainability of logistics system. Reliability and sustainability issues have resulted into development of green logistics system. Freight transportation in United States accounts for a major portion of carbon dioxide emissions. Background The aim of this research study is to analyze various dimensions of green logistics systems. There are multiple research questions of this particular study such as: What is meant by green logistics? How can we measure usefulness of green logistics? Is green concept total failure or success or both? What is practical implication of return on investment obtained from green logistics? What kind of profits can be acquired on basis of green logistics in real time scenario? Has green logistics been able to sustain over longer period of time? Research objectives of this study can be classified further as stated below- To analyze freight transport issues in United States To identify different aspects related to green logistics system To understand complexity of green logistics with the help of real world examples To evaluate wide array of investment needed in green logistics and its overall benefits Literature Review As per Childhouse and Towill (2003), green logistics is a type of logistics system that is assumed to be social and environmental friendly. Economical functional aspect is also related with green logistics. Green logistics also encompasses various elements to minimize and measure ecological impacts. This concept includes reverse and forward flow of information, services and goods to point of consumption from point of origin. Logistics is considered to be an important function in context of transportation systems. Traditional logistics is closely knitted with forward distribution like inventory management, transport, warehousing and packaging. There is a new segment where logistics is inserted into waste material disposal and recycling (Childhouse and Towill, 2003). According to Klassen and Johnson (2005), green logistics benefit an organization in multiple ways such as reduction in carbon dioxide emissions, enhanced optimization of supply chain, focusing more on cost savings and boosting overall performance of business. The major aim of green logistics is to develop a sustainable company where there is a proper balance between environmental and economical efficiency. Green logistics gained its significance since mid 1980s. It represents a logistic system where more importance is given to advanced technology utilization and usage of equipment to reduce environmental damage. For several years, organizations had to undertake changing circumstances (Klassen and Johnson, 2005). As stated by Li, Ragu-Nathan, Ragu-Nathan and Subba Rao (2005), increasing dynamics and diversity, has shifted concern towards environmental issues. Economic, social and political demands have influenced organizations to reduce environmental hazards caused by their supply chain activities. They are inclined towards adopting supply chain strategies that ensure sustainable transportation facilities. There exist strong interactions between natural resources, logistics and environment. Environmental objectives can be realized on basis of synergy with financial and strategic goals. The term ecological concern is related to the extent supply chain or logistics is centered towards issue of resource conservation and environmental protection. There are influencing factors which affect supply chain. These factors are related to organizational stakeholders and increasing costs of commodity or energy (Li, Ragu-Nathan, Ragu-Nathan and Subba Rao, 2005). Simpson and Power (2005) in their studies described that the key stakeholders are state linked with national and international regulations, consumers being aware about eco-friendly goods, employees who desire to become part of socially or environmental friendly organizations, society which is inclined towards corporate social responsibility activities and companies managing own motivation framework. Green paradoxes mainly represent logistics system’s characteristics in context of environmental compatibility. Purpose of logistics system is to reduce the level of transportation costs. Freight physical distribution is basically supported by innovative strategies in order to cut costs and remain competitive in business environment (Simpson and Power, 2005). As per Stank and Goldsby (2000), environmental costs are often an external issue. Benefits linked with logistics systems can only be realized by customers. The hub and spoke structure is able to outline transportation network reorganization. It mainly reflects upon maritime, air and rail freight transportation mechanism. This structure constitutes traffic at selected number of terminals. Concentration within logistics flow ultimately results into local environmental issues like air pollution, traffic congestion and noise pollution. Logistics is an integrated management for goods movement across supply chain process. The delivering and manufacturing process can subsequently benefit through the approach of green logistics. It comprises of better methods to eliminate product packaging, raw material extraction, etc. Consumers often tend to pay more prices for environmental friendly products. Parent company should exhibit social and environmental responsibility so as to drag customer attention (Stank and Goldsby, 2000). As stated by Simchi-Levi (2008), green logistics usually is an appealing concept both from ethical and business perspective. There are different ways through which green logistics approach is implemented by real world organizations. These include shipping goods together, utilizing alternatives for fuel vehicles, incorporating sustainable raw materials for business operations, reducing packaging costs, building environmentally friendly storage or manufacturing facilities and promoting more of reusable and recycling programs. Logistics optimum can be achieved only when crucial components of logistics are combined effectively. This optimum factor can be expressed in the form of energy, cost and time savings. The key factors of modern world’s logistic system are manipulation equipment, modern transport means, door-to-door or just-in-time concept, and modern warehouses. Combining all these elements are indeed a supply chain management issue. Traditional logistics was only concerned with organization of forward distribution. Reverse logistics has gained significance only after increasing environmental considerations. This has initiated need towards recycling process which is completely a new sector. Reverse logistics is closely knitted with the concept of reverse distribution (Simchi-Levi, 2008). It involves waste movement and used materials’ transportation. Findings Freight transport in United States accounts for increased rate of carbon dioxide emissions. The major portion of greenhouse gas emissions is constituted by carbon dioxide emissions. It results due to combustion of gasoline or petroleum based products. Sources of greenhouse gas emissions are light duty trucks, pick-up trucks, passenger cars, minivans and utility vehicles. Freight trucks are also considered to be a major source of greenhouse gas emissions (Hervani, Helms and Sarkis, 2005). In 2013, transportation accounted for 27% of overall greenhouse gas emissions. This made it the second largest contributor towards greenhouse gas emission in United States, after electricity sector. There has been 16% increase in trend of carbon dioxide emission since 1990. Across vehicle fleet of United States, there is less availability of fuel efficient vehicles. During the time period of 1990 to 2013, percentage of freight transport have drastically increased by 35% (Helms and Dileepan, 2005). Over the years, contribution of transportation system towards greenhouse gas emissions has been well represented in figure 1. Figure 1: GHG emissions from transportation sector (Source: Helms and Dileepan, 2005) There are new technologies adopted by companies so as to decrease level of carbon dioxide emissions. It can be stated that green logistic system is such innovative approach to control carbon dioxide emissions resulting from freight transportation. Effectiveness or efficiency level of green logistics system can be measured through analyzing its overall environmental impact. It would be considered useful only when the technique is able to regulate environmental impact. Reductions in environmental hazards also represent other elements like waste water reduction, reduction in solid waste, air emission and utilization of fuel efficient vehicles. In overall context, measurement of green logistic system is associated with time and quality aspect (Murphy, Poist and Braunschweig, 2004). The alternatives used in this system should be able to deliver goods on time, without compromising on quality level. Green logistics system can be stated as a combination of both success and failure. It is mainly viewed as a success since it helps to reduce negative impact caused on environment. Green logistics initiatives are successful on basis of certain factors such as improved efficiency of energy levels; usage of an improved transportation system, maintenance of emission scorecard, green logistics providers is widely used by third party logistics, transportation from nearby warehouse centres, re-routing of vehicles, horizontal collaboration, green sourcing and emission reduction. Failure of green logistics is closely knitted with best practices and lack of knowledge, reduced customer demand, high cost, and aligned with long term gains rather than addressing short term objectives and requirement of data standardization (Stoke and Aimi, 2009). All these aspects combined together make green logistics a success as well as failure. The performance level of green logistics system in United States in comparison to other countries has been elaborated in figure 2. Figure 2: Performance Index of Green Logistics (Source: Schipper and Fulton, 2003) Return on investment can be denoted as a sustainability initiative driver. Logistics efficiency tends to improve upon stakeholder relations. Return on investment is also associated with recycling of raw materials and energy efficiency improvement. This kind of return is observed in different forms such as reduced packaging, strategic warehouse and emission reductions. Third party logistics are the main agents who are responsible for utilizing return on investment on green logistics system. Vehicle re-routing is a common phenomenon that is used by companies as a form of return on investment acquired through green logistics (Sarkis, 2003). Walmart has implemented green initiatives in logistic system. It is clearly evident that this retail company has been able to achieve high revenue margins on basis of high efficiency level of logistic system. The company has invested billion dollars in its green logistics system in order to utilize effectively renewable energy source (Van Hock, 2000). Walmart fills all its trailers to maximum capacity, incorporates efficient equipment and is inclined towards driving trailers to minimum miles possible. Green logistics as an approach has been successful from past twenty years. To be more precise there has been failures linked with green logistics. For instance, in case of Walmart, lack of knowledge in initial stage did not yield appropriate return on investment. However there is further scope of growth in next five years for green logistics due to increasing environmental concerns (Blumberg, 2004). In the next five years plan, green logistics system would be sustained since more companies are evolving which desires to incorporate such innovative techniques. Conclusion As per this study, green logistics system has emerged as an important concept due to increasing environmental and social concerns. Government intervention has facilitated growth of environmental regulation. In current scenario, environmental problems have drastically increased. Environmental degradation, land take and increased congestion are major factors which have contributed towards growth of green logistics system. Supply chain management and modern logistics have entered into an era of modern logistics system. There are many global enterprises which has focused on green initiatives and implemented it in its operational strategy. Recycling initiatives is a significant aspect of green logistics system. However freight transport is a major area of concern since it contributes magnificently towards greenhouse gas emissions. Carbon dioxide can be regarded as an essential factor resulting into air pollution. Freight transport sector in United States constitutes a main portion of greenhouse gas emissions. Green logistics system can be evaluated on basis of fuel efficient machines, reduced air emission, vehicle re-routing, etc. The percentage of air and noise pollution can be reduced only when less time is taken by vehicles to move from one location to another. Walmart has utilized the concept of green logistics system and it is a centralized approach. Suppliers and distributors are also included by the company in terms of supporting green initiatives. Summary This study is able to outline different dimensions of green logistics. Green logistics has gained significance only after rising concern towards adverse environmental impacts. There are parameters available to determine efficiency level of green logistics. It can be measured on basis of reduction in air emission, more usage of fuel efficient vehicles, etc. The concept has high return on investment in terms of company reputation, acquiring wide base of customers, increased fuel efficiency, usage of renewable energy sources, etc. Green logistics has witnessed success as well as failure. There is high investment required in this approach and less knowledge about green initiatives might be key reasons of failure. Future Research Recommendation There is a scope for future research study on green logistics. It is recommended that study should be conducted on negative outcomes associated with green logistics. Research studies have been particularly done on benefits of green logistic system. However in real world scenario there are many enterprises who fail in green logistics implementation. It can be stated that research on these areas might reveal certain techniques effective while incorporating green logistics system. Traffic congestion and increased emission rate would be the basis of further research study. On the other hand, real world data from enterprises can be obtained which has adopted green logistics system. Secondary data analysis has restricted this particular research study but in future research paper focus can be on primary data. This in turn would add value to the research study. References Blumberg, D. F. (2004). Reverse logistics and closed loop supply chain processes. New York: Taylor & Francis. Childhouse, P. and Towill, D. R. (2003). Simplified material flow holds the key to supply chain integration. OMEGA, 31(1), pp. 17–27. Helms, M. M. and Dileepan, P. (2005). Transportation Issues for Supply Chain Management. Business Forum, 27, p. 1. Hervani, A. A., Helms, M. M. and Sarkis, J. (2005). Performance measurement for green supply chain management. Benchmarking: An International Journal, 12 (4), pp. 330-353. Klassen, R. and Johnson, P. F. (2005). The green supply chain in understanding supply chains. London: Kogan Page. Li, S., Ragu-Nathan, B., Ragu-Nathan, T.S. and Subba Rao, S. (2005). Development and validation of a measurement instrument for studying supply chain management practices. Journal of Operations Management, 23, pp. 618–641. Murphy, P., Poist, R. F. and Braunschweig, C. D. (2004). Management of environmental issues in logistics: current status and future potential. Transportation Journal, 42(1), pp. 48-56. Sarkis, J. (2003). A strategic decision framework for green supply chain management. Journal of Cleaner Production, 11, pp.397-409. Schipper, L.J. and Fulton, L. (2003). Handbook of transport & the environment. Elsevier: Amsterdam. Simchi-Levi, D. (2008). Going green in the supply chain, manufacturing & logistics IT. England: IBC, Hertfordshire, England. Simpson, D. F. and Power, D. J. (2005). Use the supply relationship to develop lean and green suppliers. Supply Chain Management, 10, p. 1. Stank, T. and Goldsby, T. J. (2000). A framework for transportation decision making in an integrated supply chain. Supply Chain Management: An International Journal, 5 (2). Stoke, S. and Aimi, G. (2009). The green logistics factor. Inside supply management, 20(4), p. 34. Van Hock, R. I. (2000). From reversed logistics to green supply chains. Logistics Solutions, 2, pp.28-33. Read More