What is Green Logistics?
Logistics is the integrated management of all the activities required to move products through the supply chain. For a typical product this supply chain extends from a raw material source through the production and distribution system to the point of consumption and the associated reverse logistics. The logistical activities comprise freight transport,storage, inventory management, materials handling and all the related information processing.
The main objective of logistics is to co-ordinate these activities in a way that meets customer requirements at minimum cost. In the past this cost has been defined in purely monetary terms. As concern for the environment rises, companies must take more account of the external costs of logisticsassociated mainly with climate change, air pollution, noise, vibration and accidents. This research project is examining ways of reducing these externalities and achieving a more sustainable balance between economic, environmental and social objectives
The roots of environmentalism can be traced to the period during World War II when severe material shortages occurred worldwide. As a result of theseshortages, people were forced to become creative and reuse o recycle many different material. More recently, in response to heightened government regulation and increasing public awareness o the effects of industrial production on the environment, many organizations are now undertaking massive initiatives to restructure their supply chain processes and products to minimize their environmentalimpact.
A number of manufacturing firms have already begun to develop environmentally friendly practices, they have come to realize that recycling reduces energy requirements, reduces gaseous and solids pollutants and conserves raw materials. As a result of adopting environmentally friendly supply chain practices, these firms have also become more competitive and have improved their financialperformance.
Although environmental issues have been around for some time, the environmental movement will become more important and influential over the next decade. This development will have profound implications for logistics managers, as most aspects of our logistics operations will have to be modified (or rethought) in response to expanding environmental concerns. There are at least fourareas where logistics managers will have to fundamentally rethink their operations:
* Packing and unitized loads
Perhaps the greatest area of opportunity (and the area that historically has received the least attention) is packaging and unitized loads. New regulations and changing economics caused by escalating disposal costs mean companies will need to rethink their packaging designs.Reusable packaging with lower disposal volume and collapsible racking that dramatically reduces packaging requirements will become standard for many companies.
Moreover, organizations will have to maintain a higher level of packaging engineering skills and incorporate these skills into an integrated logistics organization.
* Reverse – flow logistics
Logistics networks will need to be redesignedwith reverse flows in mind. Instead of disposing of non-consumable products, companies will recycle them for reuse. Recycling of packaging in material will extend beyond the familiar cans and bottles to a broad range of materials. Moreover, the disposal of packaging will become the manufacturer’s responsibility.
The council of logistics management is planning a research project in 1993 onreverse-flow logistics. This research should provide useful insights on how companies should rethink their logistics networks in light of these new operating requirements.
* Modal choice
Shippers will have to shift more of their freight to rail and truck-on-freight-car (TOFC). This movement will be driven by regulations that limit trucking access to urban areas and by growing road congestion,...