As more companies add environmental and social responsibility to their concerns about efficiency and cost, it's evolving into a new way of sending products to their destinations.
Thu, Apr 19 2012 at 3:33 PM
Have you ever thought about what it takes to get a product from its manufacturing facility to the shelves on your local stores? It may seem as if those electronics, vehicles and other items are simply placed on a truck or a ship and sent off to their destination, with little more than shipping routes and fuel to consider along the way. In fact, the management of this process — known as logistics — is incredibly complex, and as more companies add environmental and social responsibility to their concerns about efficiency and cost, it's evolving into a new way of doing things: sustainable logistics.
Logistics is the process of carrying out the supply chain, from the sources of the raw materials all the way to the point of consumption. Among the factors involved in the process are freight transport, fuel, warehousing, inventory management, retailing and safety inspections. In developing plans to manage all of these factors, companies have to think about how to keep costs low and meet consumer expectations. Increasingly, as people become more aware of the origins of their purchases, those expectations include 'green' concerns like energy efficiency, sustainable manufacturing and positive social impacts on the communities where the products are made.
You may have seen the term 'We Love Logistics' emblazoned on UPS trucks as they go about their business delivering packages to homes and businesses in your area. UPS is an excellent example of how sustainable logistics work. The shipping company, which handles the transportation of products for millions of businesses across the world, must maintain an extremely fine-tuned management plan, going so far as to employ their own meteorologists to ensure that packages are delivered on time in all types of weather. UPS recently received the highest score in the Carbon Disclosure Project's Global 500 Leadership Index and constantly works to make its fleet, routes and other factors of shipment more sustainable.
On its website, UPS provides one example of how sustainable logistics can save money for a company that it works with. Mercedes Electric Supply started in 1979 with two people and a station wagon, and now delivers more than $20 million worth of electrical equipment all across the globe. Utilizing UPS's transportation network, Mercedes Electric saved 20 percent on its bottom line and also offset the carbon impact of its shipments with UPS carbon-neutral shipping.
Shipping company DHL has provided facts and figures that demonstrate just how much of a difference sustainable logistics can make. A study by Deutsche Post DHL, "Delivering Tomorrow: Towards Sustainable Logistics," identified areas where energy and resources were being wasted and found ways to improve. For example, more than 80 percent of warehouse energy consumption is due to lighting, and aerodynamic drag is responsible for 40 percent of the fuel consumption of heavy-duty trucks on the highway. Furthermore, 63 percent of business customers believe that finding a way to address these factors could help mitigate global warming.
Another company that stands to make a large impact with sustainable logistics is Wal-Mart Stores, Inc. The retailer revealed in its 2009 Sustainability Report that it has made a number of improvements in its trucking fleet and distribution centers. Wal-Mart operates one of the largest private trucking fleets in both the United States and the United Kingdom, and its Logistics Division works to make that fleet more efficient. In 2008, Wal-Mart reached a 38 percent increase in efficiency over 2005 levels with initiatives that enabled them to deliver 3 percent more cases of merchandise to stores while driving 7 percent fewer miles.
Improvements to Wal-Mart's 140 distribution centers servicing more than 4,200 stores include retrofitting lighting fixtures, using energy demand monitoring systems, integrating glycol cooling into the refrigeration system, using rapid-operating doors that stabilize temperature levels inside certain rooms and installing solar panels.
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