Green Initiatives in Logistics

CII – Institute of Logistics Smart Logistics 2015 Ease of Doing Business

21 Aug 2015, Hotel Grand , N.Delhi By –Pramod Sant , VP –Siemens Ltd

“Green logistics describes all attempts to measure and minimize the ecological impact of logistics activities. This includes all activities of the forward and reverse flows of products, information and services between the point of origin and the point of consumption.“.

What is Green Logistics

Designing Of Products Production Material Purchase Packaging Warehousing Logistics

Green Logistics & its Paradoxes

Dimension Paradox

Cost More pressure on corporate to include greater environmental considerations. Users not ready to accept additional costs

Time /Flexibility Reduction cycle timeUse of most polluting and least energy efficient transport modes.- Airfreight, special vehicles

Reliability On time and with least breakage and damages.The least polluting modes shipping and rail are most unreliable.

Warehousing Reduction in inventory in warehouse Pressure on transport mode and increase in transit inventory.Intermediate warehouse for add on features

Information Technology

E-commerce promises delivery at customer home and in specific time /Hours.Higher usage of polluting modes like air, trucks and special vehicle. Consumes more energy than other distribution.

Environmental Costs Hierarchy

Cost Type Implication Details Control

Internal Material, labor, other expenses which are allocated to product or process

Can be quantified and controlled

Compliance Expenses related with regulatory frame work, such as emission standard ,

Possible to get subsidies, lower taxes

Contingent costs

Potential liability or benefits that depends on the occurrence of events , Risks of accidents, hazardous material release ,

Risk , fine

Image and relationship cost

A firm or a product that is perceived negatively from an environmental point can incur significant cost

Costly Endeavour, can lead to positive impact also

External Cost

Costs that are externalized, Growth often results in higher level of usage of transport infrastructure , more emission of pollutants and higher risk of accidents

Cost assumed by wider economy considered outside firm

Approach to Green Initiatives

Approach Details

A top Down approach

Where Govt. is imposing on the Logistics Industry by Govt. Policies through regulations

A bottom –up approach

Where environmental improvements are coming from Industry itself through adoption of best practices.

A combination of both

Between the Govt. and Industry, through certification scheme

However it is possible that in some industry one or more approaches will be required due to regulation and competition.

Strategies in Green Logistics

Objective Strategy

Shipping Shipp correct quantity, demand responsive system, redcue returns

Sourcing Sourcing close to factory ;location or site .Both for Imports and domestics

Shipping schedule

Allow greater hipping time, outside rush period , Clubbing of air shipments . LCL to FCL .Deliveries on specific daysBetter consolidation of loads to avoid suboptimal use of transport (From LTL to FTL)

Efficient packing Reduce shipment size (volume ) of the same load

Mode of dispatch Use of mode or a route which more energy and environmentally effective .Shift from Air to sea or Air to Air + Sea , express to surface ,Air to surface ,

“Process of planning, implementing and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal”

What is Reverse Logistics

Strategic Weapon Competitive Reasons Good Corporate

Citizenship Clean Channel Recapture Value and

Recover Assets Legal Disposal Issues

Balance of risk and Complexities in Green Logistics

structure of the logistics network

vehicle operation

choice of transport mode

vehicle routing and scheduling

vehicle design

configuration of the supply chain

Rail v/s Road Sea v/s Air Express v/s Surface

Countries of supplyPorts used Transshipment points Local situation Political situation

Case study Siemens – Warehouse

Main Topic Masseurs

Site sustainability features

Stacking and protection of top soil onsite and reusing the same for landscaping.Detention basins for storm water channels 90% construction waste of debris reused , avoided land fill

Water Efficiency

Rain water harvesting and sewage treatment plant which will tear 100% onsite water for reuse .Rain water capture harvesting ponds.Treated water is reused for landscaping and toilet flushingLow flow dual flash toilets, sensor based urinals, water efficient fixtures has helped consumption of potable water by 25%

Energy No artificial lighting in day timeHigh roof with special design keeps lower temperature in main warehouse CFL and LED lighting with occupancy monitoring system and shut down Low u value walls and roofUse of energy saving A/C in office area

Case study Siemens – Other initiatives

Main Topic Masseurs

Collaborative Logistics

Use 3 PL service provider for 50% total distribution of Siemens Ltd

Collaborative Delivery

In locations like Thane, Aurangabad, Baroda where multiple factories exist collaborative deliveries

Reusable packing

All healthcare spares original packing is used to collect defective and onward export Turbine Rotors are carried in reusable packing which is returned after delivery . Reusable packing for Low voltage circuit breakers across globe

Transport Design

Dismantling of product after final testing in factory and transport in part dismantle condition – Current Transformers Transformer and accessories – divide between Break bulk and container

Re Manufacturing

Medical equipments like CT, which are factory refurbished and sold .