Carl-Magnus Carlsson

CO-EFFICIENT and openENLoCC

Portorož, Slovenia, 21 May 2015

Logistics and Energy

Consumption – the Role of

Logistics Competence Centres

in Decoupling

Population growth induces demand for more goods, drives accelerated urbanization and

sprawl of production. This means more transport and logistics which consumes more

energy!

Thus, decoupling the increase in need for transport – not least for SMEs - from a

corresponding growth in energy consumption, by more efficient logistics operations is

vital!

What are the problems?

What could be the measures and remedies?

Who should take lead in action?

Why is this an issue?

• Co2 and emissions

• Congestion

• Peak oil

• Climate change

All Logistics and Supply Chains run on Energy

When transport is not running perfectly,

more energy is needed on all levels!

Example I: The Bullwhip effect

Bad decision making

increases energy

consumption in

transport

Factors

• Demand fluctuations

• Unsmooth Value

Adding Processes

• Disturbances/Chocks

• Information

assymetries

Bullwhip• Too large orders (batching) or too

small orders (reducing inventory) – attempting at

saving costs or arbitraging

• Overreaction to

Forecasts

• Timelags in

information and

physical flows

MAIN FACTOR: Lack of Communication,

Information Sharing and Coordination

Measures• Fewer nodes and larger warehouses (increased load factor/fill rate)

• Consolidation(UCC, horizontal collaboration)

• Standarized vehicles (unit loads)

• Co-modality

• Cost balancing in the

whole Supply Chain

• Visibility: ICT; VMI, EDI

• Long term relations between Supplier and Customer

This requires: Information Sharing and Coordination

Example II: Loadfactor and Energy Use

Reduce empty running because low loadfactor and vehicle use (space, weight, tonne-kilometres) increases energy consumption

Reasons for empty running

• Market and production units (Location and Demand fluctuations: Bullwhip, JIT)

• Regulations and Policy (weight, size, timewindows, working timerestrictions)

• Scale of production, location and size of firms (eg. SMEs)

• Infrastructure (network restraints)

• Incompability of equipment for handling

• Storage capacity eg. in City logistics

• Underloading can be rational for the singlecompany regarding other goals eg. JIT, prioritizing outbound hauls etc. Reason: lack of communication and knowledge ofloading

• Traffic jams

• Specialised vehicles: eg. can only carryrefrigerated goods

Measures• Revaluation of JIT, Lean, Outsourcing due to fuel

prices

• Horisontal collaboration in transport: Same level; competing firms; consolidation, increased loadfactor

• Packaging design for better load factor and recycling

• Increase vehicle size

• Vertical collaboration in transport: different level; eg. VMI, back hauls, and,

• Better routing to enable back haul by deliveryvehicles

Example III: Back haul by delivery vehicles, dependent on…

• Capacity and frequence?

• Only Clean Waste? (paper etc.)

• Equipment needed? (pallets, baling)

• Delivery point?

• Seasonal fluctuations in back haul demand by stores?

This requires: Information Sharing and Coordination

All of these relations between Logistics

and Energy Consumption,

problems as well as solutions,

are well known by most actors and

stakeholders in the Supply Chain.

Conclusion

However, each actor is optimizing his own

business often in lack of information sharing,

cooperation and coordinating with other parts

of the chain, both horizontally and vertically,

because usually competitors on the same

level in the SC are reluctant to knowledge and

information sharing for business reasons.

Even if they may be SMEs in a ”Cluster” !

But as we have seen, knowledge and

information sharing to enable

cooperation and coordination in the

SC may be one of the most efficient

remedies to reduce Energy

Consumption induced by non

optimized Logistics!

A non profit organization made up by non profit organizations

with expertice in logistics, without business interests and with

knowledge from several fields of operations in several countries

just may be the best actor to play the role of an independent

collector, processer and provider of information, thus increasing

cooperation and coordination for more efficient logistics in order

to reduce energy consumption. One such actor is:

Logistics and Energy Cosumption?

Logistics Competence Centres make decoupling possible!

Logistics and Energy Consumption – the Role of

Logistics Competence Centres in Decoupling

carl-magnus.carlsson@mah.se

Malmö University

Sweden

Thank you for your

attention!