Environmental Engineering Reference
In-Depth Information
Table 1. Contribution of Green Logistics to the Creation of Economic and Social Value (Based on Kumar
& Malegeant 2006)
Economic Value
Social Value
• Improved customer satisfaction
• Good relations with stakeholders
• Green image
• Higher delivery reliability through optimized route planning
and less truck downtime
• Higher productivity through higher motivation of the employ-
ees
• Reduced liability risk
• Reduced taxes
• Improved financial performance
• Reduced environmental impact (e.g. CO
2
-emissions, noise levels)
• Better utilization of natural resources (e.g. fuel, packaging)
• Reduced social cost (e.g. health problems in the communities)
• Creation of jobs
& Jennings 2000, Kumar & Malegeant 2006).
Nevertheless, the “value creation” perspective
provides important arguments for overcoming
these barriers.
Studies demonstrate that the creation of
green logistics systems has a positive impact
on aspects such as customer satisfaction, labor
productivity, relations with external stakeholders
and financial performance (Kumar & Malegeant
2006), although this impact may vary among
companies, industries, and countries. Table 1
shows the contribution of green logistics to the
creation of economic and social value, leading to
the conclusion that investments in green logistics
systems can improve, sustainably, the competitive
position of companies. In addition, as value chains
involve many actors, the benefits of investing in
green logistics systems can multiply from single
companies to its business partners and to society
as a whole.
(Makower 2010). Such practices include re-
organization of the value chain at several levels,
putting in place efficient re-distribution systems
to take back products and materials, and develop-
ing a broader design culture, i.e. going beyond
immediate functionality to take into account the
recovery phase (De Britto 2007). Not only in new
processes, however, but also in traditional logistics
activities (i.e. transportation, warehousing and
value added services) green practices are regarded
as substantial aspects of the business world.
In the literature, green practices adopted by
companies reflect four general strategies: to use
less (e.g. material or energy), to substitute (e.g.
non-toxic for toxic materials), to clean up the
outputs (e.g. end-of-pipe technologies), and to turn
outputs into inputs (e.g. reuse of pallets) (Russel
& Allwood 2007).
The following section describes significant
practices in green logistics. These practices involve
the above-mentioned activity groups: transpor-
tation, warehousing and value-added services.
Included are company examples for each one of
these service groups.
GREEN LOGISTICS PRACTICES:
STRATEGIC, TACTICAL, AND
OPERATIONAL
Transportation
As stated in “Introduction: Basics of Green Lo-
gistics,” green logistics is currently a strategic
concern for companies, as demonstrated by the
increasing number of companies that introduce
innovative green practices into their operations
Transportation is a logistics activity with a high
impact on the environment. This is why it is one
of the main areas for development of green lo-
gistics practices.
