Environmental Engineering Reference
In-Depth Information
Table 7. Green Logistics Practices in Emerging Markets
Strategic
Tactical
Operational
Transportation
• Creation of distribution centers
• Freight consolidation
• Fuel efficiency
• Load optimization
Warehousing
---
• Reconditioning and reuse of pal-
lets and containers
• Fuel efficiency
• Energy efficiency
• Process optimization
• Minimization of inventories
Value added Services
• Introduction of tracking and trac-
ing systems
---
• Use of tracking and tracing
systems to improve operations
performance
able companies to evade full compliance lowering
the legislation's impact in those countries.
On the other hand, factors such as poverty and
inequality, lack of public infrastructure and low
logistics performance indexes lead to a different
set of priorities for the stakeholders of a value
chain in comparison with the priorities of stake-
holders in highly developed markets. This differ-
ence implies lower customer interest regarding
green issues and reduces the positive effect cus-
tomer awareness can have as driver for implement-
ing green practices. A different situation may arise
when a better informed and more demanding
market actor located in a highly developed market
evaluates a chain's performance including its
operations in emerging markets; this situation
may call for “responsible acting”, encouraging
the use of an actor's dominant position to force
its global business partners to implement green
practices. An effective response from these actors
may also serve as a strong driver to change the
mindset of several business actors in emerging
markets and eventually of a major part of the
society.
Finally, it is important to state that low labor
costs and high interest as well as inflation rates
have a negative impact on implementing new
technologies and on substituting labor by capital.
Therefore, some of the activities reaching cost
savings and environmental friendliness simulta-
neously do not have a high priority in emerging
markets. One example refers to the process cost
of truck loading: in developed markets, high
labor cost leads to a dominant use of palletiza-
tion and forklift trucks. In emerging economies
on the other hand, low labor cost prevail manual
process execution.
The analysis of emerging market characteris-
tics may suggest that green logistics activities in
such business environment focus on the following
practices (see Table 7):
Cases
BP's “Green” Efforts: A Global
Company in an Emerging Market
BP's presence in Colombia dates back to 1986.
Focused in the upstream line of business, BP is
responsible for the operation of the Cusiana and
Cupiagua complex, Colombia's major oil finds
to date, representing approximately 1.6 billion
barrels of oil (BP, Exploring Casanare, 2010). The
complex produces at an average rate of 148,000
barrels of oil and 200 million cubic feet of gas
per day (BP, BP in Colombia at a Glance, 2010).
Operations involved drilling over 130 wells,
building and working two major processing instal-
lations, and managing a 200-kilometre network of
flow lines connecting wells to facilities.
The Colombian Ministry of Environment
has granted BP over 120 licenses to operate on
Colombian soil based on the development of the
Integrated Management System (IMS), which
