Transcript Green Supply Chain Management

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
What is Green Logistics
Designing Of Products
 Production
 Material Purchase
 Packaging
 Warehousing
 Logistics

“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.“.
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 time
Use 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 Risk , fine
the occurrence of events , Risks of accidents,
hazardous material release ,
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 days
Better 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 ,
What is Reverse Logistics
“Process of planning, implementing and controlling the efficient, costeffective 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”

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
configuration of the supply chain
structure of the logistics network
choice of transport mode
vehicle routing and scheduling
vehicle operation
vehicle design
Countries of supply
Ports used
Transshipment points
Local situation
Political situation
Rail v/s Road
Sea v/s Air
Express v/s Surface
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 flushing
Low flow dual flash toilets, sensor based urinals, water efficient
fixtures has helped consumption of potable water by 25%
Energy
No artificial lighting in day time
High 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 roof
Use 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 .