Description
A look at Green Logistics initiatives of DHL and future trends
A look at green and sustainable technologies that can be used in supply chain management
Green Logistics in SCM
A look at DHL initiatives towards sustainable logistics
Student Name: JaiganeshRavindraBabu Student ID: 42245 Subject: Supply Chain Management Lecturer: Mr.BismarkAkoi MBA Innovative Management Submission Date: 1st April 2011
Acknowledgement
M speci l t
s t a great many people who helped and supported me during the
writing of this coursework.
My deepest thanks to Lecturer, BISMARKT.AKOIfor appropriate guidance that was provided and hints towards completing this work. My special thanks to my college li rary staffs who guided me to the required source without any hesitation.
This report is based on a number of popular textbooks and websites and the same has been acknowledged in bibliography.
I would also thank my Institution and my faculty members without whom this project would have been a distant reality. I also extend my heartfelt thanks to my family and well-wishers.
1
Contents
Supply Chain Management and Logistics ................................ ................................ ... 3 Role of Logistics in Sustainability ................................ ................................ .............. 4 Motives for Sustainable Logistics Model - Why acting sustainably make business sense ................................ ................................ ................................ .......................... 5 Behavioural Trends and Major Shifts Expected-Changes are already on their way ..... 6 Rise of Demand for Low-Carbon Logistics ................................ ................................ 6 How Logistics Industry will change to Sustainability ................................ ................. 6 Economic Value of Going Green................................ ................................ ................ 7 Towards a More Sustainable Logistics ± Conceptual and Operational Solutions ......... 7 Conclusion ................................ ................................ ................................ ............... 11 Bibliography ................................ ................................ ................................ ............ 12
2
Supply Chain Management and Logistics
James Morton of CapGemini, during the annual 3PL study presentation denoted that reducing carbon emissions will always results in reducing the operating costs in logistics which will translate to a better business for SCM organisations. The sentence above clearly demarcates the need and the necessity for green initiatives for business. Is the claim really up to its mark or not is the intent of this paper. Supply Chain Management (SCM) according to Tom McGuffog is adding value and and reducing total cost across the entire business process through focusing on speed and certainty of response to the market.Globalization and ICT has resulted in SCM becoming a tool for organisations to compete effectively either at a local level or in the global arena. SCM has become a necessity tool for manufacturing industry when it comes to delivering products at a competitive cost and at a higher quality than their competitors (Sovereign, 2008)
With the growing necessity for organisations to project or place themselves as carers of society and with increasing trends of µgo-green¶ mentality of various customers, organisations that are involved in the logistics chain have also taken up various measures to become greener in that sense. One of the world renowned providers of logistics supplier Deutsche Post DHL is no stranger to this bug. As the leading provider of logistics support for various businesses DHL has taken a number of steps to further reiterate the fact that a company can take up the initiative to go green and still remain competitive and be responsible to the environment.
The world is hugged by Deutsche post DHL. With a network of almost half a million employees, DHL spans the globe, reaching nearly every nook and corner of our planet. As a global logistics company they are a vehicle for market and trade growth from Asia to the Americas, from Europe to Africa. DHL influences and affects the world in which it operates but it is also equally influenced and affected by trends and developments around the globe, be they economic, political or societal in nature. This is one of the prime reasons why DHL understands and addresses factors that form the future trend in green logistics.
3
The culture for going green did not initiate itself. DHL at the initial stages faced a lot of hurdles both internal and external before it was able to embark on a Gogreen initiative and at present is successfully and the only company to have a clearly settarget and transparent process to check for compliance in the world. Post the muddle that DHL faced with respect to its failure on the green front, the organisation after a successful implementation of change within its process has emerged as a leader with proof to show the world that it has the initiative to remain in the forefront of logistics and yet remain green.
But why, should the focus be on green logistics? Recent research has shown that climate change is a concern of high prominence for citizens around the globe, in short sustainability and green initiative matters a lot to a lot of people. It is so important that almost all organisations have integrated the process into their corporate initiatives. Under the µGo-Green label¶ DHL was the first logistics company to
promote carbon-neutral shipping services and to publicly communicateclear-cut carbon efficiency goal.
Role of Logistics in Sustainability
In a world that is highly interconnectedwhere the latest trendy product or a new business is just a click away the transport and logistics company play an important part in ensuring the smooth flow of products from the manufacturer to the intended user. Logistics is a key driver of global economy and job creation
accounting to a whopping 9% of total global GDP(Logistics Today 2010). Having contributed to the global prosperity and employability, logistics business should also understand its responsibility for the environmental impact. Just as logistics provides for economic growth it should also look at providing logistic solution that has ecological sustainability at its core value. The option to ignore the ecological impact is not an option as the negative impact of unplanned logistics has been clearly pegged at 5% of global GDP by Nicholas Stern(2007).
Posted below are the figures that compare various sources of GHG emissions with individual GHG signature for various logistics activities.
4
GHG Emissions in 2004 in terms of CO2
Residential & Commercial Buildings, 7.90% Transport, 13.10%
Forestry, 17.40%
Industry, 19.40%
Agriculture, 13.50 %
Energy Supply, 25.90%
Waste & Wastewater, 2.80 %
GHG Emission of Logistic Activities
3000
2500
2000
1500
1000 500
0
Road Freight Ocean Freight
Air Freight
Rail Freight
Logistic Buildings
CO2 Emissions in megatons per year Source: WEF 2009
Motives for Sustainable Logistics Model-Why acting sustainably make business sense
Many developing trends show that most business needs to take a long-term view on their business with regards to sustainability vis-a-vis 1. Customers will place a higher emphasis on sustainability factor. A key factor will be the need to measure and reduce the carbon footprint.
5
2. Investors will expect business to adopt a more sustainable business models by demonstration and integration risk management methods with respect to climate changes. 3. Employees will be incentivised to transfer their sustainable practises to workplaces. 4. There will be increasing political and legislative support for sustainability work processes started by business. 5. Industry alliances will be formed to set standards and promote/put in new way of thinking on a green and sustainable way.
Behavioural Trends and Major Shifts Expected-Changes are already on their way
Lately, people around the world are not only concerned about climate change, but are increasingly assertive towards taking action in favouring more
environmentally-friendly behaviour. The most common efforts, as proved by the Green Trends Survey were to separate waste, to reduce consumption of disposable items, to choose an environmentally friendly mode of transport or recycling.
Rise of Demand for Low-Carbon Logistics
The fact that in UK retail sales volumes of fair-trade products increased from GBP 21.8 million in 1999 to GBP 799 million in 2009(Fairtrade.org) underlines the importance that business fix on green initiatives. Data from both research and market analysis prove that demand for green logistics offerings is increasing. Customers are willing to favour a company with green transport/shipping over a cheaper non-green process business.
How Logistics Industry will change to Sustainability
1. Logistics as a strategy: Logistics will not only be a catalyst to global trade and a defining component towards value creation ± it will also assume strategic importance towards low-carbon economy. 2. Technological change will be achieved with group collaboration between various businesses and government initiatives. This is equally important
because of higher price tag and long-term sustainability.
6
3. Increasing collaboration, as carbon emission reduction becomes a priority to business due to increasing consumer requirements. 4. Change in Business models due to sustainable innovations. 5. CO2 labelling will be widespread and quite common to ascertain carbon footprint. 6. Price tagging for carbon emission will be a normal rather than a catch word in media. 7. A more stringent regulator measure due to carbon pricing is only a matter of time.
Economic Value of Going Green
Green Trends Survey points out that green logistics is or will be important for ³intangible´ reasons like company reputation and for cost savings making more business sense. 1. Growing Customer demand for green products producing more sales. 2. Growing importance of ³Responsible Investments´
Source: DHL Annual Report 2009
Towards a More Sustainable Logistics Operational Solutions
Conceptual and
The rule so far in logistics has been cost and speed, lately an additional dimension begs importance, namely sustainability.We shall now look into conceptual and operational solutions with respect to DHL and their impact on a sustainable logistics solution that not only makes business sense but also has sustainability at its core. 7
Conceptual Solutions Measures like green distribution design or optimal route management are important strategies to minimise CO2 emissions.
Sourcing Strategies: No Business is able to produce a product by its own process.
In fact, more parts are nowadays sourced for production. As any form of transport leads to CO2 emission, this is one good way at looking at reducing emission. The global source method for parts made sense during the 80s and 90s era due to a steady crude oil prices, this no longer hold true. A locally sourced product part not only reduces cost but also reduces the transport CO2 emissions involved.
Manufacturing Changes: Forward stocking has been used and has shown to be an
effective means of meeting consumer demand without any large scale reduction in efficiency and can be looked into. With the increasing use of online purchases it only makes prudent sense to part assemble a part for transport and then comple the te assembly locally.
Distribution Change: Optimising a network design such that nodes and
interrelated routes are taken into consideration may cause a minimal delay but works great for reducing emissions. A common way to make this happen is for similar organisations to come together to share their logistical resources for maximal and energy efficient use.
Modal Mix Alteration: Planes have a comparatively high CO2 footprint when
compared to ships and so on. Choosing the best mode of transport also makes sense. DHL recently undertook a modal mix alteration strategy for a pharmacy company in Europe. Following an effectively chosen distribution change and modal mix model, the companies warehouse were reduced to 15 from present 40 and road transport was adopted that was proven to reduce emissions by 40%. The outcome of the study proved that GoGreen initiative by DHL is not only cost saving but also sustainable and makes business sense.
Route Management: A vast majority of transportation of products is undertaken on
roads. An effectively managed route will not only reduce time and save money on wages but also have a good green signature. This system does require a complex dynamic routing planner to be put in place.
Proper Capacity Management: A properly planned capacity cuts down under
utilisation of resources. In 2008, DHL Freight Euronet implemented proper capacity 8
management tools to improve CO2 efficiency from 100 to 70g CO2 per revenue ton kilometre.
Failure Free Del ivery: Another area that DHL concentrated is failed delivery. A
very good initiative by DHL in this area is the DHL Packstation Initiative. This allowed customers to receive their packages at secure stations with 24/7 access. This not only ensured that packages are delivered to the customers but also at their convenient time. The savings from such initiatives are substantial, from Packstation alone, 40000 kms of trip was saved and this resulted in a CO2 emission reduction of 11 tons.
Operational Solutions While changes to design of networking and mode of transport reduces CO2 emissions, DHL will not be become a low carbon company unless operational changes, especially newer technologies are implemented. We will look into a few cases where DHL can make more changes to its operational structure to reduce its carbon footprint.
Road Freight: At present there is no technology that can completely reduce CO2
emissions but there are a few models that have a lower CO2 footprint which can be used for the purpose.
Hybrid Vehicles: These combine a conventional engine with a high voltage electric
motor supporting the combustion engine. For DHL, hybrid powertrain systems are more suitable for smaller trucks (7.5-12 tons), in this instance the expected gain in efficiency is in the range of 15% to 25% a much larger value when compared to linehaul traffic or heavy-dutytrucks. DHL may implement this at a larger scale to reap benefits on a longer term.
Electric Vehicles: will have a major impact on the logistics industry. First of all
they will have an advantage of nigh-time delivery due to less noise produced. Additionally, they will also clear congestion due to nigh time service. They can also become part of the country¶s intelligent energy infrastructure by serving as source of energy during times of dire requirement. However, the main hurdle for logistics company such as DHL will be the exorbitant initial setup cost such projects command.
9
Bodywork Design: A vehicle¶s size; mass has significant impact on its overall
efficiency, fuel consumption, and gas emission. A recent research by Bandivadekar et al, 2008 has shown that vehicle weight reduction of up to 15% is possible with substantial improvement in fuel efficiency.
Aerodynamics: Air drag is considered to be a major source of wasted energy and
DHL has initiated major changes in the aerodynamics of its fleet to ensure that air drag is reduced. Studies have shown that an optimally shaped vehicle can have a 15% higher efficiency compared to a normal vehicle. DHL has also tried to improve the shape to utilise the space to maximum load capacity.
Source: DHL Annual Report 2009
Eco-Driving Systems: It is a well-known factor that driving style is the single
greatest factor on fuel efficiency. Eco-driving enables/quips the driver on his driving behaviour. For example
y
Display fuel consumption or emission levels is sometimes enough to alert the driver of his driving style.
y
Start-stop assistants remind the driver of optimal turn off points to save idling fuel wastage.
y
Gear-shift indicators to suggest the gears to improve fuel efficiency.
The above methods can lead to a long term reduction of 7% of fuel consumption (Kompfner& Reinhardt, 2008)
10
Employee Empowerment: DHL has involved its employees to push for a greener
future. With a programme christened ³Go-Green Dialog Map´ employees from local facilities brainstorm and evaluate easy-to-implement ways to save energy, water and paper, and to reduce waste. They nominate a person to be the green champion to implement their ideas with an emphasis on independent things and genuine ideas being rewarded.
Conclusion
Being an industry leader DHL is not only a facilitator of global business but also is an influencer of industry practises. The company at the same time understands its responsibility towards sustainability and has taken a number of initiatives to maintain and grow a business that has sustainability as a core value with both economic and ecological sense.
Changes will happen and while there is no exact blueprint for ³carbon-free logistics´ a sustainable, low carbon logistics solution is within reach and can be implemented if only companies have a long term view. While there is no silver bullet that will transform the logistics into a carbon free industry overnight a number of factors will speed on the revolution. The Green Trends Survey clear points to a clear desire to have sustainability at the core of business, this clearly point to the fact that economic necessity, customer requirements/demands and regulatory measurements will drive the change.
11
Bibliography
1. Razamith Sovereign 2008, Importance of Supply Chain Management in Modern Businesses. 2. Study Towards Sustainable Logistics, December 2010 3. Carbon Trust (2007), Energy Efficiency ± Best Practise Programme (EEBPP) ± Technology Overview. 4. Klaus, P, Kile, C (2008/2009), The Top 100 of Logistics, DVV Media Group, Hamburg 5. McKinnon, A. (2010), Green Logistics: The Carbon Agenda.
http://www.logistics.pl/pliki/McKinnon.pdf 6. Wyatt, K (2007), µTaking Light Steps to Cut Carbon Emissions, UKWA, August [online], Available at http://www.ukwa.org.uk 7. DHL Annual Report 2009
12
doc_126813286.docx
A look at Green Logistics initiatives of DHL and future trends
A look at green and sustainable technologies that can be used in supply chain management
Green Logistics in SCM
A look at DHL initiatives towards sustainable logistics
Student Name: JaiganeshRavindraBabu Student ID: 42245 Subject: Supply Chain Management Lecturer: Mr.BismarkAkoi MBA Innovative Management Submission Date: 1st April 2011
Acknowledgement
M speci l t
s t a great many people who helped and supported me during the
writing of this coursework.
My deepest thanks to Lecturer, BISMARKT.AKOIfor appropriate guidance that was provided and hints towards completing this work. My special thanks to my college li rary staffs who guided me to the required source without any hesitation.
This report is based on a number of popular textbooks and websites and the same has been acknowledged in bibliography.
I would also thank my Institution and my faculty members without whom this project would have been a distant reality. I also extend my heartfelt thanks to my family and well-wishers.
1
Contents
Supply Chain Management and Logistics ................................ ................................ ... 3 Role of Logistics in Sustainability ................................ ................................ .............. 4 Motives for Sustainable Logistics Model - Why acting sustainably make business sense ................................ ................................ ................................ .......................... 5 Behavioural Trends and Major Shifts Expected-Changes are already on their way ..... 6 Rise of Demand for Low-Carbon Logistics ................................ ................................ 6 How Logistics Industry will change to Sustainability ................................ ................. 6 Economic Value of Going Green................................ ................................ ................ 7 Towards a More Sustainable Logistics ± Conceptual and Operational Solutions ......... 7 Conclusion ................................ ................................ ................................ ............... 11 Bibliography ................................ ................................ ................................ ............ 12
2
Supply Chain Management and Logistics
James Morton of CapGemini, during the annual 3PL study presentation denoted that reducing carbon emissions will always results in reducing the operating costs in logistics which will translate to a better business for SCM organisations. The sentence above clearly demarcates the need and the necessity for green initiatives for business. Is the claim really up to its mark or not is the intent of this paper. Supply Chain Management (SCM) according to Tom McGuffog is adding value and and reducing total cost across the entire business process through focusing on speed and certainty of response to the market.Globalization and ICT has resulted in SCM becoming a tool for organisations to compete effectively either at a local level or in the global arena. SCM has become a necessity tool for manufacturing industry when it comes to delivering products at a competitive cost and at a higher quality than their competitors (Sovereign, 2008)
With the growing necessity for organisations to project or place themselves as carers of society and with increasing trends of µgo-green¶ mentality of various customers, organisations that are involved in the logistics chain have also taken up various measures to become greener in that sense. One of the world renowned providers of logistics supplier Deutsche Post DHL is no stranger to this bug. As the leading provider of logistics support for various businesses DHL has taken a number of steps to further reiterate the fact that a company can take up the initiative to go green and still remain competitive and be responsible to the environment.
The world is hugged by Deutsche post DHL. With a network of almost half a million employees, DHL spans the globe, reaching nearly every nook and corner of our planet. As a global logistics company they are a vehicle for market and trade growth from Asia to the Americas, from Europe to Africa. DHL influences and affects the world in which it operates but it is also equally influenced and affected by trends and developments around the globe, be they economic, political or societal in nature. This is one of the prime reasons why DHL understands and addresses factors that form the future trend in green logistics.
3
The culture for going green did not initiate itself. DHL at the initial stages faced a lot of hurdles both internal and external before it was able to embark on a Gogreen initiative and at present is successfully and the only company to have a clearly settarget and transparent process to check for compliance in the world. Post the muddle that DHL faced with respect to its failure on the green front, the organisation after a successful implementation of change within its process has emerged as a leader with proof to show the world that it has the initiative to remain in the forefront of logistics and yet remain green.
But why, should the focus be on green logistics? Recent research has shown that climate change is a concern of high prominence for citizens around the globe, in short sustainability and green initiative matters a lot to a lot of people. It is so important that almost all organisations have integrated the process into their corporate initiatives. Under the µGo-Green label¶ DHL was the first logistics company to
promote carbon-neutral shipping services and to publicly communicateclear-cut carbon efficiency goal.
Role of Logistics in Sustainability
In a world that is highly interconnectedwhere the latest trendy product or a new business is just a click away the transport and logistics company play an important part in ensuring the smooth flow of products from the manufacturer to the intended user. Logistics is a key driver of global economy and job creation
accounting to a whopping 9% of total global GDP(Logistics Today 2010). Having contributed to the global prosperity and employability, logistics business should also understand its responsibility for the environmental impact. Just as logistics provides for economic growth it should also look at providing logistic solution that has ecological sustainability at its core value. The option to ignore the ecological impact is not an option as the negative impact of unplanned logistics has been clearly pegged at 5% of global GDP by Nicholas Stern(2007).
Posted below are the figures that compare various sources of GHG emissions with individual GHG signature for various logistics activities.
4
GHG Emissions in 2004 in terms of CO2
Residential & Commercial Buildings, 7.90% Transport, 13.10%
Forestry, 17.40%
Industry, 19.40%
Agriculture, 13.50 %
Energy Supply, 25.90%
Waste & Wastewater, 2.80 %
GHG Emission of Logistic Activities
3000
2500
2000
1500
1000 500
0
Road Freight Ocean Freight
Air Freight
Rail Freight
Logistic Buildings
CO2 Emissions in megatons per year Source: WEF 2009
Motives for Sustainable Logistics Model-Why acting sustainably make business sense
Many developing trends show that most business needs to take a long-term view on their business with regards to sustainability vis-a-vis 1. Customers will place a higher emphasis on sustainability factor. A key factor will be the need to measure and reduce the carbon footprint.
5
2. Investors will expect business to adopt a more sustainable business models by demonstration and integration risk management methods with respect to climate changes. 3. Employees will be incentivised to transfer their sustainable practises to workplaces. 4. There will be increasing political and legislative support for sustainability work processes started by business. 5. Industry alliances will be formed to set standards and promote/put in new way of thinking on a green and sustainable way.
Behavioural Trends and Major Shifts Expected-Changes are already on their way
Lately, people around the world are not only concerned about climate change, but are increasingly assertive towards taking action in favouring more
environmentally-friendly behaviour. The most common efforts, as proved by the Green Trends Survey were to separate waste, to reduce consumption of disposable items, to choose an environmentally friendly mode of transport or recycling.
Rise of Demand for Low-Carbon Logistics
The fact that in UK retail sales volumes of fair-trade products increased from GBP 21.8 million in 1999 to GBP 799 million in 2009(Fairtrade.org) underlines the importance that business fix on green initiatives. Data from both research and market analysis prove that demand for green logistics offerings is increasing. Customers are willing to favour a company with green transport/shipping over a cheaper non-green process business.
How Logistics Industry will change to Sustainability
1. Logistics as a strategy: Logistics will not only be a catalyst to global trade and a defining component towards value creation ± it will also assume strategic importance towards low-carbon economy. 2. Technological change will be achieved with group collaboration between various businesses and government initiatives. This is equally important
because of higher price tag and long-term sustainability.
6
3. Increasing collaboration, as carbon emission reduction becomes a priority to business due to increasing consumer requirements. 4. Change in Business models due to sustainable innovations. 5. CO2 labelling will be widespread and quite common to ascertain carbon footprint. 6. Price tagging for carbon emission will be a normal rather than a catch word in media. 7. A more stringent regulator measure due to carbon pricing is only a matter of time.
Economic Value of Going Green
Green Trends Survey points out that green logistics is or will be important for ³intangible´ reasons like company reputation and for cost savings making more business sense. 1. Growing Customer demand for green products producing more sales. 2. Growing importance of ³Responsible Investments´
Source: DHL Annual Report 2009
Towards a More Sustainable Logistics Operational Solutions
Conceptual and
The rule so far in logistics has been cost and speed, lately an additional dimension begs importance, namely sustainability.We shall now look into conceptual and operational solutions with respect to DHL and their impact on a sustainable logistics solution that not only makes business sense but also has sustainability at its core. 7
Conceptual Solutions Measures like green distribution design or optimal route management are important strategies to minimise CO2 emissions.
Sourcing Strategies: No Business is able to produce a product by its own process.
In fact, more parts are nowadays sourced for production. As any form of transport leads to CO2 emission, this is one good way at looking at reducing emission. The global source method for parts made sense during the 80s and 90s era due to a steady crude oil prices, this no longer hold true. A locally sourced product part not only reduces cost but also reduces the transport CO2 emissions involved.
Manufacturing Changes: Forward stocking has been used and has shown to be an
effective means of meeting consumer demand without any large scale reduction in efficiency and can be looked into. With the increasing use of online purchases it only makes prudent sense to part assemble a part for transport and then comple the te assembly locally.
Distribution Change: Optimising a network design such that nodes and
interrelated routes are taken into consideration may cause a minimal delay but works great for reducing emissions. A common way to make this happen is for similar organisations to come together to share their logistical resources for maximal and energy efficient use.
Modal Mix Alteration: Planes have a comparatively high CO2 footprint when
compared to ships and so on. Choosing the best mode of transport also makes sense. DHL recently undertook a modal mix alteration strategy for a pharmacy company in Europe. Following an effectively chosen distribution change and modal mix model, the companies warehouse were reduced to 15 from present 40 and road transport was adopted that was proven to reduce emissions by 40%. The outcome of the study proved that GoGreen initiative by DHL is not only cost saving but also sustainable and makes business sense.
Route Management: A vast majority of transportation of products is undertaken on
roads. An effectively managed route will not only reduce time and save money on wages but also have a good green signature. This system does require a complex dynamic routing planner to be put in place.
Proper Capacity Management: A properly planned capacity cuts down under
utilisation of resources. In 2008, DHL Freight Euronet implemented proper capacity 8
management tools to improve CO2 efficiency from 100 to 70g CO2 per revenue ton kilometre.
Failure Free Del ivery: Another area that DHL concentrated is failed delivery. A
very good initiative by DHL in this area is the DHL Packstation Initiative. This allowed customers to receive their packages at secure stations with 24/7 access. This not only ensured that packages are delivered to the customers but also at their convenient time. The savings from such initiatives are substantial, from Packstation alone, 40000 kms of trip was saved and this resulted in a CO2 emission reduction of 11 tons.
Operational Solutions While changes to design of networking and mode of transport reduces CO2 emissions, DHL will not be become a low carbon company unless operational changes, especially newer technologies are implemented. We will look into a few cases where DHL can make more changes to its operational structure to reduce its carbon footprint.
Road Freight: At present there is no technology that can completely reduce CO2
emissions but there are a few models that have a lower CO2 footprint which can be used for the purpose.
Hybrid Vehicles: These combine a conventional engine with a high voltage electric
motor supporting the combustion engine. For DHL, hybrid powertrain systems are more suitable for smaller trucks (7.5-12 tons), in this instance the expected gain in efficiency is in the range of 15% to 25% a much larger value when compared to linehaul traffic or heavy-dutytrucks. DHL may implement this at a larger scale to reap benefits on a longer term.
Electric Vehicles: will have a major impact on the logistics industry. First of all
they will have an advantage of nigh-time delivery due to less noise produced. Additionally, they will also clear congestion due to nigh time service. They can also become part of the country¶s intelligent energy infrastructure by serving as source of energy during times of dire requirement. However, the main hurdle for logistics company such as DHL will be the exorbitant initial setup cost such projects command.
9
Bodywork Design: A vehicle¶s size; mass has significant impact on its overall
efficiency, fuel consumption, and gas emission. A recent research by Bandivadekar et al, 2008 has shown that vehicle weight reduction of up to 15% is possible with substantial improvement in fuel efficiency.
Aerodynamics: Air drag is considered to be a major source of wasted energy and
DHL has initiated major changes in the aerodynamics of its fleet to ensure that air drag is reduced. Studies have shown that an optimally shaped vehicle can have a 15% higher efficiency compared to a normal vehicle. DHL has also tried to improve the shape to utilise the space to maximum load capacity.
Source: DHL Annual Report 2009
Eco-Driving Systems: It is a well-known factor that driving style is the single
greatest factor on fuel efficiency. Eco-driving enables/quips the driver on his driving behaviour. For example
y
Display fuel consumption or emission levels is sometimes enough to alert the driver of his driving style.
y
Start-stop assistants remind the driver of optimal turn off points to save idling fuel wastage.
y
Gear-shift indicators to suggest the gears to improve fuel efficiency.
The above methods can lead to a long term reduction of 7% of fuel consumption (Kompfner& Reinhardt, 2008)
10
Employee Empowerment: DHL has involved its employees to push for a greener
future. With a programme christened ³Go-Green Dialog Map´ employees from local facilities brainstorm and evaluate easy-to-implement ways to save energy, water and paper, and to reduce waste. They nominate a person to be the green champion to implement their ideas with an emphasis on independent things and genuine ideas being rewarded.
Conclusion
Being an industry leader DHL is not only a facilitator of global business but also is an influencer of industry practises. The company at the same time understands its responsibility towards sustainability and has taken a number of initiatives to maintain and grow a business that has sustainability as a core value with both economic and ecological sense.
Changes will happen and while there is no exact blueprint for ³carbon-free logistics´ a sustainable, low carbon logistics solution is within reach and can be implemented if only companies have a long term view. While there is no silver bullet that will transform the logistics into a carbon free industry overnight a number of factors will speed on the revolution. The Green Trends Survey clear points to a clear desire to have sustainability at the core of business, this clearly point to the fact that economic necessity, customer requirements/demands and regulatory measurements will drive the change.
11
Bibliography
1. Razamith Sovereign 2008, Importance of Supply Chain Management in Modern Businesses. 2. Study Towards Sustainable Logistics, December 2010 3. Carbon Trust (2007), Energy Efficiency ± Best Practise Programme (EEBPP) ± Technology Overview. 4. Klaus, P, Kile, C (2008/2009), The Top 100 of Logistics, DVV Media Group, Hamburg 5. McKinnon, A. (2010), Green Logistics: The Carbon Agenda.
http://www.logistics.pl/pliki/McKinnon.pdf 6. Wyatt, K (2007), µTaking Light Steps to Cut Carbon Emissions, UKWA, August [online], Available at http://www.ukwa.org.uk 7. DHL Annual Report 2009
12
doc_126813286.docx