Sustainable distribution

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Sustainable distribution refers to any means of transportation / hauling of goods between vendor and purchaser with lowest possible impact on the ecological and social environment, and includes the whole distribution process from storage, order processing and picking, packaging, improved vehicle loadings, delivery to the customer or purchaser and taking back packaging. [1] [2]

Contents

Definition

Sustainable distribution refers to the macroeconomic allocation of objects that are distributed (goods, services, rights, fees and information) while integrating sustainability issues without compromising conventional purposes that distribution must fulfill. Commonly, distribution means all the processes that occur between producers, retailers and customers. The functions of distribution are physical transportation, storage and warehousing, packaging, labeling, and reverse logistics. [3]

A sustainable distribution processes applies these characteristics—it:

Process

Physical transportation

Transportation refers to the movement of products from one location to another. The fuel required to transport products depends on:

Most transportation infrastructure is owned and managed as a Public good throughout the world. This ensures optimal allocation of investments for maintenance and build-up of transport capacities as needed. Transportation policy aims to prevent abuse of monopoly power, promote fair competition, and balance environmental, energy, and social concerns in transportation.

By means of optimizing a country's transport infrastructure, the distance that products travel can be reduced by creating more localized supply chains and by shifting from roads to rail or from air to sea. Transportation innovations can also contribute to the sustainability of distribution processes by improving fuel-efficiency of engines, optimizing vehicle loads and implementing intelligent transportation management systems. [4]

Direct transportation is more efficient for moving large quantities, whereas transportation through regional distribution centers is most efficient for small numbers of products. [5] Sustainable transportation lowers costs because companies end up reducing the inputs they use. In addition, the process generates additional revenues when it enables companies to create new businesses. [6]

Unlike physical transportation of products over long distances, electronic distribution offers a substitutive way to deliver particular product groups and services to the end-consumer. This can only be applied to physical products that can be turned into intangible products by making them available for download instead of delivering them on media like DVD or CD. Examples include movies, music, and software. [5] Another dimension to reduce environmental impacts of distribution processes lies in the replacement of centralized printing by electronical distribution of master-files to local print-houses. This holds true for newspapers, books, document management systems and mass-advertisements. [6]

Another means to reduce environmental impacts of distribution processes is to face the increased convenience expectations of customers towards availability of fresh and seasonal food. In contrast to the conventional marketing approach and its understanding of distribution, sustainable distribution does not support the supply of seasonable foods all year long. [2]

Storage and warehousing

Warehousing is one of the main spheres of logistics. The very broad meaning of it is storage of finished goods or materials (raw, packing, components) for manufacturing, agricultural or commercial purposes. In fact, warehousing contains numerous functions, like acceptance of products (loading, unloading), inspection, and proper storage. It is the whole system (warehouse management system) that includes warehouse infrastructure, tracking systems and communication between product stations.

Sustainable applications in warehousing
One of the most sustainable trends in storage solutions is the Just In Time technique. It means product delivery directly from supplier to producer without warehousing. But this system has quite limited application as the distances between intermediaries are growing with the globalization process of the world economy. Modern logistics cannot survive without warehousing service, but various sustainable modifications of warehousing infrastructure can be introduced.

There are some basic sustainable attributes available for the warehouse applications that are able to reduce energy consumption and the amount of carbon emission:

Packaging

Rising climate change awareness started contributing to the need of considering sustainability in packaging decisions. Sustainability objectives relate to packaging life cycle in terms of material sourcing, packaging design, manufacturing, transportation and disposal. [8] According to Sustainable Packaging Coalition, [8] packaging can be considered sustainable if it meets the following criteria:

Besides the traditional “3 R’s” of “reduce”, “reuse”, and “recycle”, [10] the “7 R’s” of Eco Friendly Packaging principles should be applied to the packaging and product development to move towards sustainability objectives:

Optimizing packaging materials and design can significantly help to optimize logistics by improving vehicle load. For example, changing firm packaging to flexible can help to deliver maximum lorry load per kilometer travelled, increasing the volume of goods being transported by lorry and thus reduce CO2 emission over time and costs optimization. [13]

Labeling

Labeling is an important means of communicating with consumers about sustainable consumption, and it plays a critical role in shopping for food and domestic appliances. [2] Used as a promotional mechanism, eco-labels inform customers about social and environmental effects, the possibilities of recycling the product and its packaging, methods of production (e.g., bio farming), product’s characteristics (e.g., vegan), or the producer’s way of running business (e.g.Fair Trade / Marine Strewardship Council).

There is a challenge for consumers to recognize, understand, and cope with the sheer number of emerging labels that deal with specific aspects of the sustainability agenda. [2]

Reverse logistics

Reverse logistics has become an important extension within the supply chain as it carries high potential for a sustainable distribution process that fulfills both environmental and social needs. It deals with reclaiming used packaging, as well as unsold and end-of-life products that must be available for recycling or reuse. [2] By taking back waste and packaging, appropriate and environmental-friendly recycling of the product’s components and materials can be ensured while at the same time reducing the amount of waste brought to landfills. Additionally, vehicle loadings can be optimized as empty return trips of trucks employed for distribution processes are avoided in case they take back materials. By combining and implementing these measures, producers can substantially improve their environmental performance and comply with the requirements given by the so-called life-cycle approach.

As a higher goal, reverse logistics may also contribute to lower producers’ dependency on scarce or non-renewable resources by remanufacturing and reusing recycled materials for the production of new goods. The inherent perspective of replacing pollutive and energy-intensive processes of exploitation and manufacturing by remanufacturing complies with a cradle-to-cradle approach. However, for this to be worth the effort, new products must be designed and developed to have easy and inexpensive disassembling steps. [14]

The implementation of reverse logistics faces a number of challenges with respect to sustaining competitiveness of products and to conform to convenience expectations of customers. As end-of-life products are usually returned in varying conditions and must be picked up in private households, the dimension of take-back systems must be determined—particularly per product and with respect to value, disassembling costs, and potential inconveniences to customers. [2] Therefore, a critical success factor is the easiness and accessibility of take-back options to promote a post-use phase that is highly convenient for the customer. Additionally companies have to continuously reduce costs of refurbishment and recycling. [15]

By applying political regulations and obligations banning highly toxic products from being disposed on landfills, by increasing disposal costs, and by promoting incentives for companies or customers who return their products, the return rate and therefore the environmental impact of end-of-use products can be improved. As example, the European Union implemented directions to particularly regulate extended producer responsibilities for end-of-life cars and electrical devices. [2]

Distribution and social sustainability

Sustainable distribution is not only concerned with environmental issues but also with the social impact due to distribution. In the following, direct (working conditions of staff, noise, high levels of traffic, pollution) and indirect (changing landscapes) social impact can be distinguished.

SA8000 is a social accountability standard for decent working conditions with global validity. Improvement in the areas it covers can be achieved by distributors as well as through legal regulation, for example:

However, it is of considerable effort to find out which company works according to SA8000 standard as conforming to the standard is commonly not communicated.

See also

Related Research Articles

<span class="mw-page-title-main">Supply chain management</span> Management of the flow of goods and services

In commerce, supply chain management (SCM) deals with a system of procurement, operations management, logistics and marketing channels, through which raw materials can be developed into finished products and delivered to their end customers. A more narrow definition of supply chain management is the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronising supply with demand and measuring performance globally". This can include the movement and storage of raw materials, work-in-process inventory, finished goods, and end to end order fulfilment from the point of origin to the point of consumption. Interconnected, interrelated or interlinked networks, channels and node businesses combine in the provision of products and services required by end customers in a supply chain.

<span class="mw-page-title-main">Logistics</span> Management of the flow of resources

Logistics is the part of supply chain management that deals with the efficient forward and reverse flow of goods, services, and related information from the point of origin to the point of consumption according to the needs of customers. Logistics management is a component that holds the supply chain together. The resources managed in logistics may include tangible goods such as materials, equipment, and supplies, as well as food and other consumable items.

<span class="mw-page-title-main">Logistics automation</span> Application of computer software or automated machinery

Logistics automation is the application of computer software or automated machinery to logistics operations in order to improve its efficiency. Typically this refers to operations within a warehouse or distribution center, with broader tasks undertaken by supply chain engineering systems and enterprise resource planning systems.

<span class="mw-page-title-main">Packaging</span> Enclosure or protection of products for distribution, storage, and sale

Packaging is the science, art and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of designing, evaluating, and producing packages. Packaging can be described as a coordinated system of preparing goods for transport, warehousing, logistics, sale, and end use. Packaging contains, protects, preserves, transports, informs, and sells. In many countries it is fully integrated into government, business, institutional, industrial, and for personal use.

<span class="mw-page-title-main">Distribution center</span> Building stocked with goods for delivery

A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products (goods) to be redistributed to retailers, to wholesalers, or directly to consumers. A distribution center is a principal part, the order processing element, of the entire order fulfillment process. Distribution centers are usually thought of as being demand driven. A distribution center can also be called a warehouse, a DC, a fulfillment center, a cross-dock facility, a bulk break center, and a package handling center. The name by which the distribution center is known is commonly based on the purpose of the operation. For example, a "retail distribution center" normally distributes goods to retail stores, an "order fulfillment center" commonly distributes goods directly to consumers, and a cross-dock facility stores little or no product but distributes goods to other destinations.

Eco commerce is a business, investment, and technology-development model that employs market-based solutions to balancing the world's energy needs and environmental integrity. Through the use of green trading and green finance, eco-commerce promotes the further development of "clean technologies" such as wind power, solar power, biomass, and hydropower.

Supply-chain optimization (SCO) aims to ensure the optimal operation of a manufacturing and distribution supply chain. This includes the optimal placement of inventory within the supply chain, minimizing operating costs including manufacturing costs, transportation costs, and distribution costs. Optimization often involves the application of mathematical modelling techniques using computer software. It is often considered to be part of supply chain engineering, although the latter is mainly focused on mathematical modelling approaches, whereas supply chain optimization can also be undertaken using qualitative, management based approaches.

Design for the environment (DfE) is a design approach to reduce the overall human health and environmental impact of a product, process or service, where impacts are considered across its life cycle. Different software tools have been developed to assist designers in finding optimized products or processes/services. DfE is also the original name of a United States Environmental Protection Agency (EPA) program, created in 1992, that works to prevent pollution, and the risk pollution presents to humans and the environment. The program provides information regarding safer chemical formulations for cleaning and other products. EPA renamed its program "Safer Choice" in 2015.

<span class="mw-page-title-main">Supply chain network</span> Evolution of the basic supply chain

A supply-chain network (SCN) is an evolution of the basic supply chain. Due to rapid technological advancement, organizations with a basic supply chain can develop this chain into a more complex structure involving a higher level of interdependence and connectivity between more organizations, this constitutes a supply-chain network.

<span class="mw-page-title-main">Unit load</span> Size of assemblage into which individual items are combined for ease of storage & handling

The term unit load refers to the size of an assemblage into which a number of individual items are combined for ease of storage and handling, for example a pallet load represents a unit load which can be moved easily with a pallet jack or forklift truck, or a container load represents a unit for shipping purposes. A unit load can be packed tightly into a warehouse rack, intermodal container, truck or boxcars, yet can be easily broken apart at a distribution point, usually a distribution center, wholesaler, or retail store for sale to consumers or for use.

This is a glossary of environmental science.

<span class="mw-page-title-main">Sustainable packaging</span> Packaging which results in improved sustainability

Sustainable packaging is packaging materials and methods that result in improved sustainability. This involves increased use of life cycle inventory (LCI) and life cycle assessment (LCA) to help guide the use of packaging which reduces the environmental impact and ecological footprint. It includes a look at the whole of the supply chain: from basic function, to marketing, and then through to end of life (LCA) and rebirth. Additionally, an eco-cost to value ratio can be useful The goals are to improve the long term viability and quality of life for humans and the longevity of natural ecosystems. Sustainable packaging must meet the functional and economic needs of the present without compromising the ability of future generations to meet their own needs. Sustainability is not necessarily an end state but is a continuing process of improvement.

<span class="mw-page-title-main">Humanitarian logistics</span>

Although logistics has been mostly utilized in commercial supply chains, it is also an important tool in disaster relief operations. Humanitarian logistics is a branch of logistics which specializes in organizing the delivery and warehousing of supplies during natural disasters or complex emergencies to the affected area and people. However, this definition focuses only on the physical flow of goods to final destinations, and in reality, humanitarian logistics is far more complicated and includes forecasting and optimizing resources, managing inventory, and exchanging information. Thus, a good broader definition of humanitarian logistics is the process of planning, implementing and controlling the efficient, cost-effective flow and storage of goods and materials, as well as related information, from the point of origin to the point of consumption for the purpose of alleviating the suffering of vulnerable people.

<span class="mw-page-title-main">Sustainable engineering</span> Engineering discipline

Sustainable engineering is the process of designing or operating systems such that they use energy and resources sustainably, in other words, at a rate that does not compromise the natural environment, or the ability of future generations to meet their own needs.

Environmentally sustainable design is the philosophy of designing physical objects, the built environment, and services to comply with the principles of ecological sustainability and also aimed at improving the health and comfort of occupants in a building. Sustainable design seeks to reduce negative impacts on the environment, the health and well-being of building occupants, thereby improving building performance. The basic objectives of sustainability are to reduce the consumption of non-renewable resources, minimize waste, and create healthy, productive environments.

<span class="mw-page-title-main">Ifco tray</span> Type of reusable packaging

IFCO trays are a type of reusable packaging for transporting fresh food produce. IFCO SYSTEMS is the name of the company that first developed a pooling service for reusable plastic trays for fresh produce in 1992, when the company was founded in Pullach, Germany. IFCO is the acronym for International Food Container Organization.

Third-party logistics is an organization's long term commitment of outsourcing its distribution services to third-party logistics businesses.

Urban freight distribution is the system and process by which goods are collected, transported, and distributed within urban environments. The urban freight system can include seaports, airports, manufacturing facilities, and warehouse/distribution centers that are connected by a network of railroads, rail yards, pipelines, highways, and roadways that enable goods to get to their destinations.

Ecopreneurship is a term coined to represent the process of principles of entrepreneurship being applied to create businesses that solve environmental problems or operate sustainably. The term began to be widely used in the 1990s, and it is otherwise referred to as "environmental entrepreneurship." In the book Merging Economic and Environmental Concerns Through Ecopreneurship, written by Gwyn Schuyler in 1998, ecopreneurs are defined as follows:

"Ecopreneurs are entrepreneurs whose business efforts are not only driven by profit, but also by a concern for the environment. Ecopreneurship, also known as environmental entrepreneurship and eco-capitalism, is becoming more widespread as a new market-based approach to identifying opportunities for improving environmental quality and capitalizing upon them in the private sector for profit. "

<span class="mw-page-title-main">Closed-loop box reuse</span> Business practice

Closed Loop Box Reuse, is the process by which boxes or other containers are reused many times. It is a form of reusable packaging.

References

  1. 1 2 Schulte, Dr. Christoph (1999). Logistik. München: Verlag Vahlen. pp. 371–414. ISBN   3-8006-2454-0.
  2. 1 2 3 4 5 6 7 8 9 10 Belz; et al. (2009). Sustainability marketing: a global perspective. The Atrium, Southern Gate, Chichester, West Sussex, UK: John Wiley & Sons Ltd. ISBN   978-0-470-51922-6.
  3. ↑ Kenning, Prof Dr Peter. "Definition: Distribution". wirtschaftslexikon.gabler.de.
  4. ↑ Flint, Daniel J.; Larsson, Gammelgaard (2008). "Exploring Processes for Customer Value Insights, Supply Chain Learning and Innovation" (PDF). Journal of Business Logistics . 29 (1). doi:10.1002/j.2158-1592.2008.tb00078.x.
  5. 1 2 Chopra, S.; et al. (2010). Supply Chain Management: Strategy, Planning, and Operation. New Jersey: Pearson.
  6. 1 2 Nidumolu, R.; et al. (2009). Why sustainability is now the key driver of innovation. Harward Business Review. pp. 57–64.
  7. ↑ Tenens, Howard. "Howard Tenens -". www.tenens.com.
  8. 1 2 "Home". Sustainable Packaging Coalition.
  9. ↑ "Sustainable Packaging Coalition, Definition of Sustainable Packaging, 2009" (PDF).
  10. ↑ Wu, Haw-Jan; Dunn, Steven C (1995). "Environmental responsible logistics systems". International Journal of Physical Distribution & Logistics Management. 25 (2): 20–38. doi:10.1108/09600039510083925.
  11. ↑ Jedlicka, Wendy (2009). Packaging Sustainability: Tools, Systems and Strategies for Innovative Package Design. Hoboken, New Jersey: John Wiley & Sons Inc. ISBN   978-0-470-24669-6.
  12. ↑ "Sustainable is Good Blog by Dennis Salazar, 2007". March 2020.
  13. ↑ McKinnon, Alan C. (2005). "The economic and environmental benefits of increasing maximum truck weight: the British experience" (PDF). Transportation Research (D10): 77–95.
  14. ↑ de Ron, A.J. (1998). "Sustainable Production". International Journal of Production Economics (56–57): 104.
  15. ↑ Foreword (2008). "Sustainable Supply Chain Management". International Journal of Production Economics (111): 193.
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