Sustainable distribution

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]

Definition

Sustainable distribution refers to the macroeconomic allocation of the objects which are to be distributed (goods, services, rights, fees and information) while integrating sustainability issues without compromising any of the conventional purposes that distribution has to 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]

In order for distribution processes to be considered sustainable, characteristics of sustainable products and services have to be derived and applied:

  1. Recipient’s satisfaction: sustainable distribution has to ensure satisfaction of demand by means of time and place.
  2. Dual focus: it should tackle social and ecological problems
  3. Life-cycle orientation: sustainable distribution processes have to suit the life-cycle approach of sustainability products in order for them to be completely sustainble. There is also a close link to the post-use phase as reverse logistics complete the distribution process
  4. Significant improvements: sustainable distribution has to deliver a substantial reduction of environmental and social impacts on a global level
  5. Continuous improvement: permanently monitoring and improving socio-ecological impacts of distribution processes is needed in order to implement newest (efficient) technology developments and latest perceptions of the sustainability term.
  6. Competitiveness: sustainable distribution has to be at least as competitive as conventional distribution processes in order to be successful in the long run. Environmental and social issues should be tackled without compromising the efficiency of the conventional distribution functions.[4]

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.[7]

Direct transportation is more efficient when large quantities are to be moved, whereas transportation through regional distribution centers is most efficient in case of small amount of products.[8] 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.[9]

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 would be movies, music or software.[10] 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.[11]

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.[12]

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.[14] According to Sustainable Packaging Coalition, packaging can be considered sustainable if it meets the following criteria:

Besides the traditional “3 R’s” of “reduce”, “reuse”, and “recycle”,[16] the “7 R’s” of Eco Friendly Packaging principles should be applied to the packaging and product development in order to move it 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 along time and costs optimization.[19]

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.[20] 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 though to be able to recognize, understand and cope with sheer number of emerging labels dealing with specific aspects of the sustainability agenda.[21]

Reverse logistics

Reverse logistics has become an important extension within the supply chain as it carries high potentials to achieve 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 have to be disposed in order to make materials available for recycling or reuse.[22] 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 already have to be designed and developed in accordance with easy and inexpensive disassembling steps.[23]

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 have to be picked up in private households, the dimension of take-back systems has to be determined particularly per product and with respect to its value, disassembling costs, and potential inconveniences inherent for customers.[24] 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.[25]

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.[26]

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.

References

  1. ↑ Schulte, Dr. Christoph (1999). Logistik. München: Verlag Vahlen. pp. 371–414. ISBN 3-8006-2454-0.
  2. ↑ 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. ↑ "Distribution".
  4. ↑ 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.
  5. ↑ Schulte, Dr. Christoph (1999). Logistik. München: Verlag Vahlen. pp. 371–414. ISBN 3-8006-2454-0.
  6. ↑ 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.
  7. ↑ Flint, Daniel J.; Larsson, Gammelgaard (2008). "Exploring Processes for Customer Value Insights, Supply Chain Learning and Innovation". Journal of Business Logistics. 29 (1).
  8. ↑ Chopra, S.; et al. (2010). Supply Chain Management: Strategy, Planning, and Operation. New Jersey: Pearson.
  9. ↑ Nidumolu, R.; et al. (2009). Why sustainability is now the key driver of innovation. Harward Business Review. pp. 57–64.
  10. ↑ Chopra, S.; et al. (2010). Supply Chain Management: Strategy, Planning, and Operation. New Jersey: Pearson.
  11. ↑ Nidumolu, R.; et al. (2009). Why sustainability is now the key driver of innovation. Harward Business Review. pp. 57–64.
  12. ↑ 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.
  13. ↑ "Warehousing".
  14. ↑ "Sustainable Packaging".
  15. ↑ "Sustainable Packaging Coalition, Definition of Sustainable Packaging, 2009" (PDF).
  16. ↑ Wu, Haw-Jan; Dunn, Steven C (1995). "Environmental responsible logistics systems". International Journal of Physical Distribution and Logistics Management. 25 (2).
  17. ↑ 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.
  18. ↑ "Sustainable is Good Blog by Dennis Salazar , 2007".
  19. ↑ McKinnon, Alan C. (2005). "The economic and environmental benefits of increasing maximum truck weight: the British experience" (PDF). Transportation Research (D10): 77–95.
  20. ↑ 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.
  21. ↑ 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.
  22. ↑ 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.
  23. ↑ de Ron, A.J. (1998). "Sustainable Production". International Journal of Production Economics (56-57): 104.
  24. ↑ 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.
  25. ↑ Foreword (2008). "Sustainable Supply Chain Management". International Journal of Production Economics (111): 193.
  26. ↑ 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.
  27. ↑ 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.

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