Supply Chain Collaboration essential for eco-friendly logistics operations-SCALA Consulting Annual Logistics Debate

More environmental logistics strategies and operations will come - but this will be as a result of consumer pressure and will require collaboration between supply chain partners and a culture of trust.

This was the key message which emerged from the SCALA Consulting Annual Logistics Debate. The
debate, "Will environmental issues force logisticians to think the unthinkable?" was held on July 12th in association with the West Midlands CILT (UK).

It was also clear from anecdotes from the speakers and delegates that doing the right things in logistics terms brought major environmental benefits in less packaging; fewer vehicles; fewer journeys; and less fuel.

The speakers from a retailer, food manufacturer, logistics service provider and Friends of the Earth, were:

John Perry, Managing Director, SCALA Logistics Consulting
Chris Robinson, International Supply Chain Manager, Tetley Tea
Terry Murphy, Distribution Director, Dixons Stores Group International
Rebecca Jenkins, Director, Wincanton
Chris Crean, Transport Campaigner, Friends of the Earth
The chairman was David Grahamslaw, vice-chairman of the West Midlands CILT.

John Perry, Managing Director, SCALA Logistics Consulting, said there were three key questions which companies should ask themselves: would they put the environment before cost benefits?; would they collaborate with competitors?; would they reduce customer demand for the benefit of the environment?

"There is a lot of talk at the moment about our responsibilities as businessmen and logisticians towards the environment", he said. "But is this just a case of senior management PR, or is it really serious this time?"

Chris Robinson, International Supply Chain Manager, Tetley Tea believes it is not a case of thinking the unthinkable, but of thinking in terms of the environment, society and the economy - and applying this to all decision making. "We should not be ashamed of saying that we are looking to make a profit" he said. "But we must act in a responsible way."

Chris believes that there has been an artificial demand created for out of season produce and products. "Who, I wonder, demands to buy apples all year round? Who insists on having fresh vegetables of all varieties all year when an attempt to buy a pair of shorts in October or a top coat in April is met
with incredulity by some stores? Is this demand created by the consumer - or the retailer?"

He also called for more collaboration across the supply chain. "In the UK today the demand is to supply goods on an as required basis to the various infrastructures established by retailers in the constant search for economy and efficiency. Is this environmentally driven? The opportunities for logistics collaboration are immense and these need to be fostered not imposed. Every organisation will have specific circumstances that might suit closer ties and collaborative approaches but it is not a one size fits all

He warned of the social impact of changing things too quickly. "The problem we now have is that having provided the service and with suppliers around the world gearing up to meet this demand, to stop could be detrimental to some fragile economies. Already more than one million people in Africa are dependant upon trade supplying fresh fruit and vegetables to Britain. Once again it is a balance that is required, this time between environmental impact and sustainability."

He said that Tetley had achieved efficiencies in it logistics processes which were environmentally friendly and beneficial to the company.

These included:

. The number of vehicle loads between factory and warehouse was reduced by 28% and density per pallet increased by up to 50% by the introduction of new soft packs.
. Working on ensuring that we minimize our empty running and achieve a yearly utilization of around 80% by carrying return loads for many organizations and specifically collaborating with our suppliers and customers to ensure we had a 'best fit' solution.

Terry Murphy, Distribution Director, Dixons Sores Group International said the company had recently transformed its supply chain - and a side effect was significant environmental benefits. However companies must get the environment and the impact of logistics further up the supply chain and corporate agenda. "We must tackle environmental problems as an industry wide initiative and it is up to the 3PL logistics service providers to seize the initiative" Terry said.

Dixons group does many thousands of home deliveries every week and the Waste Electrical and Electronic Equipment (WEEE) Directive has become an issue. "Following a promotion on free white goods collections and recycling we are currently doing 64% of pick ups when we do home deliveries. "This is better than our Norwegian colleagues who were regarded in the group as the green benchmark" Terry said.

Rebecca Jenkins, a director of Wincanton, is championing the reduction of the carbon footprint across Wincanton. "There is a sound business case for tackling environmental issues, but there is a lot of hype in what is said", Rebecca told the delegates. "The fact is that young people are very concerned and getting more concerned. They no longer want just talk - they expect action now".

"Consumers will force the issue and that is why companies are looking at long term protection of their brands. Companies like NIKE want to show tomorrow's consumers that they are acting today to protect the environment", Rebecca said. Other examples she gave for companies taking positive action
in the supply chain were Wal-Mart, with a balanced environmental score card for suppliers and Sainsbury with the eco friendliest UK DC in Northampton.

"The truth is that no one has all of the answers, and there is a need for a step change now. We must change our thinking now", she said. "We need to have a culture of trust and share information. Wincanton would be prepared to collaborate in this way with customers and competitors. We could establish a benchmark for environmental KPIs and draw up a programme for targeted action on those KPIs. This would enable us to create a model for tackling environmental issues."

Wincanton has conducted a full environmental audit and created a strategic plan based on the results. "We recycled 250,000 tonnes of environmental waste and cut fuel by 5% with safe and efficient driving programme. These are all good things but not enough"

Chris Crean, Transport Campaigner, Friends of the Earth, said that it is time for logisticians to see themselves as part of the solution, not part of the problem. "Where possible we need local sourcing, products and people and you should be thinking think 'our' environment - not 'the' environment.

"Beware of snake oil salesman who have easy answers and 'gurus' who are giving us green spin", Chris said. "We are at the start of a big journey: One thing which influence everyone tonight is that we are coming to the end of cheap oil"

"One environmental problem created by the logistics industry is the demand for land for logistics centres. "This will lead to many extended legal battles in the coming years." Chris said there is a need for more local logistics, operating over shorter distances. "Everyone has said tonight that you must be willing to co-operate with competitors. This is obvious - but will it happen?"

On the role of rail in freight movement Chris commented: "The Government should invest more in rail - but even doubling freight capacity would not solve any problems. The rail industry is very good with people but not very good with freight. The problem is that no one in central government takes
rail freight seriously. We need a 'national spatial strategy' for whole of the UK" he added.

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