Throughout the past decades, the rapid global economic growth increased the level of the products consumption. Globalization provoked the expansion of goods distribution streams worldwide. Manufacturing, storage, and consumption of goods induced the negative impacts on the natural environment. Global warming caused by the extensive greenhouse gas emissions is regarded as one of the most significant modern political, social, and environmental issues.
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According to the recent statistics, since the end of the 20th century, the emissions caused by the cross-national transportation were increased to over 50%, and the further expansion of the international trade will provoke even greater increases (Abe, Hattori, & Kawagoshi, 2014). Nowadays, governments, communities, and organizations recognize that the measures for the current problems resolving should be undertaken, and, according to multiple research studies, green logistics may provide the necessary solutions.
The research of the operations and activities involved in green logistics, environmental transportation, and distribution management helps to evaluate their impacts on the environmental conditions at the regional and global levels. It is suggested that the realization of green logistics strategies within the organizational context may significantly improve the corporate performance, refine policies, and reduce financial costs.
The given paper is dedicated to the analysis of the relations between environmental protection principles and supply chain management, as well as the integration of the environmental regulations into logistics. The review of the recent research findings will assist in the evaluation of current tendencies in green logistics and the identification of potential advantages and disadvantages of compliance with the environmental considerations in supply chain management.
Since the logistic operations contribute to the deterioration of the environmental state, the integration of ecological principles into supply chain management may help to increase the ecological sustainability and consolidate the internal corporate culture, and, as a result, create multiple benefits for the particular organizations and society as a whole.
Significance and Implications of Logistics System
The term of logistics correlates with the ideas of management and optimization of the financial and informational streams through the application of modern technologies and realization of progressive economic decisions. Traditionally, logistic operations are meant to integrate the internal and external material flows and to direct them for the achievement of the final objectives in business (Gechevski, Kochov, Popovska-Vasilevska, Polenakovik, & Donev, 2016).
The logistic activities are the actions connected to the emergence, transformation, and consumption of the material resources limited by the boundaries of a particular logistic task: loading, unloading, transportation, storage, packing, reception, sorting, etc. And one of the major functions of logistics as a system is the integration of the multiple logistic operations aimed.
Organizational logistics is the complex and well-organized economic system comprised of a number of interrelated elements which participate in the uniform process of managing the material flows. Logistic strategies play the essential role in the overall organizational performance and largely influence the processes of production, distribution of goods, and the provision of high-quality services for customers. The effective logistics strategies thus positively affect the working productivity and efficiency – a well-elaborated, adequate logistics system may be regarded as a competitive advantage (Gechevski et al., 2016).
However, like any other business and economic activities, logistics contributes to the deterioration of the ecological situation. The negative impacts of logistic operations include the construction of organizational facilities associated with deforestation, damage to the soil and groundwater ecosystems; air, water, and soil pollution caused by the waste discharge and transportation, etc. (Marchet, Melacini, & Perotti, 2014).
Therefore, the companies need to consider the ecological aspects to minimize the destructive consequences of logistic operations. The aspect of ecological sustainability should be taken into account at every stage of the production cycle and all levels of supply chain functioning including the development of new products, selection of materials, the process of manufacturing, distribution operations, coordination of waste utilization, and recycling processes (Marchet et al., 2014).
All these aspects of ecological consideration are designed and implemented in green logistics, the practical and theoretical activities of which are aimed at the inclusion of ecological concerns to all phases of material flows movement for the optimization of resources consumption and minimization of destructive influences on the environments.
Definition and Major Principles of Green Logistics
The process of the economic development must include the social and environmental considerations to meet the standards of global sustainability. Sustainability is regarded as the process of development that fulfills the needs and interests of the present time and, at the same time, does not compromise the opportunities for the future generations to meet their own needs (Marchet et al., 2014). Nowadays, the researchers make significant efforts to apply the concept of sustainability to the context of logistics, and, as a result, the conception of green logistics has emerged (Pazirandeh & Jafari, 2013; Oberhofer & Dieplinger, 2014).
While traditional logistics “focuses its attention on activities such as procurement, distribution, maintenance and inventory management,” green logistics is referred to the similar activities but, at the same time, it attempts to minimize the negative impacts on the environment (Gechevski et al., 2016, p. 65).
It is observed that the environmental considerations are usually applied in organizational logistics to address such issues as the waste responsibility, purchase of ecological products, reduction of emissions and environmental pollution, energy consumption decrease, and implementation of alternative transportation methods (Ho & Lin, 2012). The consideration of the ecological factors in logistics is represented as the greening of its major functional domains.
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In this way, green logistics as a field can be divided into several subcategories: supply logistics, production logistics, distribution logistics, warehousing logistics, transportation logistics, and informational logistics (Marchet et al., 2014).
Realization of green ideas and introduction of sustainability transportation value implies the technological advancement and the transformation of managerial strategies. According to Marchet and colleagues (2014), the reduction of pollutant emissions and greenhouse gas is one of the principle goals for the efficient and environment-oriented supply chain management, and the shifts towards the execution of transportation by cleaner vehicles or use the alternative fuels is considered as the most effective method of the formulated goals achievement. The significance of more environment-friendly transportation methods usage is now widely recognized because of the government environmental regulations, the rise of costs for fuels, fuel scarcity, and the organizational attempts to increase competitiveness and improve corporate image.
Along with the shifts towards different modes of transportation and fuel efficiency, the researchers suggest the redesign of the transport and distribution strategies. For example, it is possible to relocate the production and manufacturing sites closer to the consumption areas to reduce distances and decrease traffic (Marchet et al., 2014). The improvements in the vehicle utilization are regarded as the optimal way to integrate environmental performance into the economic growth of the organization, and it is observed that the consideration of transportation modes leads to the efficient utilization of resources (Pazirandeh & Jafari, 2013). In this way, by improving the environmental performance, the companies may attain a higher cost and time efficiency.
Green Logistics Operations
Transport induces the massive eco-destructive impacts followed by the excess rates of emissions (carbon oxides, sulfur oxides, nitrogen oxides, lead compounds, etc.) which not merely cause environmental deterioration but also damage human health. To minimize the negative influence of on the environment, the organizations may use ecologically friendly methods of transportation; increase the level of drivers’ qualification, and educate them for driving according to energy-efficient principles; optimize the transportation routes; and implement the multimodal schemes of transportation by increasing the number of containers per a vehicle (Blanco & Cottrill, 2014).
The greening of supply chain implies the provision of ecologically acceptable factors of production required for the manufacturing processes, and it is meant to minimize the load on the environment (Ho & Lin, 2012). Based on the combination of these basic principles of green supply management, it is important to select the suppliers of resources and materials according to the environmental criteria equally to the costs, time, and quality considerations. It means that the companies would build the partnerships only with the suppliers who themselves conduct according to green principles, and would prefer to purchase the ecological and more expensive materials rather than cheap and hazardous ones.
Green distribution involves the evaluation of distribution channels according to criteria of environmental impacts. Moreover, it is necessary to form and arrange the channels of reverse material streams and use the ecologically acceptable packaging materials which can be reused and recycled multiple times (Gechevski et al., 2016). It is worth mentioning that the distributional logistics is closely interrelated with marketing management, and the multipurpose analysis of market conditions should be conducted considering the ecologic preferences of the customers because it will help to organize the distribution channels rationally (Gechevski et al., 2016).
When taking into account the green principles in the production logistics, it is important to follow the rules and norms of the environmental legislation and create the system of ecological management in the enterprise. The compliance with the ecological standards and usage of green technologies and materials is the basic rule of green production. The ecological production processes ensure the resources and energy consumption efficiency, and the reduction of production waste (Pazirandeh & Jafari, 2013). Moreover, green production principles, including the elimination of the hazardous materials usage, guarantees the provision of comfortable and ecologically safe working conditions for employees.
The greening of the given functional area implies the ecologically rationalized location of storage facilities, usage of energy-saving technologies, and the reduction of waste (Pazirandeh & Jafari, 2013). The greening of the given functional area implies the ecologically rationalized location of storage facilities, usage of energy-saving technologies, and the reduction of waste (Pazirandeh & Jafari, 2013).
The managers need to pay greater attention to the storage of hazardous goods such as explosives, flammable chemicals, compressed gas, toxic substances, radioactive substances, etc. and fulfill all the necessary safety measures throughout the storage period (Ho & Lin, 2012). In this case, the storage facilities should be kept at the remote distance from the residence areas or regions with the fragile ecosystems; the facilities should be constructed of the fire-resistant materials and should be appropriately equipped, and should be well-protected and maintained by the qualified personnel.
Green Logistics and Corporate Knowledge Management
According to Ho and Lin (2012), the effectiveness of the technical innovations as well as a successful adoption of newly designed environment management strategies in logistics and transportation highly depends on the quality of human resources and knowledge management. Adaptation to new activities and practices is a complex process that requires the transformation of personnel operability and mode of functioning.
A high level of employees’ competence and well-developed professional capabilities facilitate the organizational transition to change. Therefore, the elaboration of training programs, development of the necessary skills, and the increase of employees’ awareness about the issues related to environmental sustainability play one of the crucial roles in the environmental management, and logistics in particular (Ho & Lin, 2012).
A well-planned coordination of personnel increases their level of involvement and commitment to new practices. A high level of qualification, in-depth knowledge, and competence of personnel may thus be regarded as one of the crucial factors for the effective integration of green logistics values into the corporate culture, and environmental strategies change.
Factors Influencing Consideration of Green Logistic Principles
The organizational leadership may be stimulated for the elaboration of green logistic strategies and development of environmental sustainability initiatives by many factors, and the motivation may be of both external and internal characters. The external factors include the governmental policies, legislation, laws, customer preferences and requirements change, social expectations, desire to meet the demands of business partners, excess competition in the market, attempts to create the competitive advantages, and some others (Ho & Lin, 2012).
The internal factors stimulating the sustainability initiatives adoption are the profitability increase, the improvement of the working environment, the increase of organizational efficiency, the reduction of costs and expenses, the enhancement of the organizational image, and enhancement of the overall business performance indicators (Ho & Lin, 2012).
The organizational efforts to meet the social expectations, needs, and interests are of especial interest because through the performance of their social and environmental responsibilities the companies give a form to the concept of Corporate Citizenship that implies that the organizations cannot be perceived as the entities that act independently of and separately from the society but rather can be represented as the equal citizens of a particular community in which they operate (Sohn, Sohn, Klaas-Wissing, & Hirsch, 2015).
In this way, a company which considers the interests of its stakeholders in business conduct, including such vital interests as the environmental stability, represents itself as a good corporate citizen. The attempt to be a corporate citizen implies the recognition of the necessity for the responsible and ethical business conduction.
The principles of Corporate Citizenship may be regarded as one of the most significant reasons for integration of the strategies oriented to the achievement of environmental sustainability into the corporate culture because it helps to improve corporate reputation, and significantly increase customer attraction (Isaksson & Huge‐Brodin, 2013).
Despite the recognized importance of green logistics, there is still an insufficient amount of research findings covering the potential advantages of sustainability-oriented environmental strategies implementation. Changes in the modes of transportation, shift to alternative fuel use, elaboration of the effective strategic decisions, rearrangement of facility locations, as well as many other environmental initiatives, are commonly regarded as cost- and time-consuming practices (Pazirandeh & Jafari, 2013).
However, many researchers make great efforts in order to identify the correlation between the facilitated development of corporate competitive advantages, and the companies’ effective environmental performance, and it is shown that the environment-oriented practices may significantly enhance many of organizational indicators (Marchet et al., 2014).
According to Marchet and colleagues (2014), the benefits that the company gains after the implementation of the sustainability initiatives can be “tangible,” such as effectiveness and efficiency increase, and “intangible,” such as improvement of the organizational image” (p. 800).
The tangible impacts are related to the economic or the environmental estimations and data. From the economic viewpoint, the compliance with green logistics principles leads to the reduction of material costs and resources consumption. It is observed that optimization of the distribution centers in terms of their locations and quantity, appropriate transportation policies, as well as usage of efficient fuels and ecological vehicles, may lead to the overall long-term costs decrease (Ho & Lin, 2012). From the perspective of the environmental benefits, the performance of green logistics causes the reduction of emissions, toxic materials consumption, industrial waste discharge, water and energy waste (Marchet et al., 2014).
The potential intangible positive impacts of green logistics implementation involve the enhancement of the organizational image, improvement of life quality, and motivation for the environmental problems resolving (Ho & Lin, 2012). According to Oberhofer and Dieplinger (2014), the corporate environment-oriented behavior may increase the customers and suppliers’ attraction. Moreover, the integration of the environment protection values into the organizational culture may increase the attraction of the potential employees and human resources retention.
Despite the fact that the transport is regarded as the principle cause of the excessive air and water pollution, many organizations continue to disregard green logistics principles and often underestimate the positive impacts of the environmental practices on the environmental condition and overall business performance. Although the international legislature attempt to control the amounts of emissions and undertake the legal measures to reduce the pollution rates through the adoption of standards and taxes increase, their attempts do not have the substantial results. Many researchers devote their studies to the investigation of the benefits of the environment-oriented practices and green logistics, in particular.
As the conducted literature review makes it clear, the realization of green logistics strategies at the level of organization may have enduring positive outcomes in the improvement of environmental condition and other business indicators. Therefore, it is important to promote the further research in the area and raise awareness about the topical environmental issues among the logistics practitioners and organizational leadership.
The conducted literature analysis helped to identify the causes and major motives for the environmental initiatives adoption as well as the potential benefits which a company may attain through the effective implementation of green logistics strategies. It is possible to say that the favorable effects of green logistics implementation are multidimensional. The problem of the environmental instability has gained significant importance during the past decades, and the environmental concern nowadays becomes a social value.
Therefore, by applying green logistics in practice, the companies, first of all, contribute to the improvement of environmental state and add value to business operation and service provision. The researchers observe that the provision of value-added services, as well as the inclusion of environmental concerns in the corporate culture, demonstrates a courteous organizational attitude towards its stakeholders (customers, employees, partners, and members of local communities). As a result, the organizations develop the intangible competitive advantage of customer attraction and enhanced reputation that ultimately lead to better financial results and stability.
However, the research data related to the relationships between the sustainable logistics strategies, environmental performance, and their relation to the financial performance of organizations is under-represented, and the scarcity of findings may be regarded as one of the barriers to the universal implementation of green logistics in the enterprises. The balance between the environmental solutions and the business concerns in logistics and supply chain management is of significant importance.
While the improvement of the environmental quality in an attempt to meet the external pressures and requirements increases costs, the companies need to find ways to sustain the financial activity in business and avoid economic declines. Therefore, the further investigation of the balance between the environmental performance and the economic performance will contribute to a more effective compliance with the environmental regulations and creation of the favorable environment for the wide-spread acceptance and implementation of green logistics.
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Gechevski, D., Kochov, A., Popovska-Vasilevska, S., Polenakovik, R., & Donev, V. (2016). Reverse logistics and green logistics way to improving the environmental sustainability. Acta Technica Corviniensis – Bulletin of Engineering, 9(1), 63-70.
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