Published on October 25, 2009
Turn an ethical question into an asset!
today I suppose you have already experienced the thrill of a jeep safari as I did in the Algarve, Portugal. Unfortunately, during this safari you are not able to see the BIG 5 like in Africa. Instead, you can learn an awful lot about green logistics of oranges. After driving a while, enjoying nature, tasting local specialties, you sometimes need to find some sugar to raise your energy levels. In the Algarve this is really easy: you will find oranges everywhere (in the right season) lying on the ground untouched. The interesting guide which came with the safari package remarked that I was extremely lucky. It happened that this the only way to eat Portuguese oranges in Portugal. I was surprised! You too?! How is this possible?
today Most oranges in Portuguese supermarkets and groceries are imported from Turkey. The costs of producing and transporting them to Portugal from Turkey are far lower than doing the same for the Portuguese oranges. Fruit farmers in Portugal do not see a way to compete with the imported oranges because of the low price offerings of Turkish oranges. That is why they fall on the ground and nobody cares about these oranges, except we of course! Not really a green logistic network you might say!
today Suppose you are the CEO of a large international orange producer and distributor. What would you decide? Do nothing or act now?!
future If the temperature increase will rise above this threshold, the world we live in will change forever…
future Just take a look at the most intriguing number: 1.5 billion; the number of lives that are in danger if temperature increases with more than 2° C. For most countries in the industrialized world such a temperature rise will seem pleasant because these countries are situated in an average climate, but remember the following. It is our problem too. First of all, it is during the industrialization, while economically a good thing, has caused the temperature rise. Secondly, it also a problem for the people living in the industrialized world. Where do 1.5 billion people - who are not able to find enough water in their country - have to live?
future Maybe in this European city? Do you have an idea which city it is?
future YES, you are right: COPENHAGEN!!! Why is this amazing city so important?
future The European Union (EU) wants to tax carbon emissions much more severe. The EU has not stipulated such severe measures yet, because of the fear that the EU will loose their competitive advantage vis-à-vis the USA and China. The latter countries have not formally committed to a considerable reduction of carbon emissions. The expectation is that Copenhagen will serve as the basis for a joint commitment (EU, United States, China, etc) to make the reduction of carbon emissions reality. When (not if) this is the case, EU will surely tax carbon emissions to a point that citizens, business and governments will alter their behavior to a more carbon friendly way of living. From that point on, reduction of carbon emissions is not only an ethical question, but something which is clearly visible in the balance sheet. Companies who produce and transport more eco-friendly will have a competitive advantage.
what to do What has your company already done to reduce carbon emissions? Has it already introduced new eco- friendly technologies? Has the company trained its employees to drive more efficiently? A driving course can improve the efficiency up to 30%. Does your company assess logistic network improvement possibilities through green glasses?
what to do An international courier express company manages a logistic network to bring laptops produced in China to Europe. The laptops are seen as a very fast moving product as a consequence of rapid technology advances and corresponding price strategies. A laptop is almost ancient history by the time it arrives. To this end, the focus lies primarily on air freight. What would the results be if the focus shifted to sea transport. After solving this new logistics puzzle, the reduction in terms of costs and carbon emissions is amazing. There is one catch, more sea freight means a prolonged lead time. This adds a important balancing exercise: how do you outweigh the expected loss in sales due to lowering service and the reduction in costs carbon emissions?
NO, this is proofed by the next case.
In practice, we have encountered the next remarkable example. Two companies in the fast moving consumer goods sector are situated in the same industrial zone practically lying next to each other. On top of that, these companies deliver every week more than 50% of their combined volume to the same customer but in separate trucks. Do you know what the improvement potential is of this supply flow when both companies would work together? Without sacrificing their service levels….
what to do A striking estimated reduction of 40%…
what to do But also even more striking…
what to do Let’s get back to our internationally recognized orange producer. What will you do now if you were in the shoes of the CEO? Do nothing or act?!
what to do
more info John Poppelaars Principal Consultant mail email@example.com Patrick Schittekat PhD Researcher mail firstname.lastname@example.org skype patrick.schittekat Visit John’s blog OR @ Work for more details: http://john-poppelaars.blogspot.com/
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