Sustainable Logistics and Supply Chain Management

Sustainable

Logistics and

Supply Chain

Management

i

THIS PAGE IS INTENTIONALLY LEFT BLANK

ii

0

Second edition

Sustainable

Logistics and

Supply Chain

Management

Principles and practices for sustainable

operations and management

David B Grant, Alexander Trautrims

and Chee Yew Wong

iii

Publisher’s note

Every possible effort has been made to ensure that the information contained in this book

is accurate at the time of going to press, and the publishers and authors cannot accept

responsibility for any errors or omissions, however caused. No responsibility for loss or

damage occasioned to any person acting, or refraining from action, as a result of the

material in this publication can be accepted by the editor, the publisher or the author.

First published in Great Britain and the United States in 2013 by Kogan Page Limited

Second edition published 2017

Apart from any fair dealing for the purposes of research or private study, or criticism or review,

as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be

reproduced, stored or transmitted, in any form or by any means, with the prior permission in

writing of the publishers, or in the case of reprographic reproduction in accordance with the terms

and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be

sent to the publishers at the undermentioned addresses:

2nd Floor, 45 Gee Street c/o Martin P Hill Consulting 4737/23 Ansari Road

London 122 W 27th St, 10th Floor Daryaganj

EC1V 3RS New York, NY 10001 New Delhi 110002

United Kingdom USA India

www.koganpage.com

© David B Grant, Alexander Trautrims and Chee Yew Wong, 2017

The right of David B Grant, Alexander Trautrims and Chee Yew Wong to be identified as the authors

of this work has been asserted by them in accordance with the Copyright, Designs and Patents

Act 1988.

ISBN 978 0 7494 7827 8

E-ISBN 978 0 7494 7828 5

British Library Cataloguing-in-Publication Data

A CIP record for this book is available from the British Library.

Library of Congress Cataloging-in-Publication Data

Names: Grant, David B., author. | Trautrims, Alexander, author. | Wong,

Chee Yew, author.

Title: Sustainable logistics and supply chain management : principles and

practices for sustainable operations and management / David B Grant,

Alexander Trautrims and Chee Yew Wong.

Description: Second Edition. | New York : Kogan Page Ltd, [2017] | Revised

edition of the authors’ Sustainable logistics and supply chain management,

2015. | Includes bibliographical references and index.

Identifiers: LCCN 2017001791 (print) | LCCN 2017004774 (ebook) |

ISBN 9780749478278 (pbk.) | ISBN 9780749478285 (ebook)

Subjects: LCSH: Business logistics. | Production management.

Classification: LCC HD38.5 .G694 2017 (print) | LCC HD38.5 (ebook) |

DDC 658.5–dc23

LC record available at https://lccn.loc.gov/2017001791

Typeset by Integra Software Services, Pondicherry

Print production managed by Jellyfish

Printed and bound by CPI Group (UK) Ltd, Croydon CR0 4YY

iv

CONTENTS

List of figures and tables ix

About the authors xi

Foreword by James R Stock xiii

Introduction 1

01 Logistics and supply chain management 8

David B Grant

The nature of logistics and supply chain management 8

Logistics and SCM trends affecting sustainability 12

Sustainable logistics and supply chains 22

Summary 33

References 34

02 Science of sustainability 37

David B Grant

Concepts of sustainability 37

Species and ecosystems 39

Energy 44

Industry 49

Food 53

Population and urban growth 57

Water 59

Summary 61

References 62

03 Freight transport 65

Alexander Trautrims

Impact of freight transport 65

Transport modes 67

v

vi

Strategies to reduce environmental impact of freight transport 73

Wider aspects of sustainability in freight transport 87

Summary 88

References 89

04 Sustainable warehousing 92

Alexander Trautrims

The environmental impact of warehouses 92

The roles and functions of warehouses 93

Warehouse location 95

Handling equipment 96

Assessing the impact 97

Reduction of environmental impact 101

Social dimension of sustainability in warehousing 110

Risks and vulnerability in warehousing 112

Summary 115

References 115

05 Product design, cleaner production and packaging 119

Chee Yew Wong

Background 119

Product design for environmental and sustainable logistics 121

Selection of materials 123

Cleaner production 129

Packaging for the environment 139

Sustainable consumption and logistics 143

Regulatory frameworks 146

Summary 151

References 152

06 Sustainable purchasing and procurement 155

Alexander Trautrims

The role of procurement in the supply chain 156

What is sustainable procurement? 158

Drivers and barriers for sustainable procurement 161

Contents

vii

Procurement frameworks 165

Sustainability labels and certifications 166

Lifecycle assessment 170

Comparing purchasing options 174

Summary 175

References 176

07 Reverse logistics and recycling 179

Chee Yew Wong

Background 179

Circular economy and regulations 181

Product recovery options 186

Reverse logistics 196

Recycling 201

Summary 207

References 207

08 Risk, resilience and corporate social responsibility 211

Chee Yew Wong

Background 211

Risk and resiliency in logistics and supply chains 212

Corporate social responsibility 228

Ethical framework and codes of conduct 235

Global and industrial initiatives 241

Summary 246

References 247

09 Sustainable logistics and supply chain management

strategy 251

David B Grant

Concepts of corporate strategy 251

Theoretical motivations underlying corporate and sustainable

strategy 256

Sustainable logistics and supply chain performance

measurement 261

Contents

viii

Environmental management systems 262

Lifecycle assessment 265

Assessing sustainable choices and initiatives 268

Summary 275

References 276

Index 279

Contents

list of figures

and tables

Figures

FIGURE 0.1 Chapter pathways in this book 4

FIGURE 1.1 A simplified supply chain 10

FIGURE 1.2 A hybrid lean and agile supply chain 18

FIGURE 3.1 CO2

e emissions by transport mode 69

FIGURE 3.2 Well-to-wheels greenhouse gases emissions for future

mid-size car 78

FIGURE 4.1 BREEAM weighting factors for new constructions 98

FIGURE 4.2 LEED weighting factors for new constructions 98

FIGURE 5.1 Design for environment 122

FIGURE 5.2 Cleaner production 130

FIGURE 6.1 Kraljic matrix 165

FIGURE 7.1 Hierarchy of waste management 183

FIGURE 7.2 Xerox’s closed-loop supply chain 192

FIGURE 7.3 Household recycling in the UK 204

FIGURE 8.1 Risk likelihood–impact graph 222

FIGURE 8.2 Risk management strategies 224

FIGURE 9.1 The ‘triple bottom line’ 259

FIGURE 9.2 Application of the 10 tenets, DAPSI(W)R(M) and bow-tie

techniques for environmental management 271

TABLES

TABLE 1.1 Four aspects of eco-efficiency and supply chain

initiatives 30

TABLE 2.1 Highest energy-consuming countries in 2015 48

TABLE 2.2 Lowest energy-consuming countries in 2015 48

TABLE 2.3 Comparison estimated gross domestic product (purchasing

power parity) in 2015 51

TABLE 2.4 World Bank logistics performance index 2016 52

ix

x List of Figures and Tables

TABLE 3.1 Comparison of greenhouse gas emissions by transport

mode 72

TABLE 5.1 List of common hazardous materials 124

TABLE 7.1 Collection schemes 190

TABLE 8.1 Types of logistics and supply chain risk 214

TABLE 8.2 Different types of corporate responsibilities 231

TABLE 9.1 Example of corporate strategy plans in

logistics and SCM 253

TABLE 9.2 Five key competencies for sustainability 258

About the authors

David B Grant is professor of logistics at Hull University Business School

and professor of supply chain management and social responsibility at

Hanken School of Economics, Helsinki. His recent visiting appointments

include the École Supérieure du Commerce Extérieur, Paris and Universidad

de los Andes, Bogotá as the Silla Corona Distinguished Visiting Professor.

David obtained his PhD from Edinburgh University and his thesis, which

investigated customer service, satisfaction and service quality in UK food

processing logistics, received the James Cooper Memorial Cup PhD Award

from the Chartered Institute of Logistics and Transport (UK). His research

interests include logistics customer service, satisfaction and service quality;

retail logistics; and reverse, closed-loop and sustainable logistics. David’s

business experience includes retail, corporate banking, technical design and

consulting, and recent applied research has investigated on-shelf availability

and out-of-stocks, total loss and waste in food retailing, forecasting and

obsolete inventory, service quality and fulfilment in internet retailing, and

consumer logistics. David has over 200 publications in various refereed

journals, books and conference proceedings and is on the editorial board of

many international journals. Recent books include Logistics Management

(Pearson) and Fashion Logistics (Kogan Page) with John Fernie.

Alexander Trautrims, BA (Hons), MSc, PGDip, PhD, is a lecturer in supply

chain and operations management at Nottingham University Business

School, UK. He also holds adjunct positions at Royal Holloway – University

of London, and Copenhagen Business School.

His current research focuses on ethical issues and compliance in supply

chains and the execution and implementation of responsible sourcing

solutions in procurement. He is working closely with UK businesses and

non-profit organizations on the implementation of the Modern Slavery

Act and is the supply chain lead in the University of Nottingham’s research

priority area for Rights and Justice.

He is a member of the Council of Supply Chain Management

Professionals (CSCMP), the Institute for Supply Management (ISM), the

Logistics Research Network (LRN) in the UK and the German Logistics

Association (BVL).

xi

xii

Chee Yew Wong is professor of supply chain management at Leeds

University Business School, UK. His doctoral thesis investigated the coor￾dination of supply chain planning across a toy supply chain in Europe. He

teaches operations, logistics and supply chain management at undergradu￾ate and postgraduate levels, and provides speeches, workshop facilitation

and consulting to supply chain companies. Research interests include supply

chain integration; sustainable supply chain management; reverse logistics;

global value chains; service operations; and third-party logistics service. He

has more than seven years’ business experience in engineering, production,

logistics sourcing and supply chain management in industries such as power,

beverages, food, toys, retail, grocery and manufacturing. Recent applied

research has investigated collaborative forecast and planning, centraliza￾tion of warehouses, implementation of ERP systems, green practices in the

service and manufacturing sectors, and transfer of supply chain manage￾ment knowledge to small and medium-size companies. Chee Yew Wong

has authored over 80 publications in various refereed journals, books and

conference proceedings and is on the editorial board of three international

academic journals. He is a member of the UK Logistics Research Network

(LRN) and European Operations Management Association (EurOMA).

About the Authors

Foreword

In recent years, the subject of sustainability has garnered increased attention

from individuals, companies and governments. Sustainability in sourcing;

sustainability in manufacturing; sustainability in distribution; sustainabil￾ity in marketing and sales; and sustainability in consumption and product

disposition. There is not a single area of business that has not been impacted

in some way by climate change, product stewardship, trying to do more with

less, and improving energy consumption. The stakeholders of companies

are demanding that firms employ sustainable practices in their manufactur￾ing, supply chains, supplier relations, human resources, and other corporate

responsibility efforts. For some firms, sustainability has become a require￾ment of doing business, whether that is in the B2B or B2C sectors. In today’s

omnichannel environment, sustainability has become a key initiative that is

important in a firm’s success, irrespective of whether the firm sells its prod￾ucts or services on the internet, through physical brick-and-mortar stores, or

a combination of both options.

The paradigm of the ‘Triple Bottom Line’ that includes people, planet

and profits, has become the watchword of many companies worldwide. And

rightfully so, inasmuch as all aspects of the triple bottom line are impor￾tant, both to the present and future wellbeing of the planet, its people, and

the economies of the world. Logistics and supply chain management have

significant sustainability impacts on people, the planet, and profits. The

authors, in the second edition of their book, provide a good overview of the

subject matter relating to the various roles that logistics and supply chain

management play in the physical and fiscal health of individuals, companies

and governments. The authors do a good job of highlighting the importance

of sustainability. The book includes coverage of the major sustainability

aspects of logistics and supply chain management, including transportation,

warehousing, purchasing and procurement, product design, production, and

notably, reverse logistics. Writers often ignore the role of reverse logistics,

including product returns processing, in discussions of sustainability. To their

credit, the authors of Sustainable Logistics and Supply Chain Management:

Principles and practices for sustainable operations and management include

that discussion as one of the chapters of their book.

xiii

xiv

The book can be used in the classes at all higher education levels, includ￾ing both undergraduate and graduate courses. The book should be ‘student

friendly’, given the writing styles of the authors, its logistics and supply

chain sustainability coverage, and inclusion of highly topical mini case stud￾ies. The authors do an effective job in relating the theoretical concepts to

practice and what is actually happening ‘in the real world’. The book offers

excellent insights into logistics and supply chain sustainability that will

provide executives, students, and academics alike with information on how

to manage, implement and control sustainability programmes, policies and

procedures within companies. From a pedagogical perspective, this revised

edition includes valuable supporting online materials, including PowerPoint

presentations, chapter summaries, learning objectives, tips for teaching, and

in-class activities.

James R Stock

Fulbright-Hanken Distinguished Chair in Business and Economics,

Hanken School of Economics (Finland)

Distinguished University Professor and Frank Harvey Endowed Professor

of Marketing, University of South Florida (USA)

Foreword