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The paper examines supply chain activities that contribute emissions of greenhouse gases and debate on measures that will aid in mitigate or reverse the growth in freight-related co2 emissions.
Hervani et al (2005) viewed green supply chain as the activities of supply chain in relation to the support of the protection of the environment. These activities encompass green purchasing, green manufacturing, green distribution and marketing and reverse logistics. So the issue of green focuses on the minimisation or elimination of solid, energy, emissions, chemicals or hazardous waste by material suppliers, contractors, service contractors, vendors, distributors and end users within the supply chain (Rao and Holt, 2005). Similarly Authors such as Ho et al., (2009) also expressed green supply chain as limiting the amount of waste within the supply chain activities in order to preserve energy and protect the environment.
In the quest for mankind's sustenance since resource are scarce (Griffiths and Walls, 2004), foods, materials, paraphernalia and fuel must be moved across massive distances. These resources are moved thousands of miles long away from the producers to the consumers within a country, region or continents. Fresh fishes are caught hundreds of nautical miles away from the coast. These commodities requires tens of thousands of roads to be constructed to be linked to the market places and storage facilities such as warehouses which may also require refrigerated space (Murray, 2007). The table below shows the logistical miles some commodities are moved from various countries into the UK and the carbon dioxide (CO2) released into the environment either by sea or air.
According to the Intenational Energy Agency (2007) almost one-third of the global energy demand is used in the manufacturing industry to process primary materials such as iron and steel, cement, paper, non-metallic minerals, chemicals and petrochemicals. Mandil (2007) claim that about 36% of the carbon emission is from manufacturing, 40% from buildings and appliances and 24% from the transport sector globally and that the freight haulage accounts for almost half of the transport emissions. For things to be manufactured, an organisation must coordinate the movement of the materials and information flow from the upstream to the downstream which is termed as supply chain (Carmignani (2009). Throughout the supply chain activities, carbon emissions are released and the packaging material creates carbon footprint into the environment. In this context, Buckley and Buckley (2005) viewed carbon footprint as the measurement of all greenhouse gases produced daily by human activities through the burning of fossil fuels for electricity, heating and transportation, etc. The diagram (figure 1) illustrates the various stages across the supply chain where the emissions usually occur from cradle (obtaining resources from nature) to grave (dumping the waste)
Apart from the CO2 emission, there are other dangerous gases including hydrofluorocarbons, perfluorocarbons or sulphur hexafluoride (SF6), methane (CH4), nitrous oxide (N2O), carbon monoxide (CO), etc are also released through the supply chain activities. These greenhouse gases constitutes to the greenhouse effect (Schmidt, 2009).
Every organisation and household irrespective of the industry is operating and domiciled, in one way or the other will be affected by the emission of greenhouse gas. This could be through sturdy emission-reduction legislation (Lash and Willington, 2007). Therefore reducing these emissions today and the future and is becoming a major concern to all (Rao and Holt, 2005). According to Patel (2009) that companies that have not embraced green practices in their supply chain allow inefficient processes to continue unabated in their businesses causing unnecessary waste and pollution. Citing an example, the United States automotive industry ineffectiveness in their businesses processes allowed the innovative Japanese automakers to become market leaders. This because the resources including raw materials were underutilized and unnecessary energy was used due to inefficient equipment thereby releasing carbon dioxide emission into the environment. The main difference was the Japanese adopting the lean manufacturing system in their operations (Lewis, 2000). Therefore becoming “green” or going “green” through the green supply chain is professed as the means of reducing the firm's supply chain costs and improving the company's business operations as a whole and not only good for the environment (Yug, 2008).
In support of these, Ho et al., (2009) a team of researchers argued that people have the perception that ‘green' brings about higher cost of operations but the philosophy behind it is for suppliers, manufacturers and customers to become creative in their operations which will reduce cost, minimize waste and pollution and efficient use of resources. Rao (2002) in his opinion claim that organisations practicing green supply chain will gain from reducing the cost of operations and in their effort to reduce the carbon emissions into the environment signals for intensive collaborative decision-making processes that will also promote environmental innovations. Authors such as (Lash and Willington, 2007) also claim that going green provides a platform that offers new sources of competitive advantage for organisations that will capitalize on that opportunity.
Mckinnon (2008) pointed out that most of the vehicles capacity are underutilised in the supply chain activities and these vehicles to an extent create congestion on the road. Congestion on the road increases the carbon emissions into the environment. However Agg (2009) argued that since 20 per cent of the carbon emission is attributable to freight transport, reducing the number of underutilised vehicles in the supply chain will reduce the number of vehicles on the road, save fuel, cuts emissions and moreover cuts organisational operational cost and save overhead cost. Citing example, the retailers, food and drink industry such as Coca Cola and Colgate Palmolive uses sophisticated information technology and order processing systems in supporting their suppliers in developing innovative systems to maximise vehicle utilisation, reduce journey mileage and costs. In addition Mckinnon (2008) further suggested that imposing taxes on vehicles will increase freight cost and reduce the demand for road transport leading to less emissions hence switching to cleaner modes.
On the other hand, Leonardi and Baumgartner (2004) suggested that haulage trucks should be enforce to embark on night journeys to curtail congestion and less carbon emission. However Geroliminis and Daganzo (2005) argued that delivering goods at night will affect just-in-time operations by delaying the movement of goods and services to their expected destinations.
Kewill (2008) made a survey on companies and claim that switching to the use of either hybrid, electric or gas powered vehicles and replacing ageing fleets of vehicles, airplanes and ships will also reduce carbon emissions. According to Davies (2009) modern ships designed are capable of emitting 5g of CO2 per tonne-kilometre compared to 50g CO2 per tonne-kilometre of heavy trucks or 540g CO2 per tonne-kilometre of modern cargo plane. Therefore persuading suppliers, manufacturers, etc to understand the significance of the water and rail to their operations will reduce their supply chain cost leading to less carbon emission and congestion on the roads (Carr, 2009). Kewill (2008) further suggested the use of ‘green' warehouses to replace the older facilities and switching to e-commerce will reduce unnecessary use of paper in business activities.
Is speed compromise and total stock
According to Buckley and Buckley (2005) organisations can reduce their carbon footprint and save the environment by reducing their excessive packaging in the productions. This because more energy is required in producing the packages and the extra volume and weight will cause the transporter (lorries, ships, aircraft, etc) to burn more fuel. In an effort to manage its carbon footprint Jaguar Land Rover has drafted a 10 year development plan to resort to the usage of railway system for their inbound deliveries so that they can eliminate over 90 million road miles travelled (Milt, 2008).
Over the past decade Jaguar Land Rover has orchestrated the use of diverse suppliers from the UK/ European supply base whereby its operations focuses on low-cost sourcing and manufacturing vehicles from built-to-stock to built-to-customer. Thus using leagility in its operation which has increased its productivity and reduce its operational cost. This operational strategy has reduced its CO2 emission across its supply chain and other waste are cut off (Milt, 2008).
Sustainability and CSR and Key Performance Indicator
The growth of carbon emissions has been an environmental challenge that requires urgent measures especially from the business organisations to develop a corporate sustainability mindset and implant it into their supply chain activities. Harrison (2009) viewed corporate sustainability as achieving organisational objectives embedded with synergetic approach in dealing with social expectations. And becoming socially accountable brings to bare the corporate social responsibility (CSR) of the members of the supply chain. Harrison (2009) re-emphasized that “it is possible to go green and still run a successful business”. This has been evidence in the operations of some multinational enterprises (MNE). According to Yug (2008) Nestle has employed a company-wide sustainability programme in regards to the use of its product packaging. Between the 1991 and 2006, Nestle worldwide has made $510million savings by initiating an integrated approach that favours source reduction, re-use, recycling and energy recovery.
Mebratu (2009) argue that the operational constraints of small and medium-sized enterprises (SME) in regards to lack of finance which can also be used to employ ‘green' technologies into its operations, limited production and storage capacity in achieving economies of scale, may hold back these enterprises from embracing green. This will make the MNE's to dominate the market which may lead to some of the SME's to be out of business. On the other hand, Wittneben and Kiyar, (2009) suggested capitalizing on energy efficiency gain, switching to renewable energy sources and developing measures to reduce greenhouse gas across the system of production and consumption will help small and medium suppliers and customers or end users to go green.
Furthermore Fisher and Lovell (2009) stated that some corporate firms have taken the initiative of influencing the behaviours of their customers to go green as part of their CSR. Citing the case whereby Ireland's supermarkets charged customers 10p per plastic bag used caused the customers to switch to the usage of “bags-for-life” which was seen as environmentally friendly. According to Auger (2009) thinking of the green sustainability requires the use of vegetable base inks, reducing paper weight for the inlay or cover of a product and improve recyclables. Citing the efforts of some entities such as Sony DADC of Austria, Green Dot of Germany and SLAM recycling of the UK and Poland who are working closely with industrial customers to solve the disposal problem of cardboard and plastic waste. In an effort to be socially responsible, Coca-Cola Hellenic Bottling Company and ContourGlobal constructed a combined heat and power (CHP) plant located at Coca-Cola Hellenic bottling facility in Romania that is capable of lowering CO2 emissions by capturing over 95% of its CO2 emissions for use in industrial and commercial processes (ContourGlobal, 2009). The facility aims at reducing energy use in its operations as part of Coca Cola's environmental protection measures.
However Yug (2008) claim that the keystone to green sustainability is coordination; corporate communication whereby impacts of initiatives will be communicated to customers, shareholders and the general public and collaboration of the supply chain members both upstream and downstream to recognize the financial benefits from the green agenda.
Bodies and policies
The effort of sustaining the environment in response to the increasing emission of gaseous substances and waste into the environment resulting to the global warming brought into force the Kyoto Protocol in February 2005 (Kolk and Pinkse, 2006; Wittneben and Kiyar, 2009), a climate policy aim at requiring developed countries and companies operating within to reduce CO2 and other greenhouse gases emissions (Lash and Willington, 2007). According to the British Broadcasting Corporation (2009), the Kyoto Protocol climate policy only applied to a small set of countries and in an effort to include the developing countries in order to curtail the growth of the global greenhouse emissions led to the Copenhagen Climate Summit, 2009. The summit held in Denmark attracted delegates from 192 countries and the main objective was to create the global awareness the need to prevent climate change and global warming. The summit also aimed at “promoting constructive dialogue between the government, business and sciences” (Phelamei, 2009). However the summit ended without achieving its objective by stopping the dangerous climate change (Black, 2009). Reynolds (2009) attributed the cause to lack of political commitment of the developing countries spearheaded by the BASIC group (Brazil, South Africa, India and China) to endorse the “Copenhagen Accord”.
Kasperson et al. (2003) argued that one school of thought regarding the inactiveness of the developing countries in green issues despite the fact that they are financially handicapped and always dependent on foreign donors for assistance, engaging in green supply chain will be their greatest challenge because of poor and inadequate infrastructure. And moreover the risks that corrupt governments and multinational enterprises will undermine the endeavours of the pacesetters within those countries. On the other hand, Clarke (2002) claim that achieving green should be seen as a guide-rail for sustainable development because it leads to protection of the environment through reduction in carbon emissions and waste disposal resulting into healthy living that facilitate and promote economic growth. Also engaging in green supply chain in the broader perspective alleviates poverty.
In October 2009, the EU environment ministers at a meeting agreed to bring the airline and shipping industry to be subjected to a global restriction through the post-Kyoto agreement in order for them to have a maximum carbon emission through their operations. But imposing this restriction will cause the ships to dock outside the EU ports to avoid charges. This will in tend elongate the lead time of the supply chain activities and promote road transport hence increasing the carbon emissions Webb (2009).
How we can achieve the green
Patel (2009) suggested that the transition to green supply chain by companies requires seeking for potential suppliers capable of minimizing their environmental impact without reducing the quality of products produced. Therefore cultivating the habit of purchasing products from green supplier businesses will then initiate their green supply chain before any material reaches their site. However the onus lies on a strong focused leadership. Meerendonk (n.d) the Vice President of the European Supply Chain singled out Tesco as one of the numerous European retailers who are requesting green initiatives from their suppliers (cited in Auger, 2009). Benn (2010) suggested the use of labels to inform consumers on choices of products patronise (Anon, 2010).
Canning and Hanmer-Lloyd (2007) argue that companies involved in the supply chain must endeavour to address the environmental impact of the carbon footprint which requires an effective coordination and commitment within the supply chain members.
Future of oil price and availability
Is local better
Yang et al. (2009) pointed out that going green means less transport in supply chain activities. This will encourage and promote consumption of locally manufactured produce which will create local jobs, reducing mileage travel, packaging and waste, sustaining the environment and improving health. However, Snelling (2010) made a counter argument that manufacturing goods and services within a nation's boundary means risking the livelihood of millions of people living in the rural areas of developing countries especially Africa and Asia into extreme poverty (cited in Anon, 2010). In addition Salatin (2009) also argued that localisation in the effort in protecting and preserving the environment can be expensive. Citing example, in the UK local farmers are unable to produce in larger scales and moreover the high expenses involved in complying with the government regulations makes their produce expensive than the imported produce. Proponents of localisation