Table of Contents
Abstract
Environmentalism has been described as the huge power shaping the economy, just as the most significant issue confronting business during the 1990s. An analysis reports the findings of a survey to evaluate the administration of environmental problems and issues in logistics. The investigation mainly focuses upon the serious issues, effects, and techniques identifying with environmentalism as perceived and practiced by US logistics administrators. The major ecological issues identifying with logistics are seen as hazardous waste disposal and solid waste disposal. The 3 most regularly utilized strategies for managing and reacting to ecological issues in logistics are distinguished as reusing materials, reducing materials, and recycling materials.
Introduction
Environmental issues involve matters of public concern which can have a negative impact on the natural or physical environment. Environmentalism has been characterized as the most significant force shaping the economy, as well as the most important issue facing business during even in 1990s.
The growing importance of environmentalism is suggested to have two major impacts on logistics management: 1) a broadening of the scope of logistics, and 2) an influence on the way logistics managers do their jobs. With respect to broadening the scope of logistics, the logistics discipline has generally focused on transportation, warehousing, inventory management, and so on, from the perspective of forward distribution, i.e., producer-to-consumer movement of products. Because of environmentalism, the concept of ‘reverse’ distribution, that is, consumer-to-producer movements, has become more prevalent. In fact, the Council of Logistics Management recently sponsored a research project focusing on ‘reverse logistics’, which is defined as ‘…all issues relating to logistics activities carried out in source reduction, recycling, substitution, reuse of materials, and disposal.’
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And, as pointed out above, environmentalism will have a tremendous influence on the way that logistics managers do their jobs. For example, concerns about solid waste disposal have caused firms to develop more efficient packaging and to recycle packaging materials. In addition, congestion problems in major cities have caused some companies to restructure their distribution systems so that their products are being transported at off-peak (i.e., less congested) times.
A review of the literature shows a good job of delineating, and responding to, the various environmental issues facing the contemporary logistics manager. The literature, however, tends to be primarily anecdotal in nature, that is, presenting descriptions of how one or several companies and governmental organizations have dealt with particular environmental concerns.
While many of these case-like approaches provide valuable information on a variety of environmental issues, such approaches are unable to describe the policies, practices, and strategies of logistics managers in the general business community. Such information is best collected through survey research; yet there have been relatively few empirical studies of a survey nature dealing with environmental issues in logistics.
In an effort to at least partially fill this literature void, this article will discuss the results of an empirical study focusing on environmental issues in logistics. The following research questions will be addressed:
- What is the importance of selected environmental issues relating to logistical operations?
- What impact will environmental issues have on the management of logistical functions during the next five years?
- What strategies are currently being used to manage and respond to environmental issues in logistics? Which of these strategies are viewed as most effective for managing and responding to these environmental concerns?
Methodology
The information in this article is drawn from a mail survey of members of the Council of Logistics Management (CLM). Because the company personnel most knowledgeable about environmental issues in logistics are likely to be in positions of upper and middle management, the study focused on those members with job titles at the director level or above.
Analysis
- What is the importance of selected environmental issues relating to logistical operations?
First and foremost, there are relatively many environmental issues (e.g., population control, genetic diversity, natural resources, pollution) affecting modern society, the literature suggests that logistics managers are best able to influence those involving pollution, congestion, waste disposal, and natural resource consumption.
The two most important environmental issues are hazardous waste disposal and solid waste disposal. Perceived as next in importance were reducing water pollution, reducing air pollution, and energy conservation. One explanation for the importance of hazardous waste disposal is that the U.S. Department of Transportation has mandated that companies must be able to document that their employees have been properly trained in the handling and/or transportation of hazardous materials. Failure to do so could result in fines, civil liability judgments, and higher insurance premiums.
Much of the concern with solid waste disposal comes from packaging materials. Part of the challenge for logisticians in dealing with packaging waste is that requirements for the disposal, reduction, and/or elimination of this waste are often left up to local or state agencies. Nonetheless, growing awareness of the negative consequences of packaging waste ensures that logisticians will have to address this issue, now and in the future.Next, the two least important environmental issues are reducing congestion and efficient land usage
- What impact will environmental issues have on the management of logistical functions during the next five years?
Firstly, environmental issues will have the greatest impact on the logistical functions of salvage and scrap disposal and packaging, followed by transportation and return goods handling. The fact that salvage and scrap disposal, packaging, and return goods handling emerge as three of the most heavily impacted logistical functions lends credence to the notion that environmentalism will continue to affect the way that logisticians do their jobs. For example, return goods handling is associated with the previously discussed concept of reverse logistics. Return goods handling can present challenges to logistics managers because many companies still have inefficiencies in the forward distribution of their products. In addition, return goods handling often increases both the complexity and costs of transporting, storing, and handling products.
Packaging, as well as salvage and scrap disposal, are closely linked through concerns of how to dispose of packaging waste. Certainly, legislation aimed at shifting responsibilities for the disposal of packaging waste, such as Germany’s law that shippers have responsibility for the disposal of transport packaging, would have important ramifications for the logisticians in the U.S.
- What strategies are currently being used to manage and respond to environmental issues in logistics? Which of these strategies are viewed as most effective for responding to these environmental concerns?
Recycling materials, reducing consumption, and reusing materials are the three most common strategies for dealing with environmental issues in logistics.
The findings on recycling and reuse support earlier results, which found salvage and scrap disposal to be the logistical function most impacted by environmental concerns. Quite simply, the recycling and reuse of materials are two possible options for the salvage and scrap disposal function.
The ‘redesign of logistical system components’ strategy again reinforces the idea that environmentalism will have a profound impact on the way logistics managers do their jobs. While some of the redesigning should be fairly predictable (e.g., improving the recyclability and/or biodegradability of packaging), others may be quite unusual. Wal-Mart, for instance, has recently opened a prototype store of the future. ‘Predictable’ aspects of its design include the use of skylights to help reduce energy consumption. A more unique attribute of the store is that the building’s design facilitates its conversion to apartments in the event that Wal-Mart ever closes it.
Conclusions and Implications
This article reports the findings of a survey to assess the management of environmental issues in logistics. More specifically, the study focuses upon the major issues, impacts, and strategies relating to environmentalism as perceived and practiced by U.S. logistics executives. The key findings of the study can be summarized as follows:
Major Issues
The most important environmental issues relating to logistics as hazardous waste disposal and solid waste disposal. Viewed as next in importance were issues relating to reduced water pollution, reduced air pollution, and reduced odor pollution. Perceived as least important were environmental issues relating to reduced congestion and efficient land usage.
Major Impacts
The greatest impact on the logistical functions of salvage and scrap disposal and packaging, followed with somewhat less impact on transportation and return goods handling. In contrast, it appears that the functions of inventory control, order processing, production scheduling, and demand forecasting should be relatively unaffected by environmental issues into the near future.
Major Strategies
Recycling materials, reducing consumption, and reusing materials are the three most commonly used strategies for dealing with and responding to environmental issues in logistics. The least used strategy, by far, related to encouraging greater governmental involvement or regulation.
In terms of planned usage, the strategies most likely to be added in the near future were redesign of logistics system components, and increased education and training. Other strategies likely to be added included rejecting suppliers who lack environmental concerns, hiring and promoting environmentally conscious personnel, and promoting industry cooperative efforts.
Otherwise, the results were largely as expected. The major issues and impacts identified in the study generally were consistent with those mentioned and speculated upon in the logistics literature. Likewise, the most effective and widely used strategies for responding to environmental issues are similar to those most commonly reported in case studies and anecdotal reports.
In general, the most popular strategies are neither surprising nor revolutionary, but rather tend to be well known and practical. For these strategies to be effective, however, a number of guiding principles from the environmental literature can be offered: 1) the need for top management support and involvement, making environmental considerations and concerns part of any decision, and taking a proactive rather than a reactive stance in formulating and implementing environmental policy and strategy.
It is hoped that this study will serve as a stimulus for further research regarding the management of environmental issues in logistics. Certainly more empirical research is needed to supplement the plethora of anecdotal evidence. For example, comparative studies of strategic responses to environmental issues by logistics practitioners in other nations, as well as with managers in other functional areas, would appear to offer promise. Similarly, more research is needed to identify the costs and optimal procedures for operationalizing strategy alternatives.
Conclusion
In conclusion, environmentalism has been characterized as one of the most significant issues facing contemporary logistics managers. Likewise, the need to respond to environmental concerns is expected to increase in the future. Fully 80 percent of respondents in this study indicated that they expected the importance of environmental issues to increase over the next five years. Accordingly, the study results confirm the notion that environmentalism is no longer a peripheral concern or fad, but rather an issue that will remain at the forefront of the logistics discipline for the remainder of the 1990s and beyond.
