Objective Strategy
Shipping less Demand responsive systems. Reduce returns.
Changing suppliers Reassessing sourcing both at the global and domestic levels.
Shipping scheduling Allow greater shipping time and outside rush periods.
Efficient packaging Reduce the shipment size (volume) of the same load.
Modal shift Use a mode or a route that is more energy and environmentally efficient.
Logistical Strategies to Cope with Energy and Environmental Constraints
While costs have always been an important driver of supply chain management strategies, the rising cost of energy has been a strong incentive to rationalize supply chains and indirectly improve green supply chain management. Depending on the objective, there are several strategies that are being adopted to mitigate energy and environmental constraints:
  • Shipping less. The setting of demand responsive systems where supply chains are tightly integrated so that the goods being delivered are the outcome of an expressed demand. A better level of order fulfillment tends to reduce returns.
  • Changing suppliers. Reassessing sourcing both at the global and domestic levels. This is best done if a comprehensive array of logistics costs is considered, particularly in light of energy and environmental constraints. While a supplier may appear to offer the lowest cost, if factors such as higher transport costs, more inventory in transit, longer response times and a higher level of unreliability are considered, alternative, but closer, suppliers could be more advantageous.
  • Shipping scheduling. Adapt the scheduling of flows to insure a greater level of utilization of existing transportation and warehousing assets. By allowing greater shipping time and outside rush periods the same assets can be used more rationally, which conveys energy and environmental benefits.
  • Efficient packaging. Reduce the shipment volume of the same load by using less packaging or by changing how a good is packaged. This results in higher transport densities. For instance, the introduction of the second generation of iPads in 2011, a popular tablet computer, involved a reduction in its packaging dimensions with a box that is 10% lighter (mostly from lighter product design) and has 18% less volume (mostly from better packaging). This is an important consideration for air shipping since the final assembly of the product takes place in Shenzhen, China.
  • Modal shift. Use a mode or a route that is more energy and environmentally efficient, which can involve a change in the routing of cargo. Rail is the logical alternative to trucking over longer distances, but short sea shipping can be suitable for coastal regions.