Customers prefer to shop from such retail brands and companies that would have a lower impact on the environment; it raises the concept of green logistics management. According to a research report by IBM, approximately 57% of the customers would change their e-commerce buying habits and patterns to reduce the environmental impact. It requires companies to change their supply chain and logistics systems to meet customer demands. Today, we’ll discuss green logistics management; its definition; strategies, advantages, and disadvantages.
What is Green Logistics Management?
Green logistics management is the method of decreasing the environmental impact through delivery and logistical processes. The consumer market has become environmentally conscious and its focus is on the following;
- Selecting the green and environmentally sustainable companies
- Transporters and shippers should reduce the Co2 emission rate
- Managing waste disposal and overall waste management
- Employing recyclable material
- Low energy consumption
- Biodegradable Packaging
- The low carbon footprint of the supply chain
Various global and national companies are implementing sustainable practices; customers are consuming green products, and other companies are planning to achieve net-zero carbon impact. However, the process of going green is to implement sustainable practices in various stages of logistical operations by adopting digital technology. Digitalization helps you in the following ways;
- Finishing the paper trail
- Low energy consumption
- Finding and employing alternative sources of energy
- High efficiency
Strategies for Green LM
Some of the main strategies and practices for green logistics management are as follows;
The paperless logistical industry is a great idea. The focus of businesses and companies is to reduce environmental impact and achieve efficiency; they have been employing digital operations and processes. They should expand digitalization towards freight and logistical operations.
The proof of product delivery used to be the paper document that the customers should sign into it after receiving the package. Logistical processes have reached the level of contactless and paperless delivery with photo proof and electronic signatures.
Tracking & Notification
The example of a customer-focused industry standard with real-time tracking and notifications offers them many benefits. Automation of the shipping update process helps you to decrease the customer support cost. You should share the ETA (estimated time of travel) and live tracking link with your customers; it amplifies the rate of successful delivery by ensuring the customer would be at home to receive the delivery.
Advance route planning for multiple deliveries is not the only factor that would help you to employ transportation resources efficiently and decrease wastage. Logistical and freight operations employ fuel and fleet management to decrease fuel costs.
However, fleet management comprises load checking; fleet optimization relies on fuel capacity and safety standards, and proactive vehicle maintenance to ensure safety for customers and drivers.
Scheduled deliveries are a great example of how on-time planning would help you to decrease greenhouse gas emissions in the logistical industry. If you are planning shipment in advance, then it would help you to develop an efficient route by integrating pickup and drop-off points. However, scheduled deliveries play a significant role in the efficient usage of transport and how it helps you to manage your operational impact.
Advantages of Green LM
Some of the main benefits and advantages of green logistics management are as follows;
The hiring and recruitment process becomes easier in the tough job competitive market. Green logistical companies could easily attract young professionals because they would prefer to work for such companies that have strong core values.
Reputation of Responsible Company
Big corporations have to answer the question about their contribution to global warming, and it is a social justice problem. Green LM helps companies to win the perception of the public, and it benefits them in the long term. Companies that are still relying on fossil fuels are losing their competitive edge.
In order to win the trust and loyalty of customers, you need to satisfy their demands, flexible schedule, and easy return policy. Modern customers want to know where the product came from, sustainable sourcing, and green transportation methods. Transparent companies about their supply chain and production processes earn the loyalty of customers.
When companies follow sustainable supply chain and logistical processes, they would attract eco-friendly customers and partners. A study by HBR (Harvard Business Review) showed that large global multinational companies are employing the United Nations Global Compact to analyze the sustainability of suppliers and their impact on the environment.
Long Term Profitability
Green logistical processes and operations want you to be open about investment, benefits, and cost. It makes you decrease waste, cost, and carbon emission rate. Studies have shown that sustainable companies are performing better in terms of profitability than their competitors.
Disadvantages of Green LM
Some of the main disadvantages of green logistics management are as follows;
- Transportation and logistical processes are heavily reliant on fossil fuels, and it is not economically viable in some cases
- Various delivery service providers are making great volume of deliveries in the big cities, and often they aren’t carrying the full load because of the mixed orders.
- Companies have a limited warehousing infrastructure closer to the customers, and they need to depend on traditional logistical activities
- Many businesses have fixed rate and limited profit margins and it is not easy for them to invest in automation technology or infrastructure
Conclusion: Green Logistics Management
After an in-depth study of green logistics management; we have realized that green logistical processes are highly significant for sustainable business operations. If you are learning about the green logistical processes, then you should keep in mind the abovementioned strategies, elements, advantages, and disadvantages.
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