E-Logistics and the Natural Environment

1. E-Logistics and the Natural Environment Joseph Sarkis Clark University

2. Outline of Talk • Introduction on why this topic is of interest • Background on Logistics and E-Logistics • Forward E-Logistics and the Natural Environment • Reverse E-Logistics and the Natural Environment • Industry, Gov’t, Academic Issues

3. Introduction • Billions will be spent on Internet Based Logistics Systems. • B2C market $7.7 $28 Billion (98-00) • B2B market $2.1 $81 Billion (01-05) • If growth is to be maintained (as we now know) efficient logistics systems have to be in place. • Investments in e-logistics will also be great, question is: What are the environmental implications?

4. Reusable, Remanufacturable, Recyclable Materials and Components Reverse Logistics Energy Energy Energy Closed-Loop Manufacturing, Demanufacturing, Source Reduction Disposal Location Analysis, Inventory Management, Warehousing Transportation Packaging Internal Transportation, Materials Movement External Transportation Raw and Virgin Material Inventory Management Selection Fabrication Vendors Storage New Components and Parts Storage Distribution, Forward Logistics USE Assembly Recycled, Reused Material and Parts Purchasing, Materials Management, Inbound Logistics Outbound Logistics Production Energy Product/Process Design Waste Waste Waste Engineering Marketing Waste Figure 1: Materials, Product and Information Flow. Forward and Reverse Logistics, Adapted From Sarkis, 2001.

5. Background • E-Logistics Technology (examples) The personal computer Electronic data interchange (EDI) among carriers, shippers and customers Barcoding and scanning Advance ship notices (ASNs) Shipment and package tracking systems Satellite global positioning systems (GPS) and geographic information systems (GIS) The World Wide Web The Internet, intranets and extranets Web-enabled relational databases, data warehouses and data marts Decision support systems Electronic signature technology Wireless technology Enterprise resource planning systems

6. Forward E-Logistics and the Natural Environment • Procurement • Email, EDI and XML linkages aiding procurement • Savings: Ideally reduce all paper driven transactions (.25% drop in net greenhouse gas production (Romm, 2000). • Costs: (general issue with all technology) • energy costs because of technology (Mills 2000, 2001). • Electronic Hardware - a growing waste stream, millions of computers, CRTs, etc. into landfills.

7. Forward E-Logistics and the Natural Environment • Procurement • Additional Benefits – Green Purchasing is easier. • European Partners for the Environment has the European Green Purchasing Network - www.epe.be. • An example site that has a database of green purchasing depending on product type, material, other criteria, for green purchasing www.econexus.net • A meta-site that gives a number of sites for green purchasing, especially in North America is located at www.nerc.gpn/gpn • The Japanese Green Purchasing Network is located at: www.wnn.or.jp/wnn-eco/gpne

8. Forward E-Logistics and the Natural Environment • Inventory and Warehousing • Postponement – less inventory due to quick speed of information (JIT) • Aggregation and centralization of warehousing/inventory do not need to be next to customer • + less waste, energy to run additional locations • - additional transportation costs • Information integration – substitution of durable goods with information – better efficiency – less bullwhip effect.

9. Forward E-Logistics and the Natural Environment • Transportation and Delivery Management • Transportation exchanges allow for more efficient carrier management • Transportation costs may increase due to centralized warehousing • Services and electronic (software/music) goods are easily delivered. • Packaging and Order Management • Marketing with fancy packaging less necessary • Have more flexibility in packaging

10. Reverse E-Logistics and the Natural Environment • By definition is an environmentally conscious practice, bringing back disposed products, components, waste into system. • Returns due to warranties, customer service, competitiveness issues are all increasing reverse logistics. • Major RL activities: gatekeeping, collection, sortation and disposition

11. Reverse E-Logistics and the Natural Environment • Challenges of E-logistics • E-commerce has higher return rates. • Culture of focus on sales not returns service • Volumes of returns are unknown • Lack of retailing experience • Variety of sources of returns – manufacturers deliver directly • Some responses • Return Stores subcontracted • Third-party Reverse Logistics providers (but need to rethink business in internet situation, e.g. smaller orders, pickups).

12. Reverse E-Logistics and the Natural Environment • Environmental Issues • Extending the life of the product - Secondary market development. • C2C – Ebay • Materials Exchanges – quick and easy information • Brokering Firms – inventory excess – find a buyer • Excess Inventory – Obsolete equipment markets direct from Manufacturer • Transportation issues, energy usage, LCA issues

14. Industry, Gov’t, Academic Issues • Industry • Adoption • Technology development • Investment and integration • Adoption and Development of Processes

15. Industry, Gov’t, Academic Issues • Government • Awareness Development • Standards setting • Regulatory oversight • Intergovernmental relationships • Infrastructural support and development

16. Industry, Gov’t, Academic Issues • Academia • Basic Research and Development • Implications of Technology on the Environment • Determining what works and what doesn’t • Educating and Publicizing • Case Studies • Course Integration • Project Development • Speakers • Field tours • Sharing of ideas – Simulations - Games