L’Oreal discovered that minimizing air transport will have a massive impact on the greenhouse gas effect (GHG) that occurs by and large as a direct result of man-made transport emissions. Policy has thus been launched for transport operators to immediately curb air transport pollution by switching to more sustainable modes of transport by land and water, particularly where alternative or clean-cleaner enery is available and feasible, as much as possible.
L’Oreal manages one of the most complex supply chains in the world. Having more than 50,000 SKUs, an identification bar code for inventory logistics purposes, five years ago and more than 70,000 SKUs worldwide today represents a huge challenge to overcome with respect to meeting annual GHG reduction targets in the buildup to the 2020 goal of overall 60% GHG emission reduction from the 2005 yardstick.
One way to reduce GHG emission is through energy efficiency, or simply using the minimal amount of energy required to output maximal products and services by means of optimized engines that burns energy more completely and emits minimal pollution as a result. Energy efficiency can be implemented in distribution centers, office buildings, and etc. The most desirable way by far, nonetheless, is through GHG emission reduction through L’Oreal’s transport network, as a mere 20% reduction in GHG equates to a mind blowing 358,000 tonnes of CO2 taken out of the asmosphere.
L’Oreal ‘s logistics study found that, although only 1% of company cargo is transported by air, that 1% air freight amounts to 30% of the company’s overall transportation GHG footprint.
Credit: L’Oreal at APICS 2018
Scientific research clearly substantiates the fact that air transport emits 25 times more GHG than by-rail transport and a staggering 170 times more than by-water shipment. Along similar lines from a different logistics point of view, small trucks and vans are responsible as the number-one pollutor in congested urban areas and comes in second right behind by-air transport for overall GHG pollution on the global warming scale, i.e., results limited to transportation for logistics purposes, only.
L’Oreal’s corporate supply chain standards and prospective director, François-Régis Le Tourneau, explains that it depends on attention to detail to make big dents in carbon emissions. Those that objectively and qualitatively analyze all transportation related factors and pay as much attention to detail as possible will find constructive areas of improvement.
Leading by example, L’Oreal has redefined and refined its transportation-related supply chain processes to focus on by-rail and by-water shipping as much as possible. The two modes of transportation of course takes more time and requires accurate forecasts of customer needs in order to deliver on time without incuring opportunity costs or unnecessary loss or damaged cargo that increases with transportation duration. The switch of mode of transportation of choice alone, nonetheless, can not achieve this corporate goal. The most important component of footprint footlightedness must also include the use of renewable energy in various aspects of both by-land and by-water supply chain, as well.
The big game changer for success in today’s business requires a ecological-economical co-evolutionary approach to focus on the environment as much as economics in order to survive in the Lean-Green age of IoT with every changing market sentiment. It has to be good for the world we live in to be good for business: Green = Lean = Business Sustainability.
Compiled by BLOG.SCGLogistics
References and photos supplychaindive.com, pixabay.com