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Green Logistics Importance

Introduction

The importance of green logistics as a new scientific direction in supply chain technologies has recently acquired significant interest among academic researchers. The core aspects covered by the aforementioned inquiry include the use of cost- and resource-saving technologies that are equally important to supply chain optimization and environmental security. Furthermore, researchers explore whether the opportunity to deploy green logistics principles could be consolidated with supplier activities to ensure that all of them meet environmental standards. However, the investigation efforts remain unsolved because of emerging issues with government restrictions, supplier opinions, and unpredicted reactions of end customers. Based on the above, recent literature has been analyzed in terms of relevant findings and recommendations pertinent to the role of green logistics in supply chains. Specifically, the focus was made on the aspects of cross-organizational management, such as work with suppliers, customization, governmental procedures in developed or developing countries, and technical approaches required to manage the problem.

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Literature Review

The importance of green logistics and sustainability reporting has been recently explored by Karaman and his colleagues. Specifically, the authors used a signaling theory as a framework to investigate whether the green logistics performance is positively associated with sustainability reporting and corporate social responsibility (CSR) principles. The analysis was based on 117 countries through the period between 2007 and 2016. Overall, Karaman et al. (2020) suggested that there is any evidence of green logistics to be positively associated with the number of sustainability reports in a chosen sector. Validation was performed using the following tools and techniques. First, the authors implemented a survey that was based on six logistics performance indicators and a cumulative variable known as a logistics performance index (LPI). Second, the moderation analysis was performed to specify that deployment of green logistics is negatively affected by weak or uncertain activities of the organizational board of directors, as well as insufficient corporate governance. Based on the above, the study findings appear to be relevant to the developing countries that were reported as ‘low-scorers’ in terms of LPI methodology.

Another scientific inquiry devoted to green logistics practices was made by Jazairy (2020), who explored how logistics buyers and service providers percept green sustainability concerns under the condition of diverse contractual settings. Stemming from the principles of contract negotiations, Jazairy (2020) specified that cross-organizational alignment on ‘going green’ in terms of sustainable contracts emerges through the phases of requesting a proposal, formal negotiations, contract approval, and execution. Additionally, Jazairy (2020) found that “green demands may hinder green logistics applications due to impediments to LSPs’ asset-sharing strategies” (p. 1), which were found as contradictory to organizational principles of building a supply chain with trusted suppliers. Furthermore, the author concluded that there is a risk of a deadlock during the negotiation phase, where additional requirements for establishing green practices are rejected by either supplier or hosting organization. Finally, the researcher reflects on the problem of the interest mismatch during the contractual period, when service outsourcing that conforms to CSR practices is a lesser concern for shippers. Overall, it suggests that green practices could be obscured by the contractual obligations and relationships with suppliers since organizational practices are not aligned and require further harmonization.

Current research on green logistics also considers the importance of seeing one as a contributive factor to economic development. Seroka-Stolka and Ociepa-Kubicka (2019) suggested that green logistics has a significant impact on the circular economy, which relates to the “realization of a closed loop of material flows in the economic system” (p. 1). To be precise, the authors specified the need for creating values while keeping in mind the importance of minimizing the use of natural resources and related practices that allow creating a holistic system that benefits end customers. Furthermore, Seroka-Stolka and Ociepa-Kubicka (2019) proposed several concepts, such as cradle to cradle (C2C), cleaner manufacturing, industrial ecology, and customized practices of reducing, reusing, recycling, and repairing raw materials. These concepts were defined as essential to sustainable development in the circular economy, where the flow of materials, products, and services is frequent and requires regular control. Partially, it relates to the previous findings on the asset-shaping strategies mentioned by Jazairy (2020), since circular economies require more robust control over the implementation of green practices. However, the aforementioned findings require further validation for the developed world, given that the western type of building green supply chains is more advanced.

Practical implementation of green logistics requires a more thorough investigation in terms of industrial activities performed by the chosen organization. Twrdy and Zanne (2020) reflected on this concept through the example of ports as a critical link in the logistic supply chain and the overall importance to international business development. The focus was made on the European economy that handles more than 30% of the seaborne trade worldwide, additionally considering that littoral areas are actively visited by tourists during the summertime (Twrdy & Zanne, 2020). Practically, it means that ports are required to have clear and transparent strategies in their efforts to provide service comfort for arriving passengers. Alternatively, Twrdy and Zanne (2020) articulate that it is important to manage environmental restrictions applied to the coastal area, where board shipping and commercial deliveries are managed. Therefore, green logistics in this case assumes separating commercial activities from transportation activities, suggesting a potential negative footprint of having the same structure of boarding tourists and loading ships.

To address the aforementioned concerns, Zabrakhshnia et al. (2019) suggested considering both forward and reverse green logistics models that will satisfy business needs. Specifically, it was found that the epsilon-constraint method is sufficient to solve the model based on the initial inputs collected from the raw data. The mixed linear programming approach was used to minimize the cost of project operations, associated costs, and expenses, as well as transportation costs to ensure that the ‘green network’ is stable and sufficient. The home appliance industry has been chosen as a point of verification to ensure that the epsilon-constraint method is valid, while also considering the principles of Pareto and sensitivity analysis. To summarize, the method appeared to be effective for the chosen industry, while the scope of its application is yet to be validated for the other industries that seek for implementation of green logistics.

While the findings from the literature are not consistent, several common patterns allow distinguishing current green supply chain practices on an organizational level. Specifically, it was admitted that the promotion of green logistics principles should be based on rules and practices consolidated in a congruent framework rather than a case-specific application (Jazairy, 2020; Twrdy & Zanne 2020). Additionally, researchers emphasized the importance of managing suppliers to achieve green sustainability recognition by the customers, since the focus on green logistics rules internally does not guarantee that the whole supply chain follows them (Seroka-Stolka & Ociepa-Kubicka, 2019). Furthermore, it was admitted that computerized methods for the evaluation of green logistics effectiveness should be used to ensure the trustworthiness of the proposed models of interaction with customers and suppliers (Zabrakshnia et al., 2019). Finally, the important finding relates to the need of having formal negotiations and making critical decisions before establishing green practices that affect the whole supply chain, as well as consolidating technical skills required to address the problem of consistent supplier management (Jazairy, 2020). Overall, it means that green logistics is a complex, multimodal concept that requires further exploration and application tailored to uncertainty in organizations.

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Conclusion

Several perspectives on the green logistics principles were explored as a part of scientific research inquiry. First, it was found that green logistics should be considered as a mediating factor towards sustainability reporting, where the importance of data analysis related to environmental contribution is critical. Second, it was identified that managing suppliers are essential to ensure collaborative practices in supply chain development, where the roles and responsibilities are negotiated. Third, it was empirically confirmed that green logistics practices contribute towards economic development, while this statement remains controversial in terms of the developed or developing world. Fourth, it was found that green logistics principles are important in customer management, whereas it is important to consider both tourism and commercial operations to meet sustainability principles. Finally, literature analysis suggests that organizations should follow both forward and reverse logistics principles to ensure that green supply chains are efficiently controlled by the government and authorized companies.

References

Jazairy, A. (2020). Aligning the purchase of green logistics practices between shippers and logistics service providers. Transportation Research Part D: Transport and Environment, 82, e102305. Web.

Karaman, A.S., Kilic, M., Y Uyar, A. (2020). Green logistics performance and sustainability reporting practices of the logistics sector: The moderating effect of corporate governance. Journal of Cleaner Production, 258, e120718. Web.

Seroka-Stolka, O., & Ocieka-Kubicka, A. (2019). Green logistics and circular economy. Transportation Research Procedia, 39, 471-479. Web.

Twrdy. E., & Zanne, M. (2020). Improvement of the sustainability of ports logistics by the development of innovative green infrastructure solutions. Transportation Research Procedia, 45, 539-546. Web.

Zabrakhshnia, N., Soleimani, H., Goh, M., & Razavi, S.S. (2019). A novel multi-objective model for green forward and reverse logistics network design. Journal of Cleaner Production, 208, 1304-1316.

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