Green Supply Chain Management, Marketing Tool or ... - Nhtv

Green Supply Chain Management,
Marketing Tool or Revolution?
Françoise van den Broek
Published on the occasion of the inaugural speech
related to the lectureship Logistics & Sustainability

Green Supply Chain Management,
Marketing Tool or Revolution?
Françoise van den Broek
Published on the occasion of the inaugural speech
related to the lectureship Logistics & Sustainability
F.N. van den Broek-Serlé, MSc, CEMS MIM, MTL
Breda | Zoetermeer, the Netherlands, January 2010
This report has been financed by NEA Transport research and training Ltd.
and NHTV Breda University of Applied Sciences, Academy for Urban
Development, Logistics & Mobility
Quoting of figures and/or text is permitted only when the source
is clearly mentioned.

Contents
3
5
11
23
31
33
36
1 | Introduction
2 | The evolution of supply chain management and trends
influencing future concepts
2.1 Introduction
2.2 The ‘dark side’ of globalisation
2.3 Cost, service level and sustainability
2.4 Sustainability changes shape over time
2.5 Sustainability will become one of the prime drivers of the supply chain agenda
2.6 Green issues increasingly important but not yet core part of corporate strategy
3 | Why consider going ‘green’?
3.1 Introduction
3.2 Regulations
3.2.1 Dutch government
3.2.2 European Union
3.2.3 China’s regulations push market developments
3.2.4 Abu Dhabi and Dubai are taking the energy lead
3.3 Implementing green efforts at an early stage
3.4 Hurdles in the process of going green
3.5 Level of awareness is rising
3.6 Revenue opportunities: new product development and green marketing
or should we call it ‘green washing’?
3.7 Does ‘going green’ generate turnover?
3.8 Rewards of going green are both tangible and intangible
3.9 Five stages towards sustainability
4 | How companies deal with sustainability within the supply chain
4.1 Introduction
4.2 Isolated approaches still dominate
4.3 ‘Greening’ gains importance in all sectors
4.4 Dutch companies accepting the green challenge
4.4.1 Manufacturers
4.4.2 Transport and logistics
5 | Impact of sustainability on the logistics programs at the
NHTV Academy for Urban Development, Logistics & Mobility
5.1 Introduction
5.2 How will the lectureship contribute to the logistics programs
of NHTV Academy for Urban Development, Logistics & Mobility?
6 | Conclusions
References

1 |
Introduction
Whatever magazine you open nowadays, you cannot miss the articles on sustainability,
be it editorials in popular magazines or professional journals.
Today’s economic, social and regulatory dynamics are putting real pressures on
companies to be both lean and green in their product sourcing, logistics, distribution
and operational practices.
If you think your business is too small or too service-based to benefit from going
green, or you’re waiting for the hype about green and sustainability to die down,
then you’re missing an opportunity to chart an upward course for your company.
The green movement has been transformed from a cause to save our environment
into a fully-fledged, vetted economy.
Environmental responsibility has moved from a trend to a business imperative,
it helps companies to achieve their business goals. Over the past few years sustainability
has steadily been moving from the periphery to the heart of business.
Companies are adopting sustainability practices for a host of reasons depending
on the industries and geographies in which they operate.
Three dimensions of sustainability
Environmental
sustainability
Eco-system integrity
Carrying capacity
Biodiversity
Social
sustainability
Cultural identity
Empowerment
Accessibility
Stability
Equity
HUMAN WELL BEING
Source: IUCN 2006
Economic
sustainability
Crowth
Development
Productivity
Trickle-down
3

But what exactly is sustainability? How does it effect the business and supply
chain design? Can a company aim to achieve competitive advantages through the
implementation of sustainable business practice and if yes, how? Why should you
be part of it too? Just a few questions popping up, that are challenging to address on
behalf of the lectureship Logistics & Sustainability at NHTV, Breda University of
Applied Sciences, Academy for Urban Transport, Logistics and Mobility financed by
NEA Transport research and training Ltd. in the Netherlands.
For many people, sustainability is about reducing carbon footprint, complemented
by minimizing waste and conserving water through innovation, communication and
best practices. The term, as it relates to business, means: conducting business to
meet human needs without rapidly depleting resources, degrading the environment,
or compromising nature conservation efforts. In this publication the terms
‘sustainable’ and ‘green’ will be used interchangeably.
Definition of Green Supply Chain Management (GrSCM)
Integrating environmental thinking into supply chain management, including product
design, material sourcing and selection, manufacturing processes, delivery of the
final product to the consumers, and end-of-life management of the product after its
useful life.
Source: Srivastava, 2007
GrSCM improves operations by employing an environmental solution:
> improves agility – GrSCM helps to mitigate risk and speeds up innovations;
> increases adaptability – green supply chain analysis often leads to innovative
processes and continuous improvements;
> promotes alignment – GrSCM involves negotiating policies with suppliers and
customers, which results in better alignment of business processes and principles.
Core focus of the lectureship will be on the necessity of ‘green’ and on green
operations (network design and reverse logistics, transportation, green manufacturing
and re-manufacturing and waste management).
The purpose of this publication is to answer the question “How can sustainability
be integrated in the supply chain and throughout the company as it will entail new
strategies and a transformation of organisational structure, culture and behaviour
(not to say a green revolution) to thrive, not just survive, in a complex and fastchanging
landscape?”. The next chapter will elaborate on the evolution of supply
chain management and trends influencing future concepts. Chapter three will answer
the question why ‘going green’ is important. The fourth chapter will elaborate on
how companies deal with sustainability within the supply chain. Chapter five will
show the impact the lectureship will have on the logistics programs of NHTV‘s
Academy for Urban Development, Logistics & Mobility and chapter six will draw
some major conclusions.
4

2 |
The evolution of supply chain
management and trends
influencing future concepts
2.1 Introduction
Rapid changes in the business environment, including increased internationalisation
and global competition, but also social and environmental trends, such as climate
change, population growth and aging, wealth accumulation and distribution,
nutrition, health and education, affect companies’ supply chains in various ways,
resulting in new and evolving requirements on supply chain design.
Prominent features of leading green supply chains include an emphasis on life cycle
costing, asset efficiency, and waste reduction and service innovation and recycling.
Executed effectively, GrSCM stimulates product and service innovation, improves
asset utilization, and deepens customer relationships and service levels through a
shared focus on reducing waste and cost.
Some examples to show the impact on supply chains 1 :
> Wal-Mart, which in 2005 launched a sweeping business sustainability strategy,
recently set the goal of a 5% reduction in packaging by 2013. The retail giant expects
the cut in packaging will save 667,000 metric tons of carbon dioxide from entering
the atmosphere. Moreover, the company anticipates $3.4 billion in direct savings and
roughly $11 billion in savings across the supply chain;
> Nestlé employs an ongoing, company-wide sustainability program that has
generated significant environmental and financial benefits. The company has applied
the strategy to its use of product packaging by initiating an integrated approach that
favours source reduction, re-use, recycling, and energy recovery. In particular, the
company’s packaging material savings between 1991 and 2006 led to $510 million in
savings, worldwide, according to Nestlé’s corporate website;
> Heineken committed to reduce fuel and electricity use through its “Aware of
Energy” program. The company said in its 2006 sustainability report that it aimed to
reduce fuel and electricity costs by 15% between 2002 and 2010. At the time of the
Diamond report, Heineken had achieved savings of 6%—even after the acquisition of
new breweries.
2.2 The ‘dark side’ of globalisation
Due to globalisation, supply chains have grown more lengthy and complex.
It has become harder for companies to maintain the same oversight and control that
they traditionally had. A side effect of globalisation has been for some companies
that operations were shifted to locations with weaker environmental protection.
In some cases, this has resulted in costly product recalls of contaminated goods,
damage to workers’ health and pollution of public drinking water. Companies need
1
Diamond Management & Technology Consultants, Insight “The case for a ‘green’ supply chain: Turning mandate into opportunity”, 2008
5

to be aware of this, partly because of the risk of damaging their reputation, but also
because local standards are likely to rise sharply in the coming years.
2.3 Cost, service level and sustainability
Traditional supply chain strategies balance cost efficiency and service level (on-shelf
availability). Consumers, rising energy and other commodity costs and legislation
have pushed companies to re-design their supply chain networks in order to mitigate
negative environmental impacts. Sustainability is a third lever that addresses cost,
service levels and environmental and social impact.
Economy
Growth
Efficiency
Employment
Competitiveness
Choice
Sustainable
Supply
Chain
Society
Safety
Health
Access
Equity
Source: www.greenlogistics.org
Environment
Climate change
Air quality
Noise
Land use
Biodiversity
Waste
New factors are becoming increasingly critical, such as availability of natural
resources, traffic congestion in urban areas, energy consumption, CO2 emissions and
the permanent rise of transport costs. Companies must develop new relationships
with their suppliers to influence them effectively. Suppliers can gain first-mover
advantage in some cases by making the shift to more sustainable production and
influencing their customers.
Some companies, such as The Body Shop are founded on sustainable principles, and
sustainability is already built into major functions, including the supply chain. Other
companies are innovating products and services, such as low-temperature washing
powders, higher concentrations and thus smaller packaging materials, that utilize
their current infrastructure and require minimal additional investment. Also logistics
service providers are moving green, in order to gain competitive advantages.
6

2.4 Sustainability changes shape over time
The concept of sustainability is not new, but has changed shape over the past
forty years. According to the International Institute for Sustainable Development,
the term first originated in 1962 with “the gradual merging of the environmental
movement and the post-World War II international development community 2 .”
Unlike the environmental movement a generation ago, sustainability today carries a
strong connotation of win-win benefits, efficiency, high performance, long-term
thinking and ‘getting it’. Despite the current recession, leading corporations across
all industry sectors will increasingly make supply chain sustainability an integral
element of their strategy, from product development to manufacturing and the
supply chain to marketing and communications.
2.5 Sustainability will become one of the prime drivers
of the supply chain agenda
Several trends will influence the design of the future supply chain:
External forces:
> economic trends, like new markets (emerging countries Brazil, Russia, India,
China and Africa) and changes in the balance between global and local sourcing;
> ecological trends: sustainability and scarcity of natural resources 3 ;
> demographic trends: urbanisation, greying and labour scarcity;
> new technologies and information management;
> regulatory trends.
Industry trends:
> consumer behaviour;
> supply chain redesign;
> need for transparency of information flows.
The following supply chain solution areas have been defined in Capgemini’s
“The future supply chain 2016” in order to deal with existing trends and those
anticipated for the coming decade:
> in-store logistics: includes in-store visibility, shelf-ready products,
shopper interaction;
> collaborative physical logistics: shared transport, shared warehouse,
shared infrastructure;
> reverse logistics: product recycling, packaging recycling, returnable assets;
> demand fluctuation management: joint planning, execution and monitoring;
> identification and labelling;
> efficient assets: alternative forms of energy, efficient/aerodynamic vehicles,
switching modes, green buildings;
> Joint Scorecard and Business Plan.
For these reasons environmental compatibility, increased flexibility and robustness
are emerging as important targets of today’s and tomorrow’s supply chains.
For instance, the growing population of young people in many developing nations
2
Accenture, “Sustainability and its impact on the corporate agenda”, 2009
3
NEA Transport research and training, “New energy for the traffic and transport sector?”, 2010
7

presents new labour and consumer markets; conversely, the shrinking population of
young people in many developed nations is causing some markets to dwindle.
These demand adapted supply chain models and additional key performance
indicators (KPIs).
Current Supply Chain KPIs Sustainability KPIs
Availability to consumer CO2 emissions
(out-of-stock)
Cost reduction
Traffic congestion
Financial KPIs:
> Return on Investment (ROI)
> Inventory turns Energy and other natural resources consumption
Traceability
Reusable packaging
Fill rate
Co-modal transport
2.6 Green issues increasingly important but not yet core part
of corporate strategy
According to an Eyefortransport survey published in November 2007, green issues
have already started to play an important role in companies’ overall business
strategy. 67% of executives questioned in Europe believed that green issues are
important to their company’s strategy, a significant proportion of executives in the
United States, 59%, and Asia, 57%, viewed green as an integral part of their
long-term strategy.
The outcomes of the “2008 Third-party logistics survey” regarding (1) ROI (Return on
Investment), (2) green as a factor in selecting 3PLs (third-party Logistics service
Providers), and (3) changing transportation modes, reveal mixed opinions:
Around one-half benefits from green initiatives while the other half are either unsure
or even pessimistic. Clearly, there is widespread uncertainty about how to move
forward with green supply chain initiatives. Doing nothing is not an option.
Green initiatives should clear three hurdles: they must be acceptable financially,
environmentally, and socially 4 .
Despite its growing prominence, sustainability is not yet a widespread core part of
most companies’ strategies today. And it is not a prime driver of the supply chain
agendas, as will be shown in more detail in the next chapter. According to GTM
Research, sustainability lies in the middle of the pack of supply chain priorities today,
behind cost cutting. Also within the Netherlands, the focus is strongly on reducing
the carbon footprint and not self-evident in an integral approach on greening the
total supply chain. In a way, this is understandable as a starting point, as it is
estimated that today up to 75% of a company’s carbon footprint results from
transportation and logistics 5 .
4
Capgemini, Georgia Institute of Technology, Oracle and DHL, “13th Third Party Logistics Study”, 2008
5
Eyefortransport, 2007
8

Prof. Dr. ir. A.J.M. Vermunt revealed in his thesis named “Wegen naar logistieke
dienstverlening” a relationship between factors evolving over time, based on
research earlier executed by Ted Kumpe. At first, companies could distinguish
themselves by being efficient, through demanding a competitive price. As more
companies started to become efficient, quality also became more important, leading
to the fact that also reliability became an important aspect. The next point became
customer service in order to stand out on competition, not only price, but also
reliability and responsiveness to customer’s demands are leading. The means a
company has in order to distinguish itself from the competition evolve over time.
It is assumed that in the near future, when sustainability becomes more and more
important, environmental thinking and acting upon it, will be the most important
aspects to be market leader. To an increasing degree, consumers are willing to wait
longer and even pay more for a more sustainable product or service.
Environmental
thinking
Innovation
Innovation
**Responsiveness Responsiveness Responsiveness
*Reliability Reliability Reliability Reliability
Aspect Price Price Price Price Price
Factor Efficiency Quality Customer service Creativity Sustainability
* Reliability: time, place, quantity, quality
** Responsiveness: lead time, flexibility and contact frequency
9

3 | Why consider going ‘green’?
3.1 Introduction
Consumers say they increasingly prefer to purchase products that are free of toxins,
produced with a minimum of pollution, and with a minimal environmental impact.
But in many cases a significant gulf exists between consumers’ green claims and their
actual purchasing power, mainly driven by the price difference of ‘green’ products.
Companies that successfully adopt a ‘green’ policy can generate profits, provide
positive social impact, and reduce environmental impact.
Growing pressure from non-governmental organisations (NGOs) and activists.
Greenpeace for instance publishes a digital ‘Guide to Greener electronics’.
The guide ranks the 18 top manufacturers of personal computers, mobile phones,
TVs and games consoles according to their policies on toxic chemicals, recycling
and climate change.
The media notices companies that show their green stripes. Positive publicity for
going green is not reserved for large companies. Companies taking voluntary steps to
become greener will gain visibility, earn credibility, and develop a reputation for
leadership.
Employee loyalty and retention are less tangible, but equally important benefits to
going green. A sincere sustainability strategy will help your company attract top
talent.
Last but not least, many supply chains have already been affected by physical and
economic impacts of the changing climate and growing demand from Asia.
These include global shortages of water, grain, timber, and metals. Improving all
forms of resource efficiency lessens exposure to these risks.
3.2 Regulations
National and global regulation on sustainability can create a positive platform for
change by reducing business uncertainty and creating new market opportunities.
Proactively partnering with policy-makers, stakeholders and industry rivals in
shaping regulation and policy solutions that benefit business and society will
increasingly be a feature of smart strategy.
3.2.1 Dutch government
The challenge to the Dutch government is to shape environmental policy in such
a way that it is possible to combine economic growth with decreasing the
environmental burden, as these are also expressed in the objective formulated in
Lisbon for economic development in Europe (‘Clean, clever competitive’).
11

The Dutch government wants to make the Netherlands one of the cleanest and most
efficient energy countries in Europe. By the year 2020, the Netherlands aims to
reduce greenhouse gas emissions by 30% compared to 1990 levels, increase the
proportion of renewable energy to 20% and improve energy savings by 2% percent
each year. This applies not just to road traffic, but also to inland navigation, maritime
shipping and aviation. To achieve these targets, the program ‘Clean and Efficient:
New energy for climate policy’ (‘Werkprogramma Schoon en Zuining’) was introduced
in September 2007. This program refers, for instance, to measures for traffic and
transport which encompass stimulating efficient vehicles (greening the tax system),
efficient driving habits, stimulating more efficient transport modalities, and cleaner
fuels for both the business sector and the private sector 6 .
A further aim is to be the logistics hub of Europe with the seaports of Rotterdam and
Amsterdam as well as Amsterdam Schiphol Airport as junctions in the global network
(more details on their current programs in the next chapter). Therefore, the Dutch
government has an integrated approach to the transport and logistics network.
3.2.2 European Union
The EU has also implemented several measures to make transport greener and
more sustainable. To intensify its efforts, the European Commission presented
two different initiatives. The first focuses on making the polluter pay through
internalising the external costs of transport. This means that individual modes of
transport must pay for ‘hidden’ costs generated by their contribution to air
pollution, noise, climate change, congestion and accidents in road transport.
The second initiative includes a package of regulatory instruments combined with
infrastructure and technological measures.
Co-modality (the optimised use of all modes of transport) is another item high on the
European Commission’s agenda. Choosing the mode that is most efficient in both
economic and in sustainability terms can create a high level of mobility and at the
same time protect the environment. With the Marco Polo II program, the EU aims to
shift a substantial part of the expected increase in road freight traffic to more
sustainable forms of transport, such as shipping or rail, or to a combination of modes
of transport in which road travel is as short as possible.
According to an EEA Report the occupancy rate of different transport modes can, in
many cases, be a significant factor in the resulting relative emissions of greenhouse
gases compared to the specific efficiency of modes. In addition to technological
improvements, policies to ensure better capacity utilisation within each mode may
result in substantial additional reductions of emissions of CO2 7 .
Furthermore, the members of the European Union (EU), have committed themselves
also to develop, implement and enforce legislation that makes producers responsible
for the collection, treatment, recycling and environmentally safe disposal of all
electrical and electronic equipment (WEEE/2002/96/EC, 2002). The implementation
6
www.vrom.nl
7
European Environment Agency, Report No 1, “Climate for a transport change”, 2008
12

of other Directives, like the EU Energy Performance of Buildings Directive will just as
well influence sustainable business thinking throughout the supply chain.
3.2.3 China’s regulations push market developments
The Chinese electric bike market has expanded more rapidly than any other mode in
the last five to seven years, from nearly 40,000 produced in 1998 to over 10 million in
2005.
E-bikes, though they floundered twice in the 80s and early 90s, experienced
extraordinary growth in the late 90s to the present due to a combination of
economic, technical, and political factors, summarized below:
1 E-bike technology, specifically motors and batteries, improved significantly
during the late 1990s. Simple technology, a vast supplier base, and weak
intellectual property protection made it easier for e-bike makers to enter the
industry, increasing competition and driving prices down;
2 Due to improving economic conditions nationally, incomes of urban households
and the share spent on transportation both rose considerably;
3 As e-bike prices decreased, gasoline prices rose and electricity prices in rural areas
dropped, making e-bikes more competitive economically with alternatives like
gasoline-powered scooters;
4 National and local government policy motivated by energy and air quality issues
created favourable conditions for e-bike growth;
5 National e-bike standards with loop-holes and flexible guidelines created a rich
opportunity for manufacturers to create e-bikes that appealed to more users,
namely, scooter-style electric bikes.
The history of e-bikes provides an important lesson on the powerful impact of
regulatory policy, given the evolution of technology to a market acceptable product.
In several cities, like the surroundings of Guilin and Yangshuo, the Li River Delta with
its mountains, only e-bikes are permitted. While technological progress was required
to meet the customer demands for economics and performance, the regulatory
environment provided strong impetus for the market to grow and for further
investment in technology evolution. Without this, the e-bike market would not have
emerged.
In September 2009 the Dutch Minister Eurlings of Transport, Public Works and Water
Management paid a working visit to China and participated in a round table conference
‘Sustainable development of ports and waterways’. China is not only investing
heavily in infrastructure, transport and logistics but at the same time has a strong
drive to tackle the safety and environmental problems it is facing. The Yangtze River,
the logistical backbone of Shanghai, will be developed as a ‘green waterway’,
meaning far reaching actions in respect to emissions, pollution and dumping of waste
materials. Furthermore, Mr. Yang Zan, Deputy DG, Water Transport Bureau, Ministry
of Transport announced during the working visit round table that in the future,
Chinese ports will only allow for electrical transport and handling equipment.
13

3.2.4 Abu Dhabi and Dubai are taking the energy lead
It sounds like the start of a fairytale: In the heart of Abu Dhabi work has started on
the most ambitious sustainable development in the world today. Masdar City, is to
become the world’s first carbon-neutral, zero-waste city, designed to be a pedestrian-friendly
environment. Its aim is to become the silicon valley for clean, green
and alternative energy. Masdar City will be built on six and a half square kilometres
and will grow eventually to house 1,500 businesses, 40,000 residents and 50,000
commuters, home of the Masdar Institute of Science and Technology (MIST) and the
International Renewable Energy Agency (IRENA). A city where current and future
technologies will be funded, researched developed, tested and implemented.
Masdar is a wholly owned subsidiary of the Mubadala Development Company,
the Abu Dhabi government’s investment vehicle 8 . A Dutch company, 2getthere,
will provide fossil-free vehicles for the first phase of the city 9 .
In Dubai, a similar initiative has been launched. Sheikh Mohammed bin Rashid Al
Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai has
announced that Dubai is looking at energy conservation and solar and wind schemes
to help meet its electricity needs. The sheikh said that around 14% of peak electricity
needs could be saved by 2015 through a demand management program. ENPARK, the
Energy and Environment Park is a model sustainable community and a Free Zone
spanning over 8 million square feet of office, research centre, residential, educational
and leisure facilities located in Dubai, United Arab Emirates. ENPARK is a special
destination for clean energy and environmental technology companies to operate
and a fully-integrated knowledge community that includes programs, services,
partnerships and amenities to support the success of environment companies and
their employees. ENPARK’s ambition is to offer a world class sustainable lifestyle and
build a sustainable culture 10 .
3.3 Implementing green efforts at an early stage
A recent study conducted by the Center of Innovation for Transport and Logistics at
the Berlin Institute of Technology “Global Logistics 2015+”, showed that the
majority of the respondents expect that the absence of ecologically sustainable
logistics will lead to financially tangible disadvantages. However, in most companies,
efforts for implementing green logistics are still at an early stage. The majority has
not yet assessed the environmental compatibility of their logistics (and even less of
their supply chain) nor have they established concrete future targets or comprehensive
actions in this matter, which is often caused by an absence of instruments,
methods or standards. Among various means towards environmentally compatible
logistics, the largest growth will be encountered by the measuring and monitoring of
environmental impacts of logistics (e.g. for monetary costs and damage to human
health or natural environment and CO2-emissions). Further strategies that will
display strong growth are environmentally friendly sourcing, transportation and
packaging. Despite the growing importance of environmentally compatible logistics,
only limited funds are available for its financing in most companies, so the study
showed.
8
www.masdarcity.ae
9
www.hollandtrade.com
10
www.enpark.ae
14

In addition to own efforts, companies increasingly expect partners such as suppliers
and logistic service providers (LSPs) to get engaged in finding and implementing
environmentally compatible solutions.
3.4 Hurdles in the process of going green
Current and future goals of companies regarding environmentally compatible
logistics are 11 :
> reduction/avoidance of transport;
> increased capacity utilisation in transportation;
> increased employment of mass transportation, if suitable;
> recycling/reusable packaging;
> reduction of the use of resources (water and energy);
> compliance with ISO’s environmental standards.
Despite the diversity of the mentioned goals it becomes clear that most of them
represent isolated single solutions. In many companies, the path towards green
supply chains has not yet been determined. Among other things, this is caused by
the non-existence of diverse external and internal basic conditions. To companies it
seems to be unclear what the precise legal requirements and standards will be.
Furthermore, in many cases tools and methods for the creation of green supply chains
seem to be only partially known, are not mature enough or are just not available.
Only 12% of companies rated green issues among their top three supply chain
priorities according to a survey executed by Ernst & Young 12 . According to a study 13
by the Business Performance Management (BPM) Forum and E2open the global
business community have been slow to address issues when it comes to sustainable
supply chain management, despite the enthusiasm regarding sustainability
expressed by these organisations. Operations, logistics and supply chain executives
lack the understanding of how to go green and remain green across complex, global,
multi-tiered supply and distribution networks. Some of the major findings of this
study are 14 :
> nearly two-thirds have marginal or no visibility across all tiers and levels
of their value chain;
> 78% of companies rate the level of synergy and accountability in their global
trading network as suboptimal;
> 42% of companies surveyed have yet to even consider carbon footprint or
greenhouse gas emissions across their entire extended supply chain.
76% of respondents say their customers have not requested information on
carbon and emissions containment, but two-thirds expect customers to demand
this in the next year;
> Only 20% of respondents utilized the advantages provided by a centralized eHub.
11
Center of Innovation for Transport and Logistics at the Berlin Institute of Technology “Global Logistics 2015+”, 2009
12
Ernst & Young, “Green for go. Supply chain sustainability”, 2008
13
The study is titled “Acceleration of ECO-Operation: Achieving Success & Sustainability in the Supply Chain”
14
www.greeneconomypost.com
15

3.5 Level of awareness is rising
On the other hand, 85% of respondents in the BPM and E2open survey say they are
actively involved in new programs that drive operational efficiency, corporate social
responsibility (CSR) and cost-savings across supply and demand chains. Therefore,
let’s not over dramatise. The level of awareness is rising and there is an appreciation
of the opportunities it offers within the supply chain. Coupled, however, with
concerns over the cost and complexity of addressing it.
Many transportation companies and LSPs are able to enumerate day-to-day costs
such as road charges, waste charges, waiting time of trucks in traffic hold-ups and
fuel consumption. Although sustainability is not the main driver for this, they are
very well used to optimising the efficiency of their transports, by, for example,
improving the capacity utilisation and avoiding empty runs.
The most popular measures are those which typically require a relatively low
investment and lead to a reduction in costs 15 . They included working with targets for
the loading degree and to create a more efficient transport of goods and to stimulate
behaviour that will lead to higher fuel-efficiency and a lower environmental impact.
The implementation of, in particular, the first measure is however frustrated by
regulations limiting the hours for deliveries. Due to these regulations, it has become
extremely difficult to really take logistical efficiency to a new level. After all, if the
time-frame for deliveries is limited, more trucks will need to be deployed at the same
time in order to make the same amount of deliveries within that time-frame.
3.6 Revenue opportunities: new product development and green
marketing or should we call it ‘green washing’?
Four of the top five expected benefits generated by green activities are external
market-oriented benefits. The top two benefits that rate either most important or
important are enhanced public relations (50 out 57 mentions) and enhanced brand
image (49 out of 57 mentions). The third is reduced energy costs (49 out of 57
mentions) followed by increased consumer loyalty and revenues (44 and 45 mentions,
respectively) 16 .
Some ‘pessimists’ are of the opinion that companies gain ISO accreditations for
marketing purposes, just to tick a box on a supplier questionnaire or to include in a
tender.
3.7 Does ‘going green’ generate turnover?
Difficulties are not only seen in the lack of comprehensive strategies, but also in
assessing related financial impacts. Many companies are not yet able to quantify the
costs that could be avoided or would arise due to a switch to a green supply chain
approach, nor are they able to determine how additional costs could be funded.
If companies do have a budget, only limited funds seem to be available and the funding
is mostly tied to single solutions/projects, instead of serving long-term strategies 17 .
15
PricewaterhouseCoopers, Transportation & Logistics, “Moving green. Sustainability – insight into the Transportation
and Logistics sector”, 2009
16
Florida International University, College of Business Administration, Ryder Center for Supply Chain Management,
“The state of Green Supply Chain Management. Survey Results”, 2008
17
Center of Innovation for Transport and Logistics at the Berlin Institute of Technology “Global Logistics 2015+”, 2009
16

There is no easy way to quantify the cost of going green. According to a paper
written by the Rotterdam School of Management 18 only a limited number of
initiatives for environmentally-friendly production have proved to be profitable.
Literature and practice suggests that substantial improvement in the environment is
only possible with substantial investments that brings no or negative financial
returns (Walley and Whitehead, 1994). The adoption of cleaner solutions is generally
bounded by an increase in costs. Companies should look at the cost of sustainability
initiatives as an investment and should look for good trade-offs between environmental
impact and costs. The Return on Investment (ROI) of going green can be more
sales, increased market share, enhanced visibility, happier employees, and a better
brand. And, according to Anna Clark, President of EarthPeople, “cleaner air, a
healthier climate, and a better future for your kids are not bad benefits either”.
63% of the respondents in the E&Y Green for Go survey see sustainability as an
opportunity for revenue growth. According to a recent survey performed by
Deloitte 19 , ‘cost savings’ and ‘competitive advantage’ were identified as the top
two business drivers for GrSCM, reinforcing the view that supply chain efficiency and
innovation, consistent with sustainability goals, should be the primary aims of green
supply chain initiatives. Yet a surprisingly high number of participants acknowledged
that GrSCM measures to date are not expected to generate positive ROI for at least
three years (30%) – if at all (22%).
Furthermore, companies increasingly expect LSPs to enhance the greenness of
existing services and to outline and offer further methods of resolution in their
customer’s logistics. It is expected that in many cases LSPs will have to provide the
service costs neutrally and finance higher efforts through internal savings, for
instance, generated by higher energy efficiency.
Although final customers are the main driver for a company going green, passing on
additional costs to customers is not considered a viable option for the financing,
since they would not be willing to assume these extra expenses. The shippers, who
maintain a very strong negotiating position, as being the ones who have the power in
many supply chains, are mainly interested in pricing at the level of procurement.
Due to the very small margins the transportation sector has to operate with and the
fact that sustainable business in practice is not rewarded by shippers, any attempt to
present sustainability-related efforts as a competitive advantage, seems to be
perceived as futile and possibly even as a waste of investment.
A first step towards integrating sustainability better in the transport and logistics
sector would be for companies to start monitoring and reporting on key environmental
and social performance indicators. This is necessary in order to gain insight into
the current environmental and social impact and to make improvements without
large initial investments 20 , where possible.
18
Quariguasi Frota Neto, J., J. Bloemhof, J. van Nunen, E. Van Heck, “Designing and evaluating sustainable logistics networks”,
International Journal of Production Economics, 2008
19
Deloitte, “Green means go. Green supply chain management: opportunity today, imperative tomorrow”, 2008
20
Based on NEA’s own research and PricewaterhouseCoopers, Transportation & Logistics, “Moving green.
Sustainability – insight into the Transportation and Logistics sector”, 2009
17

3.8 Rewards of going green are both tangible and intangible
Companies that adopt a pro-environment policy will see numerous positive results,
both tangible and intangible. Early adopters of environmental strategies and green
supply chain initiatives:
> mitigate business risks, by differentiating themselves from competitors,
transforming their companies into industry leaders, building credibility with
stakeholders and attracting investors;
> reduce operating costs;
> motivate better performing suppliers, become preferred vendors in green supply
chains and attract consumers in the rapidly-growing green marketplace;
> preserve business continuity, by attracting (the interest of) top job candidates,
enhancing employee satisfaction and enhancing market access and degrees of
business strategy freedom;
> create significant competitive advantage by creating brand distinction
and recognition;
> earn publicity with the local, regional or even national media.
3.9 Five stages towards sustainability
Supply chain executives understand the benefits of better managing collaboration
and sustainability in the value chain — now they just have to make it happen.
Companies today can be classified in one of five stages of green supply chain
maturity. Those stages are 21 / 22 :
Not started and/or defensive companies are either wholly ignoring sustainability
by not taking action to address it or, at best, are taking action solely to the lowhanging
fruit of sustainability by disclosing their exposure to environmental
and social risks to their suite of stakeholders.
Problem solving companies are going one step further - these companies have been
gathering information, do not have a corporate sustainability statement or report,
but have initiatives in progress.
Compliant companies are adhering to current and emerging regulation to ensure that
they avoid regulatory fines and the related damage to their reputation that such
fines could cause.
Eco-efficient companies are coordinating their sustainability efforts, across their
functions, units and locations, at the enterprise level. They are wholly transparent
to the market - even if it means shedding light on the areas in which they need to
improve. These companies see sustainability as an opportunity for growth;
to capture this growth, these companies are reframing existing products and
introducing new products to appeal to the sustainability conscious consumer.
Sustainable companies have gone one step further – they have redesigned their
corporate vision to be based on sustainability and are actively re-engineering their
processes and supply chains to eliminate energy, water and waste inefficiencies
while adhering to the strictest ethical and moral standards possible.
21
Accenture, “Compatible aims: sustainability and high performance”, 2009
22
Deloitte, “Green means go. Green supply chain management: opportunity today, imperative tomorrow”, 2008
18

In spite of the payoffs that some big businesses have received from going green,
many companies still view a sustainability commitment through the lens of
compliance. When companies progress beyond compliance and extend their
sustainability actions strategically, they become more nimble, and better equipped
to meet the rapidly changing demands of the marketplace.
not started /
problem
eco-
defensive
> 15%
solving
> 20%
compliant
> 40%
efficient
< 15%
sustainable
> 10%
Looking at the analysis by industry, the Florida International University College of
Business Administration revealed that the Manufacturing & Retail sector is more
advanced than the Transportation & Logistics sector when it comes to ‘green’
activities. 85’% of the companies in the Transportation & Logistics sector are either
in the early stage or do not have a green strategy yet, while about 60% of the
companies in the Manufacturing & Retail sector are already past the early stage.
This data suggests, along with other research findings, that Transportation &
Logistics service companies are generally getting ‘pulled into’ green activities by
their customers, namely Manufacturers & Retailers.
There is no one-size-fits-all approach to sustainability, but here is a good plan
of action:
> Investigate where your company can conserve resources and compose a
strategic sourcing and supplier engagement;
> Engage your employees as champions of the effort;
> Implement conservation measures throughout operations and facilities,
improve efficiency of site operations and balance the economies of stock levels,
service and order quantities;
> Optimise network and transportation and provide integrated service
management, returns, reverse logistics and parts management;
> Communicate your green efforts to stakeholders;
> Seek ways to integrate an overall strategic approach to sustainability in all areas
of your company;
> Support industry and community sustainability initiatives.
19

Diamond Management & Technology Consultants developed a useful framework 23
that provides a structured approach that includes several of the necessary
dimensions to plan and implement a successful green supply chain agenda.
Green Supply Chain Framework
Succesful Green
Supply Chain
Implementation
Environmental
Compliance
Sustainable Supply Chain Efficiencies
Dimensions of
Green Supply Chain
Alignment
Operational
Colloboration
Business Partner
Capabilities
Business
Measurement
Metrics and
Organisational
Foundation for Green
Supply Chain
Visible Leadership
Business Case
Program Governance
Source: Diamond Management & Technology Consultants
In this framework the key to extracting business value lies in establishing a long-term
green supply chain strategy that is aligned with corporate strategy and approached
top-down – with strong sponsorship. It also requires a strong business case for the
green supply chain that highlights a prioritised list of targeted opportunities and a
phased adoption roadmap. Finally, the initiatives need to be integrated with other
companywide projects to ensure that one does not compromise another.
In order to effectively implement a Green Supply Chain, the strategy should be
embedded in the company’s Supply Chain and Operations organisation, as well as
part of Marketing and Sales. Corporate Communications should be linked with
sustainability initiatives to ensure that the impact of the initiative is being communicated
to customers, shareholders, and the general public.
23
Diamond Management & Technology Consultants, “The case for a ‘green’ supply chain: Turning mandate into opportunity”, 2008
20

4 | How companies deal with
sustainability within the
supply chain
4.1 Introduction
Facing sustainability issues is not easy. Timberland for instance was surprised to
discover that its major carbon impact occurred before the company even got involved
in the making of shoes. It was the manufacture of the raw materials, not the manufacture
and transportation of the final product, that caused the greatest impact 24 .
4.2 Isolated approaches still dominate
As has been pointed out in the previous chapter, companies who are involved in
implementing sustainable strategies mostly have isolated approaches in separate
parts of companies or their process-chains. The most common strategies are:
> monitoring and accounting of green impacts. The intention here is to calculate
the own carbon footprint and to start with environmental reporting;
> sustainable transportation. Companies increasingly want to utilise co-modal
transports and expect renewable energy to play a much more important role
in the future;
> green packaging. Ranging from applying reusable boxes and containers to
recycling of packaging materials and the usage of environmentally compatible
packaging materials (e.g. made of biodegradable materials and the adoption of
reusable packaging);
> sustainable sourcing. Companies seek to audit their suppliers greenness or
purchase goods that are certified ‘green’;
> involvement and cooperation with LSPs. Companies are assessing LSPs’
sustainable achievements during tenders and form partnerships to jointly develop
green solutions. Transport Intelligence stated in 2008 that 90% of outsourcing
decision-makers have indicated that ‘environmental stewardship’ will influence
the outsourcing choices they will make when contracts come up for tender
during 2009.
And that is not all. Also sustainability of the built environment is quickly becoming
an active consideration in traditional cost-benefit analysis. National and international
certification programs and award programs are setting standards, following in
the wake of a rapid increase in the public’s awareness of sustainable development.
The implementation of the EU Energy Performance of Buildings Directive and, in
particular, the introduction of energy performance certificates (EPCs), is providing
an EU-wide benchmark. The extent to which companies are prepared to push forward
with ‘green’ agendas varies across sectors and markets. Progress can depend on
wider environmental awareness. A case in point is the retail sector, where consumer
24
Accenture, “Achieving high performance: the sustainability imperative”, 2008
23

demand for ethical products over recent years has fed into the wider social responsibility
efforts of retailers themselves 25 .
4.3 ‘Greening’ gains importance in all sectors
Greening the industry gains in importance in all sectors. In high-tech, electronics,
fast moving consumer goods (FMCG), followed by automotive original equipment
manufacturer (OEM), sustainable solutions hold the greatest importance 26 .
This applies to the own implementation and expectations of supply chain partners.
Retail, although surprising, follows this ranking at some distance. Along with FMCG
it will display the highest future growth in these issues. The majority of companies in
these sectors consider sustainable concepts as a competitive advantage. In these
industries there even seems to be a humble willingness to pay for sustainable supply
chain concepts.
Automotive
Just recently, William Clay Ford Jr. (great-grandson of Henry Ford) and executive
chairman of Ford Motor Company stated in an interview 27 that Ford will be winning
through sustainability. Profits will rise, as it delivers vehicles that are better for the
environment, made in plants that are increasingly energy efficient and, consequently,
less costly to operate. And Ford Motor Company is not the only car manufacturer
going green. The Toyota Prius is a fully hybrid electric mid-sized car developed and
manufactured by the Toyota Motor Corporation. It first went on sale in Japan in 1997,
making it the first mass-produced hybrid vehicle. It was subsequently introduced
worldwide in 2001. Also other car manufacturers are implementing green strategies.
Renault for instance, is coming up with new concepts (ECO2 WAY) and TV commercials
to show its commitment towards the environment. Volkswagen states to be
dependent upon the services of nature in many respects. With “forward-thinking
management of opportunities for and risks to biodiversity, Europe’s number-one car
manufacturer wants to provide an active contribution to sustainable development,
and it wants to set a benchmark for other companies”. Volkswagen actively supports
the spatial groupings of traffic routes designed to permit free movement for animals.
Volkswagen pushes for the development of efficient technologies and innovative
vehicle concepts (BlueMotion and EcoFuel) and initiates projects for the development
of economical and at the same time environment-friendly driving 28 .
Mars, Incorporated
Throughout the entire supply chain Mars acts upon possibilities to contribute to a
good working and living environment, starting with the purchasing of raw materials
and ending in a responsible consumption of the products. Together with their
suppliers and customers they aim to make a difference in production and logistics
too.
Mars is proud to be the first global chocolate company to commit to fundamentally
changing the way sustainable cocoa farming practices are advanced by aiming to
certify its entire cocoa supply as being produced in a sustainable manner, by 2020.
25
Cushman & Wakefield, “Green buildings – a behavioural change”, 2008
26
Center of Innovation for Transport and Logistics at the Berlin Institute of Technology “Global Logistics 2015+”, 2009
27
McKinseyQuarterly, Automotive, Strategy & Analysis, “Building a sutainable Ford Motor Company: An interview with Bill Ford”, 2010
28
www.volkswagenag.com
24

In April 2009 together with their forwarder, Mars launched the ’Green Order
Initiative’. This makes Mars the first European food company calculating carbon
dioxide emission on order placement level and also to display this on waybills.
Green Order is to be fully integrated in the normal logistics process, collaboration
with logistic and commercial contacts being an important condition for success.
Now each supplier has a better insight into its order pattern and the impact on the
environment. This way Mars makes suppliers more aware and it enables Mars to
optimize their transport. Mars strives for Green Order to be a generally accepted
standard within the business 29 .
Logistics Service Providers
In October 2009, UPS became the first small package carrier to offer its customers
the ability to offset the carbon dioxide emissions generated by the transport of their
packages within the United States 30 .
DB Schenker wants to become the leading green logistics provider – and by 2020
discharge 20% less CO2 than in 2006.
Since the first ‘Climate Counts shipping scorecard’, released in late 2007, the biggest
improvements in the sector have come from FedEx and DHL. FedEx nearly doubled its
score to reach the second place among major shippers after coming in last in 2007.
Along with other improvements, both FedEx and DHL did a better job of measuring
their global warming pollution in 2008. The two companies also strengthened their
goals to reduce greenhouse gas emissions, improved their reporting on the achievement
of real reductions, and increased the climate accountability of their management.
In addition, both DHL and FedEx have taken positive and increasingly vocal
positions on public policy and legislation that would address global climate change 31 .
DHL has committed itself to minimizing the environmental impact and has a
comprehensive environmental management program in place to do so. In 2008, the
ambitious ‘GoGreen’ climate protection program was launched. The goal is to reduce
CO2 emissions for every letter and parcel sent, every ton of cargo transported and
for every square meter of warehouse space used by 30% by 2020 (compared to the
2007 baseline) 32 .
4.4 Dutch companies accepting the green challenge
4.4.1 Manufacturers
DESSO
In signing a partnership agreement with the Hamburg-based Environmental
Protection Encouragement Agency (EPEA), DESSO has become the first carpet
manufacturer in EMEA to adopt the Cradle to Cradle design. It marks DESSO’s radical
decision to move beyond ‘mere’ sustainability in producing its carpets and artificial
grass, making a fundamental, sweeping advance in its already impressive environ-
29
www.mars.com
30
www.carbonneutralups.com
31
environment.about.com, “Environmental issues. Shipping companies improve climate performance in 2008”, 2009
32
www.dp-dhl.com
25

mental credentials. DESSO has been working on the Eco effectiveness and Eco
efficiency. Their current energy efficiency index is 73%. Today, waste recycling from
their factories exceeds 90%, and all packaging is 100% recyclable. At the production
facility at DESSO in The Netherlands alone, they have reduced energy consumption
(per m2 of product produced) by 23% since 1998, resulting in a 23% reduction in
CO2 emissions 33 .
Definiton of Cradle to cradle 34
Cradle to Cradle means that non replaceable natural resources can be used again and
again in the same way. It is a bit different from recycling that is applied more often
since it is also taken into account that natural resources should be used again at the
end of the lifetime of the product as the same substance (waste equals food).
Cradle to Cradle is about eco-effectiveness and ‘doing the right things’.
Dutch Van Houtum’s tissue paper first with C2C certification
The Dutch company Van Houtum Papier is the world’s first recipient of Cradle to
Cradle (C2C) certification which it has won for its toilet paper product, Satino
Nature. Van Houtem received the designation from the American MBDC agency.
It guarantees that the production process for Satino Nature is entirely environmentally
friendly. Van Houtum aims to operate in a CO2-neutral manner in its production
of sustainable toilet paper and paper towels, to replace grey gas with green gas,
and to use packaging materials that do not release biologically unfriendly substances
into the environment. Van Houtem’s products are distributed throughout Europe,
North America and the Caribbean 35 .
Mosa the world’s first Cradle to Cradle ceramic tile factory
Holland’s Royal Mosa is the world’s first ceramic tile factory to receive the Cradle to
Cradle certificate. An intensive research and development program, lasting two
years, preceded the certificate. Together with the EPEA Institute Royal Mosa
scanned its entire manufacturing process, raw materials, suppliers and products.
Materials that were not sustainable were replaced by materials that are. Mosa
adapted their production methods where possible to make high quality tiles which
are recyclable. Now Mosa tiles contain 10% to 40% recycled material. Tile waste
from within the factory was already recycled in a closed cycle, but other tile waste
often ends up in landfill. Therefore the company has started a pilot project in the
Netherlands to separate and collect tile waste from construction sites and use it for
new tiles. The result of this program is that most Mosa tiles are being classified as
‘to be used in the technical Cradle to Cradle-cycle, but safe for the biological cycle’.
The company also launched pilot projects to collect tile waste as raw material to be
used for new tiles 36 .
To maximize their effectiveness for the global company, greening the supply chain
initiatives should not exist separate from the mainstream activities of the business.
Rather, they should be fully integrated with and reflect the core value proposition of
the business strategy. They should yield measurable results that are part of an
33
www.desso.com
34
McDonough, W. and Braungart, M, “Cradle to Cradle: Remaking the Way We Make Things”, 2002
35
www.hollandtrade.com
36
www.mosa.nl
26

integrated business-sustainability plan. Business managers should directly
participate in their design and implementation.
4.4.2 Transport and logistics
It seems that a lot of logistics companies are lagging behind compared to front
runners in the sector (among others TNT, Air France/KLM, Port of Rotterdam,
Amsterdam Airport Schiphol). But still, there are many inspiring examples and
these are not only developed by global players:
> The Van Gansewinkel Group sees waste as the foundation for new raw
materials and energy. Van Gansewinkel’s role and responsibility is to complete
the circle. In recent years, Van Gansewinkel has transformed itself from a
traditional waste collector to a sustainable (and award winning) raw materials
and energy company;
> Boekhout Transport won one of the Lean and Green Awards. Together with the
Climate Neutral Group, Boekhout have calculated the CO2 emissions from their
fleet and expressed it in terms of CO2 emissions per pallet/km transported.
The entire emissions generated by Boekhout distribution will be offset, by
ClimateNeutral Group, with investments in tree planting and energy projects.
For International Full Truck Loads they are offering carbon-neutral transport as an
option for their clients;
> Rotra Forwarding b.v. introduced the Mercedes-Benz Econic NGT (Natural Gas
Technology) distribution truck and is the first company within Europe to use a
truck on ethanol developed by Scania;
> Ten Dutch transporters decided to report on their CO2 emission in their annual
report: Den Hartogh Logistics, Jan de Rijk, Van den Bosch, H&S Groep,
HZ Transport, Bas Logistics, Vos Logistics, Gé Simons, Rutges en Albert Keijzer;
> EVO (Dutch shipping counsel) proposes a 10 step plan to reduce CO2 to
the government.
Nowadays, shippers are hiring their own intermodal transport managers in order to
develop sustainable transport. Companies are getting more and more sensitive with
regard to sustainability as a sales argument to purchase intermodal transport like
rail and barge transport. Van den Bosch Transporten have opted to adopt a proactive
approach with respect to restricting the emission effects as much as possible.
In applying intermodal transport, in which the company puts a strong believe,
Van den Bosch Transporten intends to restrict its emissions of harmful substances.
The company in its own words, “we want to be a front runner with respect to
corporate sustainability and not await market developments. Intermodal transport
has grown considerably over the past couple of years, even partially at the expense
of road transport”.
In order to convince the customer of the positive impact on emissions of rail
transport, compared to road transport, Van den Bosch Transporten developed a
monitor with which the CO2 emission can be calculated. Based on the most up-todate
calculation tools, the emissions of a rail transport are compared to those of the
same transport by road. It turns out that rail transport has much lower CO2 emissions
27

than road transport, the difference can amount to 50%. Over long distances within
Europe, intermodal transport is always advantageous. The company also has an
“Emission Tool” publicly available on its website. Customers can calculate for
themselves the effects if a load is transferred from road to rail or barge 37 .
Source: www.vandenbosch.com
Amsterdam Airport Schiphol wants to become Europe’s most innovative and
sustainable airport, with an eye to combining growth of the airport with efforts to
minimise its environmental impact. The airport also seeks to assume a leading role in
addressing the global climate problem. By 2012 Amsterdam Airport Schiphol intends
to be climate-neutral in respect of all its own on-site activities and, by 2020, to rely
on sustainable energy for 20% of all its energy needs. To realise these objectives,
in 2008, Amsterdam Airport Schiphol started using the world’s first kerosene vapour
conversion system. 2008 also saw the start of a water-purification test using algae.
To ensure safe take-offs during wintertime, Amsterdam Airport Schiphol uses glycol
and potassium acetate as de-icing fluids to keep the taxiways free of ice and remove
ice from aircraft wings and bodies. A basin is now being used to test whether algae
can break down the glycol and potassium acetate and whether it will be possible to
generate energy from the resulting biomass. Various other initiatives were to follow
37
Rail Cargo Information Netherlands, “Spoor in cijfers”, 2009
28

over the course of 2009. Construction started on a new office building for
transavia.com at Schiphol-East, the first office building in the Netherlands designed
to meet the highest sustainable construction standards of the internationally
renowned LEED system’s (Leadership in Energy and Environmental Design) Platinum
Certificate. Schiphol also became the first business in the Netherlands to start a
trial with new roof cladding capable of filtering nitrogen oxides (NOx) from the air.
The airport was also one of the first organisations in the Netherlands to purchase
the fully electric ‘Th!nk City’ car 38 .
The Port of Rotterdam Authority is working to become THE European, world-class
port by conducting its business operations in a sustainable and socially responsible
way. Sustainability is one of the Port Authority’s five key values. The construction
of Maasvlakte 2 provides unique opportunities for improving the environment.
Over the next 25 years many measures (for instance with a focus on goods transport,
links with the hinterland, traffic emissions, traffic management, intelligent vehicles
and the pricing policy for road traffic) will make traffic between the port and the
hinterland cleaner and more efficient 39 .
38
Schiphol Group, “Amsterdam Airport Schiphol: leader in innovation for over 40 years”, 2009
39
www.maasvlakte2.com
29

5 |
Impact of sustainability on the
logistics programs at the NHTV
Academy for Urban Development,
Logistics & Mobility
5.1 Introduction
Sustainability is crucial in the programs of Higher Vocational Education. As sustainability
is so far still fragmented in the programs, the Dutch ‘Kennisakkoord’ urges to
fully integrate sustainability throughout the complete program.
Sustainability is also affecting the competition for talent. Recruits in the labour pool,
particularly among the younger segment, are increasingly considering either a
company’s posture on sustainability issues or the connection between their job and
sustainability. College graduates today are much more mission-oriented than those
in the past, and they are looking for companies that match their personal values.
If the company they join does not reflect their beliefs, they are more likely to push
their values on the company than let the company push its values on them.
A 2007 Monster.com study found that 92% of students are more inclined to work for
a company that is environmentally friendly 41 . Companies may need to become more
ethically and socially responsible in order to attract candidates. This also has its
repercussions on the way students are being educated.
NEA Transport research and training Ltd., as a member of Panteia, operates on a
completely climate neutral basis. Panteia attaches great importance to sustainability
in the provision of services both to its own clients and within its own organisation.
Panteia translates sustainability into concrete targets and criteria - criteria that
match, but in actual fact often exceed, the criteria applied by its clients.
NHTV educates professionals who are aware of the importance of (corporate) social
responsibility and who can translate that awareness into feasible solutions to benefit
society. NHTV formulated its strategic plan in order to create a process towards
further introduction of social responsibility, to find a joint focus and to determine
what the strategic goals are for 2012.
5.2 How will the lectureship contribute to the logistics programs
of NHTV Academy for Urban Development, Logistics & Mobility?
The aim of the Lectureship Logistics & Sustainability is to contribute to the incorporation
of sustainability in the logistics programs 42 of NHTV’s Academy for Urban
Development, Logistics & Mobility by means of a research and innovation program
that is closely connected to NHTV’s ‘Kennisplatform Vitale Logistiek’ and the
Research and Development Program for Logistics and Supply Chain Management
41
Accenture, “Sustainability and its impact on the corporate agenda”, 2009
42
Logistics programs: ‘Logistiek en economie’ and ‘Logistiek en technische vervoerskunde’
31

Dinalog (Dutch Institute for Advanced Logistics). The main topics of the lectureship
are: green Supply Chain Management (GrSCM), ICT & supply chain optimisation,
and co-modality. By combining the development of practicably applicable (new)
knowledge, NEA’s project knowledge and experience, and by offering student
internships – combined with the strong partnership with the (regional) business
community – knowledge development will be nourished and the business community
will be strongly involved in the education and research program.
In this way, the lectureship will contribute to the competitive position of the Dutch
business community and the development of a dynamic knowledge economy.
Core focus of the lectureship will be on the necessity of ‘green’ and on green
operations (network design and reverse logistics, transportation, green manufacturing
and re-manufacturing and waste management). Elements of the research
program will definitely contain the development of instruments/methods and
comprehensive strategies for a clear establishment of green impacts of supply chain
management, together with the assessment of related financial impacts.
Not only to be applied within the context of large companies, but especially also
for small and medium sized companies.
32

6 |
Conclusions
Studies highlight the pressure on supply chain design to supply products that are
environmentally friendly in their sourcing, production, delivery, usage and disposal.
Not just for marketing purposes or ‘green washing’. While companies sometimes
limit innovation to isolated flagship products, benefiting their reputations by
association, the real challenge is to mainstream them across existing product ranges.
Greening the supply chain is an industry issue that will only gain importance over the
years to come. Utilising network design, optimisation and planning systems, which
incorporate, for instance, carbon footprint consideration, but also sourcing,
procurement and end-of-life, will therefore be a crucial ally in ‘greening’ the supply
chain and providing supply chain executives with a transparent view of the entire
supply chain. Although sustainability programs may vary by industry, the basic needs
for transparency, communication and collaboration are similar.
GrSCM is here to stay, the ‘green revolution’ has not yet started. The development of
green supply chain models, the consequences for supplier and partner selection and
improved concepts in, for instance, reverse logistics and Cradle to Cradle should be
part of an integrated approach to green supply chain management. Several recent
studies reveal however, that most strategies are not real long-term strategies, but
isolated single solutions. Difficulties are not only seen in the lack of comprehensive
strategies and the fact that instruments/methods for a comprehensive capturing of
green impacts of supply chain management are not known, but also in assessing
related financial impacts.
GrSCM improves operations by employing an environmental solution:
> improves agility – GrSCM helps mitigate risk and speeds up innovations;
> increases adaptability – green supply chain analysis often leads to innovative
processes and continuous improvements;
> promotes alignment – GrSCM involves negotiating policies with suppliers and
customers, which results in better alignment of business processes and principles.
A critical consideration in this process is the role 3PLs can play in restructuring the
supply chain to better meet current and emerging conditions, as well as serving in
a more strategic capacity in the new infrastructure that results. In this respect the
transport and logistics sector faces some serious barriers that keep the sector from
really focussing on making the business more sustainable. These barriers include the
small margins due to high competition within the sector, regulation related to
time-frames for delivery in shopping centres and the strong position of the shippers.
Transportation is very much in vogue as a topic of green discussion. We must be
aware of the fact that we are not merely confusing the desire to reduce spending
on high-priced fuel with the goal of becoming green.
33

Furthermore, it is of utmost importance to keep pace with changes to relevant
regulations at a national and European level when it comes to operating in a
sustainable way.
1 Sustainability is becoming an increasingly important consideration to supply
chain management executives;
2 Most companies are still struggling with obtaining verifiable consistent data
to measure value chain effectiveness and environmental responsibility;
3 Consumer awareness and increased regulation will put added demands on
companies to drive green initiatives and efficiencies in the supply chain;
4 The new imperative requires that sustainability becomes woven into the core
strategies of companies and public sector organisations.
Once companies gain the proper motivation and start looking at the greening of
their supply chains in earnest, supply chain managers will need to focus on three
areas of relevance for them:
1 Greener product and packaging design
Designers will need to use the maximum amount of environmentally-safe product
components, and finished goods and packaging will need to be more biodegradable
and minimally harmful to the environment.
2 Supply network compliance
It is not good enough for a company to be environmentally friendly if any of their
suppliers - as removed as they may be from the end product - are not themselves
green. It will become imperative for companies to do an audit of their suppliers and
their suppliers’ suppliers to ensure every firm - both local and global - that has an
impact on their products is complying with green guidelines.
3 Reverse logistics
As governments at both national and regional levels start imposing increased
regulations on recycling, up-cycling etc. supply chain systems will have to accommodate
products being returned for recycling or disposal at end-of-product life.
This will require a truly closed-loop supply chain where goods have to return to the
supply chain to be broken down and properly disposed of.
By means of the lectureship we want to contribute to the above by developing a
research program in which both companies, NGOs, (local) governments, colleagues at
NHTV and NEA and students can participate. I therefore really look forward to the
three years ahead, in which we are really going to make things happen!
34

References
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36
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McDonough, W. and Braungart, M,
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Colofon
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Waldo van Bokhoven | BOWfor
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NEA Transport research and training Ltd.
P.O. Box 276
2700 AG Zoetermeer
The Netherlands
Phone +31 79 322 22 21
Fax +31 79 322 22 11
www.nea.nl
NHTV Breda University of Applied Sciences
P.O. Box 3917
4800 DX Breda
The Netherlands
Phone +31 76 533 22 03
Fax +31 76 533 22 05
www.nhtv.nl