c

  c c
g c$! !
c%c&'$!$ccccccccccccccc
ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc
ccccccccccccccccccc c


Æ
  

SESSIONÆccccccccccccccc
cccccc

SUBJECTÆcccccccccccccc
c
c

cccccccccc

SUBMITTED BYÆccccc

STUDENT IDÆcccccccccc

SUBMITTED TOÆcccc 
 c ! c

DATEÆccccccccccccccccccccc "#c cccccccccccccccccccccccccccccccccc c

c
c

ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc •
 


c


 c

cccc

ccc

ccc

c c
!
cccc
"
c #c   cc c
$
c
%
&c
c

c
c



  
In this course work I will try to demonstrate the supply chain management key concepts and
the relationship between the green or sustainable logistics. As the basic requirement is the
cost reduction and customer satisfaction. So in order to understand the green concept we need
to understand the basic concepts of logistics and its components.

9

 

Supply chain management basically coordinates between the suppliers, intermediaries and
customers. It also deals with the supply and demand management within the organization and
across the organizations as well. Diganzo (1999) states that ³The set of activities whose
objectives is to move items between origins and destinations (usually from production to
consumption) in a timely fashion´

ô


There are five basic components of SCM which are as follows:

c   
c  
c  
c • 
 
c  

ùhere planning is required to full fill the customer demand and in order to monitor the
supply chain so that it is cost effective and good quality for customers. Sourcing is all about
choosing the right supplier, pricing, delivery and payment processes. Production is a
manufacturing step by using the raw material from the supplier in order to produce for the
customer. Transportation or delivery process is done when the finished product is ready to be
delivered. ùe make sure that the most efficient method to be used in the shipment
department and set up the invoicing system to receive payments. And lastly supply chain
manager have to plan return goods policy about the products which are defectives or having
other problems. This can be very annoying part of supply chain for many companies but I
think as a supply chain planner one has to be flexible deal with these kind of things.

Ô

Supply chain management focus on three levels of activities which is done by different parts
of organizations, which are as follows
c

1. Strategic
2. Tactical
3. Operational

Strategic level is the highest level for making the decision concerning the whole organization
such as location, products, sales market and product to be manufactured.

Tactical level for SCM is to make tactical decision like cost effective measures, industry best
practice, and developing warehousing strategies in order to reduce the cost of inventory.

Operational level deals with day to day decision in the businesslike moving products in the
warehouse and taking orders from the customers.



It is a well known concept that term of logistics is of military origin. That¶s why military
logistics study may help in understanding the concept of Supply chain management. Now this
has been realized by many organizations the importance of the SCM. And every organization
is using its concept according to their need and objectives.

Now we try to understand armed forces logistic procedure like fire power communications
and mobility where we need logistics as we use the logistic in armed forces in order to
accomplish different strategy like mobility dispersion economy feasibility and continuity and
time lines. The basic military concept is to ensure supply and services at right time and right
place and to right user in a cost effective way.

The logistic function of British army in 1993, is based on three type of structure

(1) Combat support

The British army supply services under one head. And this is their new reorganization in
the armed forces as they use to be under different heads like royal services and transport
corps, pioneer corps and postal and courier services e t c .

Now we come back to conventional concept of logistic like in a business environment it can
be suggested that market forecast and development of industrial process and procurement of
raw material for production process. The key points of logistic are quality control, packaging,
transportation and distribution.

The key logistics functions are material management, physical distribution, and production
control. And these functions consists of many other minor functions like material
management includes purchasing and inspection, physical distribution includes
transportation, warehousing, distribution network, requirement, and costs. And production
control function includes, input/output control, production cost, and production performance.
c

All these functions of Supply chain management are inter related to each other and they are in
a kind of chain as it starts with the order take place and then the processing of the raw
material in to the finished products or the component and then it follow up by the physical
distribution processes up to the retailer. And in production control function we also have to
forecast the production and sales, aggregate plan and producing inventory.

The basic aim of the logistics is to achieve the customer satisfaction and their confidence
which is in the best interest of the organization. In order to achieve this we need to use
effective way of logistics procedures.

The following out line shows the relationship between the different developing processes of
supply chain management. It shows the movement of goods, information flow, transfer of the
title and the purchase and sale.


c



Ô


As we discussed above the objectives and the concept of logistics. where we extend from the
raw material source via distribution and production functions to the consumption of the
product or services. As we know the aim of all that activity is to satisfy customer requirement
on the minimum cost. And in the past, this cost was only considered as the monetary means.

The Green logistics concerns with the external cost of logistics effecting climate,
society, and economy. And mainly climate change effecting environment and so as society
and economy. Green supply chain management is actually the same concept of logistics but
in this case it also concern with the environment. For example in the industrial world where it
affects the eco system but in the industrial ecology we have to consider environmental
management which concern with the minimum damage to the environment.

Green logistics is the combination of environmental and the supply chain management,
it tends to understand the disproportionate of the environmental, economical and social
impact on the supply chain processes of the organization.

ô

The use of green SCM can be very beneficial in many ways first of all we can increase
efficiency and that can give the economical benefits. This can be done by reducing waste
materials and so the companies can reduce their cost on the handling charges and other inputs
on the cost. This can also benefit the efficient production and companies can generate more
revenue as the less cost on the product and that can lead to the competitive advantage for the
organizations.

Another benefit for using Green SCM is efficient quality control on the product quality.
This can be achieving by the public private partnership which helps to maintain the
relationship between the suppliers and buyers. And another impact of Green SCM focuses
mainly on the environment which combines all the chain of logistics from manufacturing and
supply to the distribution and consumption to achieve the environmental goals.

The most affective benefit of the Green SCM is improved public image and that helps the
organization in many ways it is also use as a marketing tool so many customers will respond
positively. Reputation of the good environment not only attracts customer but investors and
employers toward the company.


c


   


I chose Tesco plc for this case study as I worked in Tesco for 2 years so I can implement the
theory of Supply Chain Management more efficiently.

Tesco is using the different green logistics strategies on a very operational level. Tesco green
is running nationwide ³Green Campaign´. Following are the detailed Green Tesco future
strategy and the benefits earned by implementing Green Environment;

The success of the first zero-carbon of the world carbon free store in Cambridgeshire and
Ramsay, Tesco opened new stores around whole of the UK and are planning to go for more
in near future. And until 2050 Tesco¶s is aiming to become a zero carbon business. Zero
carbon stores uses as little energy as possible and it put back the energy in to the national
grid. This designed to keep the environment in mind and there are the numbers of different
features such as follows:
1. Timber frames selected from Sustainably source
2. Sun pipes and Roof lights to get natural daylight into sales floor and staff area
3. Rainwater collection to flush toilets and for the carwash
4. A Combined Heat and Power (CHP) plant to generate electricity using renewable fuel
5. LED-flitted car parks
6. Solar-powered lights

Tesco stores also used other strategies in order to minimise packaging and environmental
friendly too, which is Tesco recycled bags and ³Bags for life´ scheme. ùhere Tesco uses
recycled bags and give this opportunity to the customer to use the same bag again and earn
green points in to their club card. And there is another bag available for 10p only and that
bag is for life as customer can bring the old bag again and replace for the new one. This
helped a lot to reduce packaging and cost on it. And also it helps protect the environment.

The director of supply chain management of Tesco Mr. Neil Ashworth also took number
of step in order to reduce transportation factor. So in order to reduce the fuel factor Tesco
introduced the Tesco direct an online shopping experience. And also inputting in to the
evolution of existing tesco.com businesses.

Tesco fuel had experienced difficulties, which comprises 430 filling stations around UK, with
its past arrangements such as the cost effectiveness of delivery arrangements and sourcing
and fuel availability. Because of its high and consistent performance.
Then TDG has taken over logistics and distribution of all Tesco¶s UK filling stations.
ùho delivered practical solutions like efficient and operational management, engineers, taco
graph analysts, night crews. TDG fuel tankers are on standby in case of additional
requirement during the busy time. As TDG ensures that availability of fuel and meet the
customer requirement and also protecting the brand of Tesco.



c



In order to design the sustainable or green logistics in to the organization we should be able
to define the system and its components which need to be measured. Then we need to find
out the functional requirement which has to be quantitatively measured. As there are
functional components of logistics like transportation, warehousing or sourcing, reverse
logistics etc. As we have discussed all the components such as transportation function which
is responsible for the delivery process and is done when the product is ready to deliver so in
order to do it efficiently and sustainably we should be able to adapt the efficient method of
shipment which not only cost effective but also environmental friendly.

ùe can achieve the green logistics by implementing sustainable strategies in all the levels of
logistics which are strategic, tactical and operational. Just like few examples I have given in
the case study of Tesco. ùhere Tesco has adapted the public private partnership strategy in
order to achieve the sustainable logistics and that also benefited Tesco as they were facing
problem regarding cost effectiveness and delivery problems etc because of their previous
arrangement. And just like that many strategies in operational levels like green campaigns
and reduction of shopping bags by giving incentives to the customers such as bags for life
etc. And also creating the zero carbon stores by using day light in to stores etc.



S.K. Bhattacharyya (2000, 2008) Logistics Management, Definition, Dimension and
Functional Application.

Pervaiz K. Ahmed and Charles D. Shepherd(2010) Innovative Management, Context,

TDG Tesco fuels for case study[online] available at http://www.tdg.eu.com/tesco-fuels.asp

Supply chain director of Tesco for case study (online) at