Question

What are the pertinent sustainability issues in the context of logistics and SCM? (provide five issues 50% and explain them 50%)

Answer 1

Ans. Logistic and supply chain management sustainability is about business issue affecting an organization's supply chain or logistics network in terms of environmental, risk, and waste costs. There is a growing need for integrating environmentally sound choices into supply management. A sustainable supply chain seizes value creation opportunities and other Significant competitive advantage for early adopters and process innovators.

The pertinent sustainability issues in the context of logistics and SCM are as follows -

1. Customer service -

SCM and logistics management is all about providing the right product in the right quantity to the right place at the right time. Customers want full transperacy into where their delivery is at all times. In today's time, the whereabouts of a customer's shipment is as interconnected as your social network. And also customer expectations have increased, their willingness for fast shipping has decreased, with just about 64% of consumers unwilling to pay anything extra for less than two-day shipping.

2. Transportation cost control -

One of the highest costs contributing to the 'cutting transportation cost' concern is fuel prices. Higher fuel prices are likely to increase cost of transportation for U.S shippers this year by pushing up fuel surcharges. Rising U.S diesel fuel prices are escalating surcharges added to freight rates, which is reversing two year trend that cut into revenue and earnings of trcukers as fuel prices plummeted. This also affect logistics and SCM.

3. Planning and risk management -

In order to stay as efficient and effective as possible, periodic assessment and redesign of each business sector are necessary. This adjustment are put in place in response to changes in the market, such as new product launches, global sourcing, credit availability and the protection of intellectual property. This risk must be identified and quantified in order to control and moderate logistics and supply chain management.

4. Supplier relationship -

It is important to create, understand and follow mutually agreed upon standards to better understand not only current performance, but also opportunities for improvement. Having two different methods for communicating and measuring performance and results waste time and effort. This affect logistics and supply chain management.

5. Government and environmental regulations -

Carriers face significant compliance regulations imposed by federal, state and local authorities. As well as Federal regulations, environmental issues such as the anti-idiling and other emissions reduction regulation brought about state and local government has created concern that the compliance costs could exceed their benefits.