Klaus Krumme: Sustainable business – Logistics in change, change through logistics?

luftbild3-2(4c)-kopieren

Taking responsibility for future generations is a fundamental building block of industrial processes in Europe. This is why at the University of Duisburg-Essen, researchers address sustainability in logistics.

Logistics as both problem and an opportunity. Logistics has developed into a determining factor within the globalised economy and carries out a variety of cross-sectional tasks in rendering industrial services: from iholistic planning, procurement and production, transport/distribution and storage through to assembly/finishing, after sales services as well as re-use and recycling. Logis­­tics is therefore both a driver of and driven by globalisation. The flow of materials and goods has a global impact, just like the climate change these flows contribute to. Climate change – in part no longer a reversible phenomenon, in part still a set of avoidable consequences – embodies the symptoms of an unsustainable economic system acting as a root cause of global environmental changes and thus of related social and demographic developments.

To stay on the topic of climate change: depending on the study used, greenhouse gas emissions stemming from the transport and logistics sector are found to range globally between 25 and 32%. Of this, about 35 to 40% is accounted for by the direct flow of goods and com­­modities, with a strong upward trend by way of global increases in freight transportation, which more than exceed efficiency gains made thus far. In order to achieve possible improvements, the effective amount of leverage here, nevertheless, should be greater: today’s modern logistical services configure a range of areas extending beyond the boundaries of trans­­port and integrate differentiated, very complex, globally extensive value creation networks. They are therefore – in both a positive and a negative sense – key elements in strategies for sustainable management.

++EC_20140616_227-kopieren

Logistics in change. All processes involved in logistics will increasingly become subject to necessary transformations. How can or must logistics change when costs and price conditions correct themselves due to the fact that social and environmental precautions become an indispensable element of modern business activities? What sort of design power does logistics itself possess? Or does it merely respond? Today “Green Logistics”, is a much discussed topic, and some answers addressing logistical systems – such as how we can modify transport or production environments to make them more socially and environmentally acceptable – are already at hand. What is a little-discussed issue is the potential of logisticians to make a valuable contribution to the fundamental transition process. Is a transition process turn­­ing Green Logistics into “a service provider for sustainable economic systems” just romantic wishful thinking, an actual possibility, or is it perhaps the only alternative in order to achieve progress for the entire system?

On their thousand kilometre long way to industrial or private consumers, even the simplest goods produce a considerable CO2 footprint and pass through a complex set of individual transfer points and along socially and environmentally questionable pathways. The damage these goods have caused at this point is not outweighed by their benefits, and it becomes increasingly clear that the very principles of economic activity need to be questioned. Trans­for­ma­tions will of course not cease in the face of raw material procurement, production, transport, trade and consump­­tion patterns. According to the American economic and political consultant Jeremy Rifkin, it is the transformations’ systemic context, namely the supply chain, which will become an integral factor in an industrial revolution, where logistics will assume a central role.

Transformative Logistics. Many of these challenges are already affecting competence domains of modern logis­­tics. They include, in addition to difficult adjustments, first and foremost the potential to broaden business models accordingly – to operationalise services “a sustainable economic system”, to confer a “sustainable” direction to essential integrated data and information streams – in a strategically targeted manner – and to consolidate ap­­pro­­priate infrastruc­­tural connections. Of course, all that being economically efficient and profitable, but also socially and envi­­ronmentally responsible within the system boundaries. Along the supply chain, parameters which are external to the company as well as legal, social and ecological parameters will be considered and thus long-term cost-traps and drivers of socio-economic and ecological risks will be indicated (Supply Chain Integrity).

FHIML_20140916_211-kopieren

The “sustainable system” in the economy and society acts as the most important driver of innovation in logistics, even more so than new technologies, because it indicates long-term development prospects. This system must be more than just efficient. It ought to be adaptable and thus stable in the long term. Research has established the concept of “resilience” for this purpose. If logistics develops its operating models rigorously, it has the capacity to operate resilient systems, to put future action rou­­tines in value networks into operation, and to design them in an adaptable and thus more stable way over the long term by using new infrastructure solutions and management in­­sights. It can therefore strengthen, enhance and stabilise its backbone function for the economy, particularly in the long term.

Logistics within the context of sustainable business ac­­quires and configures all necessary resources and ser­­vices for “sustainable” operational systems in business and society. So-called transformative logistics should be a core element for both logistics practice and logistics training. It illustrates, aside from that, prospects for applied systems science to both open itself to and network with a diverse range of disciplines: in addition to the technical, informational and economics skills, which are already combined in transformative logistics, it will to an increasing extent keep drawing upon environmental and social expertise, thus being able to develop groundbreaking opportunities.

mgtb-ssc2013-krumme-02-kopierenKlaus Krumme
The author studied environmental sciences, geography and biology at the universities of Bochum and Duisburg-Essen. In addition to other activities, Klaus Krumme is Director of the Centre for Logistics & Traffic at the University of Duisburg-Essen.