Influence of purchasing on sustainable logistics

 ‘Consider the way products are packed’

Purchasing can play a role in the way product are packed and entering the campus. And in that purchasing is not only influencing the last mile logistics to the campus but also indirectly the flows from the campus. 

 

Context and relevance

Sustainable city logistic should not only focus on products that are brought to a location but also which products are  leaving a location. There are many waste flows leaving the Heijendaal campus, one of them being packaging.  The way products are packed has an impact on the waste generated on the campus. This has not only consequences for the number of vehicles entering, being at, and leaving the campus, but also for the environmental impact via its production and disposal.

In this chapter we focus on the flow of packaging that is disposed and how the purchasing department and suppliers can make impact via changing the way product are packed on the last mile logistic.

 

Research question

How can purchasing decisions influence the amount of packaging waste and make the whole chain more sustainable?

Research approach/methodology

• literature research (using among others Science Direct, Google Scholar, …);
• case study Radboudumc; interviews-observations-measurements-data files
  • Radboudumc: actual users products, internal logistics department, purchasing department, environmental officer;
  • suppliers chilled and frozen medical products;
  • suppliers packaging, packaging solutions (incl. “no packaging”);
  • 3PLs (Third Party Logistics Service Providers)

Results

At the moment of purchasing there is a possibility to negotiate about the way products are packed.  Not every person who ordered is aware of the impact of packaging on the waste stream, the related logistics, and the possibility to negotiate. Choices can be made on the materials from which the packaging is made (e.g., allowing reuse as such or recycling of the packaging left), the take back of packaging by a supplier, delivery without packaging, and the aggregation level of the orders (time and place).

General
A number of alternatives to reduce the amount of packaging/environmental impact of packaging related to the supply of goods to the campus are given. Which alternative is, or can be, used, depends on many different things, incl. the product to be transported, the function of the packaging material, the supplier and the customer. (see for more; ‘Sustainable supply of goods from a packaging point of view’)

How much of which packaging is used depends among others on how products are packed and why they are packed this way. In this context it is important to distinguish between primary, secondary and tertiary packaging, where primary packaging is in direct contact with the product and the other two types of packaging are respectively for keeping units of the same or different products together to make their distribution easier and sometimes to guarantee conditions of goods. There are many software tools available to optimize the packing of products under all kinds of restrictions. Suppliers usually use only a very limited set of packaging to distribute  their products, e.g., only a few sizes of boxes, filling the space left with filling materials. But also extra/specific wishes/requirements of producers of products, customers, 3PLs, governments, recyclers, … strongly influence the quantity (and type) of packaging entering the campus.

Disposal of packaging
In case packaging can’t be avoided, it has to be decided what to do with removed packaging. 4 options were considered: reuse as such (e.g., reusing pallets as pallets), recycling (i.e., reuse of the materials content of packaging, e.g. reusing the plastic of plastic bottles instead of the bottles as such), incineration and landfill. In case of Radboudumc, landfill doesn’t take place. Which material is used for packaging has a big influence on possibilities for the way packaging is disposed, also we have seen that if for the kind of material there is already for example a recycling stream it’s easier to use this way of disposing. E.g. in case study cooled packing  of carton can with the recycle stream of carton, where for EPS the volume isn’t big enough and the requirements are bigger regarding the disposed material. This results in the decision of way of disposing is not only influenced by the packaging that is used, but also what each option requires from each of the different relevant stakeholders. E.g., in case of reuse as such, all stakeholders in direct contact with the packaging have to deal with it more carefully to allow reuse as such. Apart from this disposal decision, also the actual collection of leftover packaging has been considered, incl. space reduction by e.g., pressing, combined delivery-pickup, to further reduce the environmental impact of packaging and the traffic to/from the campus. Note that reuse as such and recycling of packaging may require separate storage and collection of the packaging, where the latter may mean extra flows to and from the campus. For the purchasing department it’s needed to concern all this things before making requirements to suppliers.

Aggregation of demand/supply of goods may be another option to reduce packaging. Also can aggregation open new possibilities for packaging, e.g., ”if the volume is big enough, reusable crates can be used”. Aggregation can be made over people ordering, departments ordering and also over organization ordering. There also a choice will it be done by the people ordering or by the purchasing department or at the supplier.

Aggregation may be limited due to storage space and shelf life restrictions, demand uncertainty. Aggregation of demand/supply may require extra effort of the different stakeholders within, and outside the 3 main organizations at the campus (e.g., disaggregation of supplies within the ordering organization). Another issue to concern is the administrative impact of ordering together and booking the order to a department/project. Each has his own budget and cost center.

 

Impact on goals living lab

Sustainability
Less packaging may mean less vehicles to and from the campus, which may result in less related emissions. Note that as mentioned above, reuse, recycling of packaging may require separate flows to/from campus. Less packaging may also result in a potential reduction of the environmental impact related to the production and distribution of the packaging itself.

Livability
The number of vehicles to and on campus may decrease because less volume has to be transported for the same product quantities. Reuse, recycling may involve extra flows when compared with incinerating all packaging. This depends among others on the possibilities to combine the delivery of products with the take back of leftover packaging, and the possibilities to combine the collection of different (packaging) waste streams.

Costs
The costs depend on the alternative considered, and may be different for the different stakeholders. E.g., supply aggregation may result in lower purchase costs (quantity discounts), but on the other hand may result in extra costs related to stock keeping, handling, and administration.

Service level
The service level (i.e., timely availability of products) doesn’t need to deteriorate. However aggregate ordering/supply means less flexibility, extra effort from stakeholders with respect to ordering, administration, internal distribution. Note that due to uncertain demand, emergency deliveries will continue to occur.

Conclusions and directions for further research

Conclusions
Purchasing can use a number of alternatives that may result in packaging reduction/and or reduction of the environmental footprint. Which alternative to choose, depends on many details. As always, what good is for one product-customer combination, may be bad for another product-customer combination. It is not always easy to estimate the organizational aspects, cost of each alternative for each stakeholder (no insight given by them).

The alternatives are based on reduction of packaging. It is very hard to estimate the overall environmental impact (LCA) for each alternative. At most, partial LCA’s are available (e.g. only for the actual production of EPS boxes out of EPS, excl. the production of EPS itself), where different LCA’s use among others different system boundaries, calculation methods.

Directions further research

• Estimation of the complete LCAs for the different alternatives;
• further elaboration/implementation of the different alternatives in practice.