It’s getting there now but for many years sustainability has simply been viewed as an additional business cost to factor into the automotive logistics. However, it’s more than just compliance and helping to reduce the environmental impact of a company; sustainability can drive supply chain efficiency. This is something both carmaker BMW and logistics provider DHL are pursuing.
The environmental impact of logistics is set to double by 2050, so it is vital that businesses continue to develop supply chain responsibility. Beyond the benefits to the planet (and, no doubt, corporate identity), developments in this direction also help to avoid damage, risk and congestion. They also reduce the cost of materials and enhance quality, according to Stefan Crets, executive director at CSR Europe, the European business network for social responsibility, who was speaking at this year’s Automotive Logistics Europe conference.
Ferdinand Geckeler, Programme Manager Sustainability in the Supplier Network, BMW.
Supply chain performance is important for logistics providers, suppliers and OEMs alike, and this is not just from a compliance perspective, but also in terms of innovation. Ferdinand Geckeler, programme manager for sustainability in the supplier network at BMW, said that the OEM is continually looking for improvement, and that sustainability would be an important driver for business in the coming years.
BMW has a ‘four pillar’ approach to manage sustainability according to Geckeler: sustainability risk management; participation in initiatives and networks; sustainability training; and developing principles and standards for the supplier network.
Naturally the OEM wants to ensure its standards are being upheld globally, so it continues to identify risks based on the BMW specific sustainability risk filter, and identifies and analyses high risk suppliers based on media screening. This media screening is becoming increasingly important to monitor the number of online media reports mentioning sustainability violations in the supply chain, according to Geckeler.
Further to that, Geckeler said that BMW has developed a range of other measures to uphold standards on sustainability. These included: an OEM-wide sustainability questionnaire; a BMW-specific module sustainability questionnaire; internal on-site visits to verify and develop supplier’s sustainability performance; and sustainability audits conducted by independent external auditors, with corrective action taken based on the results.
OEMs are now also focusing more on risk factors around the world, and this extends to suppliers. These could include issues such as CO2 emissions, water stress, discrimination, corruption, conflict minerals or child labour. One way of trying to establish where these risks are prevalent is the supplier questionnaire. While each OEM has its own questionnaire, Geckeler says it would make sense if the questionnaires were on the same platform, so could be used by everyone.
To improve its own efficiency, DHL hopes to improve CO2 figures by 30% by 2020, compared to its 2007 baseline, and run on a minimum of 60% green electricity. To work towards this, DHL preaches a mantra of ‘burn less, burn clean’, improving fleet performance through such measures as better aerodynamics, engine modification and powertrain – moving to hybrids, alternative fuels and electric vehicles. DHL is modernising its aircraft, developing efficient transport routes, and using alternative fuels, said Tlatli. In its buildings, the company is moving towards energy efficient lighting, and sourcing heating and electricity renewably.
Not only is it managing its own sustainability, but has also assumed responsibility for ensuring that all suppliers and subcontractors acknowledge DHL’s environmental and social standards.
However, as technology develops along sustainable lines, the challenges for logistics providers become greater. One example of this is electric vehicle battery logistics. It is important that temperature control is managed effectively to maintain battery performance and recharging capabilities. EV batteries fall under the ‘Class nine – miscellaneous dangerous goods’ section, which means that they are subject to numerous special provisions for transport on road, rail, air, and sea t. If any batteries are damaged, leaking, overheating or need specialist packaging, there are also additional restrictions in place.
While DHL is now adapting to changing technologies through its Formula E logistics planning, more developments are on the way, which will continue to test the resourcefulness of logistics providers, OEMs and suppliers to maintain and improve sustainable practice. Tlatli concluded by quoting Peter Drucker, the American management consultant: “The best way to predict the future, is to invent it.”