Efficiency in distribution : as a cost saver and environmental impact reducer

Abstract:   The environmental aspect of transportation has got a lot of attention over the past years. It has its origin in the growing awareness of environmental problems such as the global warming. Today the environmental aspect of transportation is widely discussed and is being recognized as a very important question to deal with for everyone involved. In Europe the transportation industry is responsible for 21 per cent of the total emission. While studies of the subject show that an environmental friendly supply chain is considered a success factor for many companies, there is a lack of interest from them to invest in order to obtain it. The question this dilemma raises is what a company can do in terms of reducing its impact on the environment without making big investments. The purpose of this thesis is to investigate how, from a company perspective, efficient logistics solutions for the distribution of products can reduce transportation costs as well as the environmental impact from a company. To gather data the authors will conduct a qualitative single case study in the form of interviews at a company to create the deep understanding needed to comprehend a company’s distribution system. The result of the analysis shows that areas considering fill rate and selection of transportation mode are findings that would increase the efficiency, which would reduce the cost of transportation and the environmental impact. Also benefits from the option to outsource the logistics function regarding the distribution of the product to a TPL have been found. The conclusion suggests that for a company to become as efficient as possible, while at the same time reduce their negative impact on the environment they should try to maximize the fill rate, which brings along that as much goods as possible is being distributed with as limited amounts of transportations as possible. Additional important conclusions from the thesis involve the significance of choosing the most suitable mode of transportation, something that will affect a range of different factors where cost and service are found to be the most important.