The economic and environmental impacts of transportation decisions : A multi-objective optimization

Abstract: Getinge AB is a global medical technology company. This master’s thesis is based on the outflow of capital equipments from Getinge’s factory in Växjö to four different sales and service units. The purpose of this thesis is to give Getinge a deeper insight of why the customers and the own organization do not know when they can expect their products. This makes most requests urgent and thus prohibits them from using the best environmental and cost efficient modes of transportation. Two sub-problems have been created in order to investigate this. Sub-problem 1 originates from an organizational perspective. The aim of this problem is to examine the possibilities to achieve less urgent transportations by improving the communication between sales and service units, factories and logistics services. This is evaluated based on semi-structured interviews containing both qualitative and quantitative questions with employees rep- resenting the different functions at the company. It appeared that different phrases, explaining the same thing, were used internally leading to confu- sion. Further, the different functions have harmonized follow-up sessions but do not share the information between each other. The resulting information vacuum creates trust issues and unnecessary time margins and buffers. Sub-problem 2 concerns the trade-off between the economic and environmen- tal impacts in relation to the Greenhouse Gas Protocol Scope 3. This trade- off is evaluated by a multi-objective optimization model, where emissions are priced based on the EU ETS market valuation. Current research argues that the choice of transportation mode is the simplest emissions abatement option in terms of implementation. This study indicates that it is possible for Getinge, in the short-term, to decrease costs and emissions by just chang- ing between current transportation modes. However, a long-term strategy should include evaluation of consolidations, alternative fuels and electrified vehicles since the cost of decreasing one kilogram of emissions by changing between current transportation modes will increase. Finally, increased transparency and communication between sales and ser- vice units, factory and logistics services could be achieved via a one point of contact solution. This could avoid unnecessary time margins and buffers and hence open up the possibility of better over all lead time utilization. This could make it easier to use more environmental friendly transportation modes and thus lower emissions and costs, while still satisfying the customers.