Logistics Planning and System Design
Logistics Planning and System Design
Logistics Planning and System Design
Subway, a quick server restaurant, made many attempts to become the best in the quick servers business. Its efforts aimed at greening the supply chain have fallen in line with its strategic objectives. The company has a motto, “Eat Fresh,” which ensures its customers obtain quality produce. Freshness of the produce is important as it also yields the best green approach. Procuring or obtaining produce locally has many benefits among them being superior quality available to customers. Procuring things locally also requires minimum transport due to the shortened distance as opposed to procuring in a foreign area far from the business premises. There is also less handling and subsequently less energy involved in purchasing locally. The produce carrier does not handle the produce for a long time. The idea here is that goods change hands faster than they would if purchased from elsewhere. Subway has a long-term goal to reduce the carbon dioxide emissions by 25%. The company believes results will be positive once it broadens its number of local suppliers, creating a big supply chain.
The company is making significant steps to create franchises in other areas. Recently, Subway managed to convince bakeries such as Southwest Baking and Otis Spunkmeyer to start bakery production in South Carolina, Texas and Arizona. This move has rapidly reduced the costs of shipping in the transport division where previously incurred expenditure was heavy and abnormal. Purchasing locally remains important for reserving energy, conserving resources, reducing waste products, and food safety (O’Reilly, 2012).
It has now become a necessity for many firms in the industry to operate in a green environment. Recently in the United States, the President Obama announced his plans to start trade permitting eco friendly organizations to swap carbon waste for economic gain with other companies. The policy stated is in action, in European states such as France, Germany and England. The Chicago Climate Exchange, which is available and active in the United States of America, is a smaller and voluntary version of the exchange.
‘Green’ is a big step for firms to enhance their economic performance and supplier relations. For instance, Wal-Mart pledged its commitment to renewable energy by announcing it would purchase all its energy from it. Renewable energy is the energy for all its transactions and processes, including stores. Sources such as wind create no waste and trade goods that support the external environment. In areas such as Bentonville US, light for each parking lot is run by a connected windmill. Such recent innovations affect the environment positively by reducing costs significantly.
Subway need to insist more into the providers manufacturing footprints for energy consumption or use and waste on some of the components making up its final product. To reach this strategy the organization must refresh and think of new ways of logistics and procurement because the firm sources and transports all components it trades. It is crucial for organizations to go by what they can measure and activate. For instance, firms in the transport or distribution industry will have the most returns because reduced costs of transport bring in more profits. Sources reveal that in the United States transport accounts for 29 percent of the carbon output and 70 percent of petroleum usage.
Subway needs to start tracing its carbon emissions in the supply chain. The firm must also decide where to start, whether it is the provider selling produce, the growers of the produce, and the producer of the seeds. When the baseline results are received, the strategy pushes the raw materials into decreasing hazardous waste associated with the supply process. Before improvements are considered, Subway must first define its energy consumption and the forms of energy it uses, as different sources of energy emit different waste products. Calculating truckload emission is detrimental though easy, as the state gives predicted mileage standards on each make of truck in the road transport industry (Fitzgerald, Brown & Stewart, 2009).
The third strategy entails defining the supply chain structure. From 2006, the firm’s supply chain management remodel and transaction efficiency saved in excess of nine million truck miles, 1.6 million in gallons of fuel and almost 17,000 shipments every year. By defining, the supply chain structure it becomes easier for the organization to perform tasks and the job is completed faster than before. When making the decision, carbon modeling has to be included as companies today embrace the efficiency efforts, which are reducing the emissions. Green strategies need transformation to become real. First, the supply chain needs management. The supply chain is managed by collaborating with the suppliers and other areas. This goes a long way in enhancing the supply chain in general.
Subway organization’s logistics plan is important to both the food industry and other industries in the production of goods and services. When industries in the food sector attempt to increase efficiency using actions such as localizing of suppliers, the move brings about many advantages such as reduced transport costs, fresh produce, and reduction in carbon emissions. Sources indicate savings in excess of 9.3 million truck miles, 1.6 million gallons of diesel and reduction of 277,000 barrels of oil consumed across the supply chain. Food sector firms need to improve relations with suppliers to create good working conditions with them. Increased commitment to suppliers significantly affects the environment and most importantly reduces costs incurred resulting in more profits (Duff-Riddell, 2000).
Industries outside the food sector can gain from Subway’s logistics plan. Procuring raw materials from local suppliers in the furniture sector reduces oil costs for the distributors; carbon emissions also reduce significantly, which is positive for the environment. Improved relations with suppliers enhance work relations between the traders. Both parties benefit in terms of reduced costs in operation, which ultimately leads to profits. Previous strategies, which could not work efficiently, need to be revised, and changes made on them to work more efficiently. Companies may have to relocate some of their functional areas to a location that may suit all its operations and enhance productivity.
Duff-Riddell, W. R. (2000). Strategic logistics management principles in urban transit. Urban Transportation and Environment.
Fitzgerald, T., Brown, T., Stewart, E. (2009, April). Subway’s Journey to Green. Logistics management, 48, 4.
O’Reilly, J. (2012, January 01). Restaurant logistics: Serving up the perfect meal. Inbound Logistics, 32, 8.
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