Green Logistics Initiatives by Toyota Australia

This report analyzes the green logistics initiatives undertaken by Toyota Australia and proposes recommendations for further improvement. It discusses the purpose, methodology, findings, research limitations, practical implications, and originality of the study.

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Structured Synopsis
Purpose
The purpose of this report is to analyze the green Logistics initiatives undertaken by Toyota
Australia and analyzing them in consultation with the Senior Logistics Executive of the
company. The current green logistics and supply chain management practices adopted by
Toyota Australia are assessed in the paper and some changes are proposed in the form of
recommendations for further improving these practices of the company.
Methodology
This paper follows a desk research methodology by making use of secondary data for
carrying out an extensive literature review on the green practices of Toyota Australia and
other automobile organizations to carry out a comparative analysis. The desk research is the
standalone research technique used for this study that gathers the information that it has been
collected through primary research by the other studies.
Findings
It is concluded that Toyota Australia is taking all measures for developing and adopting green
supply chain management practices and the organization is succeeding at it. Toyota Australia
practices sustainable Sourcing by making a conscious choice of the raw materials on the basis
of their type and the regions from which they are sourced. The green manufacturing practices
adopted by the company are focused towards reducing the energy consumption and make use
of the techniques and latest technology for reducing the waste produced by them.
Research limitations
The automobile industry involves various Complex interrelationships that are difficult to
study from the existing literature. Due to the limited availability of time and resources, this
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research does not make use of primary data and the findings and conclusions drawn for the
study only based on the secondary information gathered from the various academic and non-
academic sources. Therefore, the findings of this report cannot be generalized for any other
automobile organization for the organizations operating in any other region. The findings,
conclusions and recommendations are only restricted to Toyota Australia.
Practical implications
Green supply chain and logistics management is the need of the hour as the incremental
increase in the pollution levels, global warming and the detrimental impact of the
manufacturing companies on the environment have pushed the planet to its limits. It is time to
take measures for preserving the ecosystem and green logistics management can prove to be
an excellent starting point for the entities. Therefore, this study presents practical implications
for the automobile industries by providing them an understanding of the best practices
followed by the industry leaders that can be replicated to improve their economic and social
performance in the long run.
Originality
There are various studies that have analyzed the green logistics and supply chain
management practices for the automobile industry but none of these has specifically focused
on Toyota Australia. This study will fill this gap in the literature and contribute to the specific
understanding of green logistics initiatives run by the company.
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Contents
Structured Synopsis....................................................................................................................1
Purpose...................................................................................................................................1
Methodology...........................................................................................................................1
Findings..................................................................................................................................1
Research limitations...............................................................................................................1
Practical implications.............................................................................................................2
Originality...............................................................................................................................2
Contents......................................................................................................................................3
Introduction................................................................................................................................4
Details of current green initiative audit of company operations................................................6
Methodology of study..............................................................................................................10
Discussion of company strategy on green initiatives...............................................................10
Conclusion and future research agenda....................................................................................15
References................................................................................................................................17
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Introduction
The possibilities with globalization and the advancement in technology have enabled the
organizations to outsource the operations and the network of the suppliers, distributors,
logistics and transportation providers for the companies have become even more complex and
widespread. Because of this, the organizations often face sustainability issues and it has given
rise to the need to analyze the interaction between sustainability and supply chain by the
organizations if they wish to stay competitive in the market. At the conceptual level,
sustainability can be defined as the ability of the organization to meet their present needs
without compromising the ability of the future generation to meet their needs. Sustainability
at the organizational level gets various meanings and implications that include environmental
management, corporate social responsibility and business ethics. There is a lot of
development in the sustainability domain for the business organizations throughout the world
and it has become worthwhile for the researchers analyzing the supply chain management
and the logisticians to assess the impact that their operations have on environmental
sustainability the firm (Toyota Motor Corporation, 2015).
The focus on sustainability in the supply chain management and logistics management of the
company has resulted in organizations working towards coming up with green logistics for
the sustainable supply chain management practices. The central Idea behind green logistics
and sustainable supply chain management is to ensure that the organization is able to obtain
long term viability and continue to operate profitably while contributing towards the future of
the welding of the larger society. There are three aspects of sustainability: Economic,
environmental and social. It is important organizations consider all these aspects when
conducting the research in the field of sustainability and link the social aspects with the
environmental and economic aspects to address the complex and challenging problem that
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has where is different decision variables, constraints and parameters (Zyl, Nagata, & Schlicht,
2016).
This report is compiled in consultation with the Senior Logistic Executive of Toyota
Australia to carry out an audit of the green logistics initiatives undertaken by the organization
throughout the supply chain from the manufacturing, warehousing, transportation of goods,
technology applications and environmental standards definition. This report will also carry
out the assessment of the pressure faced by Toyota Australia from their customers and
stakeholders for the development and adoption of the green initiatives and a comparative
analysis of the current green practices of the organization as compared to the proposed
changes by providing recommendations. The organizations throughout the world have
realized that embracing green supply chain management practices can help in creating values
for their activities and operations in the long run. However, the process of moving from the
classic customer-supplier relationship model between them and the society towards the
models that are internally and externally more collaborative requires a lot of efforts (Leroy,
2013).
Toyota Australia has taken a number of measures to embrace sustainable logistics as a
concept and is making use of it as a part of their supply chain strategies. As the stakeholders
become more informed, the organizations cannot simply claim to make green efforts to gain
acceptance and we uploaded in the marketplace. The organizations now have to undertake a
formal process to approach sustainability and develop ways that make an actual impact by
making sustainability of part of all the business activities. Toyota Australia carries out a
careful study of all the logistics operations to choose the most efficient methods that are
environmentally responsible. This study presents the green initiatives adopted by Toyota
Australia for the logistics management for coming up with recommendations that enable the
organization to move further towards attaining environmental excellence and striking a
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balance between the economic and environmental interests of the business. The convergence
of the economic and environmental interests Australia and the commitment towards the
development of a green supply chain will not only project the company as a socially
responsible entity but also equipped them with the ability to meet the challenges in the
globalized and increasingly aware marketplace.
Details of current green initiative audit of company operations
The production systems throughout the world are working towards attaining environmental
excellence through their operations. The organisations have realised the need to establish a
connection between bring about improvement in the processes and operational efficiency of
the company and the subsequent benefits received in the environmental performance of the
entity. The green logistics management practices provide various benefits to the organisation
including improvement in the processes, reduction in quality issues, removal of the toxic
materials, reduction in waste production, the need of less packaging and innovation that are
environmentally sound. The thoughtful considerations by the business organisations have
contributed to various product innovations like the recyclable disposable camera developed
by Kodak, the completely recyclable automobile produced by BMW and the innovative
vehicles that reduce fuel consumption by Toyota (Bielecki & Galinska, 2017). This study is
compiled to analyse the initiatives taken by Toyota Australia to achieve greater cost-saving
while meeting the environmental and social responsibility targets. Toyota Australia is
constantly working towards developing new products that have smaller ecological footprints
and this has led to embracing the green supply chain and logistics concept as an effective
mechanism for reducing the operational risk and waste production enhancing the record of
the organisation on fulfilling their corporate social responsibility while improving the
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response time of the supply chain to any changes in the environmental regulations (Lee &
Wu, 2017).
Toyota is known for environmental commitment and your organisation regularly measures its
carbon footprint and releases an annual sustainability report. It is believed that the green
actions taken by the organisation also support the company operations economically and
ensure that the uncertainties in the external environment do not have any braking effect on
the already planned or the ongoing operations of the company. The sustainable value
innovation is at the centre of green logistics and strategy development for Australia. It helps
in balancing the economic cost, environmental impact, value creation for the customers and
the way the organisation contributes to the society (Manjunath, 2014).
(Jain & Sharma, 2016)
Toyota Australia is a wonderful example of green Logistics adoption. Toyota believes that
logistics is an area that has a significant impact on the performance of the entire supply chain
and it has serious implications on the environmental impact of the organisation as well.
Therefore, Toyota Australia carefully studies all the logistics options for the company and
selects the method that is the most efficient and environmentally responsible. The company
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make efficient use of the resources and logistics materials and the logistics of the company
are classified into three separate operations:
 Production parts logistics
 Vehicle Logistics
 Service parts and accessories Logistics
The production parts logistics for Toyota Australia in valves the collection and distribution of
parts required by the organisation from the suppliers to the manufacturing plants operated by
Toyota. Vehicle Logistics involves the import and export of the vehicles produced by the
company and any customizations required in the individual orders placed. The service parts
and accessories logistics for Toyota Australia covers the distribution of the spare parts and
accessories produced by the company to the retailers located throughout Australia and other
international markets. Toyota Australia has taken up environmental actions embracing green
Logistics and for the convergence of the economic and environmental interest. The green
supply chain and logistics management practices of the organisation are proving to be an
excellent economic leveller (Donval, 2011).
The green logistics approach of Toyota Australia is divided into the sustainable logistics
management and sustainable retailers. Toyota Australia is working towards reducing the
absolute carbon dioxide emissions by the organisational processes throughout the entire
vehicle logistics network by taking measurable steps. Toyota Australia has also introduced
the concept of Sustainable retailers that enables the organisation to achieve and
environmental performance that is an example for the industry. The company has been using
this system since 2007 and the mission of the green logistics system of Toyota is to provide
environmentally friendly products by focusing on developing innovative technologies in the
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automotive sector and contributing to the convergence of sustainability and mobility
(Sharma, 2017).
The sustainable logistics management practices of Toyota have contributed to the increase in
the operational efficiency of the company and their environmental sustainability. Toyota
Australia has incorporated the green manufacturing and remanufacturing process that
involves a reduction in environmental pressure by making use of the appropriate technology
and material for manufacturing the automobiles. Remanufacturing is the manufacturing
process that integrates recycling as the process of obtaining and finished goods and raw
materials and reusing them for reducing the waste tremendously. Toyota Australia follows
reverse Logistics which is the process of planning, implementation and control of efficient
and cost-effective processes for handling the unprocessed material, latest Inventory of the
organisation and the finished goods with the help of related information gathered by the
organisation from the point of origin the point of consumption of the product so that they are
able to carefully recapture their value and practice proper disposal. The waste management
at Toyota Australia is targeted towards reducing the generation of harmful waste and
chemically poisonous materials that are generated by the company during their operations all
processes. Instead of coming up with ways for managing the waste later, the organisation puts
conscious efforts towards waste prevention (Lin, Chen, & Nguyen, 2011).
Methodology of study
This is a secondary research that involves making use of the information that already exists
and analysing it by making use of process friendship and collation. The desk research is the
standalone research technique used for this study that gathers the information that it has been
collected through primary research by the other studies. This is an academic study due to the
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limited availability of time and resources; desk research is the most suitable technique to gain
access to low cost, easy and quick knowledge. This research technique helps in aligning the
focus of the various primary studies at a larger scale and also rule out the potentially relevant
information on the topic. The external secondary data comprises of the information that is
gathered outside the firm of the researcher. This study makes use of the secondary research
methodology by identifying the subject for acquiring the necessary information, gathering the
existing data on related topics and organisations, carrying out comparison and assessment of
the information collected from different sources and data analysis for fulfilling the research
objective and reaching a conclusion (Pejić, Lerher, & Lisec, 2016).
The secondary data for the research has been collected from various previously published
academic and non-academic sources of literature. These include the journals, articles,
researches, industry reports, government reports, magazines, websites and studies conducted
on the topic of green logistics. Most of the information has been obtained through the internet
sources.
Discussion of company strategy on green initiatives
Green supply chain and logistics management is no longer an ocean but a lot of organisations
throughout the world have adopted it by developing best practices in reducing their carbon
emission and optimising the supply chain to minimise the environmental impact of their
operations. In the competitive world, the organisations are making use of this strategy to gain
a competitive edge and improve their efficiencies and profits. Traditionally the process of
supply chain management was only focused on sourcing the raw material and converting
them into final products that were delivered to the end customers. However, with the increase
in the consciousness about environmental sustainability, the organisations throughout the
world are coming up with ways to add the green component to the supply chain practices.
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The chart below represents the classification of various green supply chain management
practices in the automobile industry (Jain & Sharma, 2016).
(Srivastava, 2009)
The green design is an ecological design practice that helps the organisation in demonstrating
environmental awareness and to reduce the negative impact of their operations by integrating
themselves with the living process. Green designing is also targeted towards emphasizing on
the ecological equilibrium between people and nature and takes into account all the
Environmental effects that can be taken for minimising the damage in the designing process
for the automobiles. Green operations can be defined as all the processes or operations of the
company that help in the reduction or elimination of the ecological materials or information
and contribute to the preservation of the ecosystem.
Toyota Australia makes use of a combination both these practices and it was one of the first
movers to innovate and develop the hybrid and electric cars at a mass level. This is an
environmentally conscious design which takes the social and technological aspects of
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designing, synthesis, processing and product use to optimise them with the goal of
minimising the detrimental impact that the product has on the environment throughout its life
cycle. The green supply chain management initiatives adopted by Toyota Australia as
compared to the other major automobile organisations is compared and contrasted in the table
below. The given table represents the application of green supply chain management
practices by the various automobile companies (Niwa, 2009).
(Sanghavi, et al., 2015)
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Toyota Australia has incorporated green logistics and supply chain management practices
throughout their operational functions. This begins with green designing by anticipatory the
environmental footprint of the potential product being designed by the company during the
development stage. Toyota has taken the path of eco-design to ensure that the automobile
designed by them does not just meet the requirements of the customers while ensuring
compliance with the laws but also contributes to improving the brand image and projects
Toyota as a green environmentally conscious company by optimising their recycling
capabilities. Toyota practices sustainable procurement by respecting the work conditions and
practising non-discrimination reinforcing the environmental requirements to all their
suppliers. This not only contributes to better compliance for the company with the existing
norms but also helps in improving the ranking of the entity for the non-financial rating
organisations while encouraging suppliers to consume fewer raw materials and control their
emissions (Nunes & Bennett, 2010).
Toyota has been the flag bearer of lean manufacturing since the 1980s and this has enabled
the organisation to cut cost by reducing all kinds of waste produced by them and make use of
minimum possible resources. Although the initial focus of these practices was to obtain
operational efficiencies, the lean practices are not promoted throughout Toyota as an
environmental necessity along with being financially significant. The sustainability report
released by the company annually present the details of their carbon footprint and your
organisation regularly sets realistic reduction goals for reducing resource consumption and
waste disposal methods.
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Conclusion and future research agenda
It can be concluded that Toyota Australia is taking all measures for developing and adopting
green supply chain management practices and the organization is succeeding at it. Toyota
Australia practices sustainable Sourcing by making a conscious choice of the raw materials
on the basis of their type and the regions from which they are sourced. The green
manufacturing practices adopted by the company are focused towards reducing the energy
consumption and make use of the techniques and latest technology for reducing the waste
produced by them. Green logistics is especially emphasized by the company to address the
business objectives as well as the environmental needs for promoting sustainable
development (Toyota Corporation, 2018). All these practices have become integrated into the
decision processes and business thinking of Toyota Australia making the organization and
excellent representatives of the green initiative within Australia and internationally. Green
supply chain and logistics management is the need of the hour as the incremental increase in
the pollution levels, global warming and the detrimental impact of the manufacturing
companies on the environment have pushed the planet to its limits. It is time to take measures
for preserving the ecosystem and green logistics management can prove to be an excellent
starting point for the entities.
This analysis perceives importance of creating a plan to practice sustainability inside
companies. The most important strategy is logistics process because it includes all the aspects
which are involved in sustainable care, production, operation, distribution and delivery to the
final customer (Sanchez-Rodrigues, 2016). The automobile industry is the biggest
manufacturing sector throughout the world and it is important that the organizations operating
in the sector take conscious efforts to embrace the green initiatives and implement them
throughout their operations. The implementation of green logistics by the automobile
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companies is not as easy as it sounds because of the inherently Complex production process
and the various technological, economic and social obstructions faced by the companies with
this implementation. There is a need for further research on this topic to analyze the impact of
the factors like the lack of IT infrastructure, continued use of dated manufacturing techniques
and poor human resource quality. It is also important that the government extends support to
the organizations to provide the necessary boost to these initiatives started to buy Toyota
Australia.
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References
Bielecki, M. & Galinska, B. (2017) Total logistics management concept and principles in
manufacturing enterprise.
Donval, Y. (2011) Green supply chain: from awareness to action.
Jain, V. & Sharma, S., 2016. Green Supply Chain Management Practices in Automobile
Industry: An Empirical Study.
Lee, K. & Wu, Y. (2017) Integrating Sustainability Performance Measurement into Logistics
and Supply Networks: a Multi-Methodological Approach.
Leroy, D. (2013) Toyota Motor Europe: Emissions.
Lin, R., Chen, R. & Nguyen, T. (2011) Green supply chain management performance in
automobile manufacturing industry under uncertainty. Social and Behavioral Sciences,
Volume 25, p. 233–245.
Manjunath, G. (2014) Green Logistics: A Learn, Evaluation And Initiatives In Business
Organizations. 1(7).
Niwa, K. (2009) Fujitsu Activities for Green Logistics, 45(1), pp. 28-32
Nunes, B. & Bennett, D. (2010) Green ops in the automotive industry. 33(6), pp. 1-4.
Pejić, V., Lerher, T. & Lisec, A. (2016) Lean and Green Paradigms in Logistics: Review of
Published Research. 28(6).
Sanchez-Rodrigues, V. (2016) Supply Chain Management, Transport and the Environment-
A Review.
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Sanghavi, P., Rana, Y., Shenoy, S. & Yadav, R. (2015) A Review onGreen Supply Chain
Management in Automobile Industry. International Journal of Current Engineering and
Technology, 5(6), pp. 3697-3702.
Sharma, S. (2017) Green Supply Chain Management Practices in Automobile Industry: An
Empirical Study.
Srivastava, S. (2009) Green supply‐chain management: A state‐of‐the‐art literature review.
9(1), pp. 53-80.
Toyota Corporation (2018) Toyota Boshoku: Green Purchasing Guidelines, pp. 1-17
Toyota Motor Corporation (2015) Respect for the Planet —Toyota's Environmental
Initiatives, pp. 1-46
Zyl, J., Nagata, M. & Schlicht, K. (2016) Sustainable Purchasing Guidelines: Toyota Motor
Europe, pp. 1-29.
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