Kruger Products PL: Sustainable Logistics Management - Unit 07 Report

This report provides a comprehensive analysis of sustainable logistics management within Kruger Products PL, a tissue product manufacturer. It examines the company's approach to sustainable practices, highlighting its alignment with the United Nations Sustainable Development Goals. The report...Read More

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Sustainable Logistics Management in Kruger Products PL
By Student’s Name
Course
Professor
University
Date

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Abstract
Kruger Products PL. manufactures and distributes tissue products. While planning to
distribute its products to customers, sustainable logistic management is necessary to minimize
the impact emissions of green-house gases released into the atmosphere has on the environment.
A review of how the company has adopted sustainable logistics management revealed that the
company has embraced majority of practices in line with the United Nation Sustainable
Development Goals. The company leadership has placed sustainablility at the core of its logistics
operations, and this has led to drastic improvement in efficiency and innovations that have
enabled achievement of key milestones as far as sustainable logistics management is concerned.

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Introduction
The exchange of goods from retailers to consumers is evolving. Increasingly, more products are
transported further and e-commerce is evolving leading to a change in the traditional supply
chain. As a result, there is a need for consumer-packaged goods, companies and retailers to
come-up with ways of improving efficiency in the movement of goods to reduce environmental
impact and carbon-dioxide emissions (Yongrok Choi, 2012). This can only be achieved by
encouraging adoption of sustainable practices and policies. Historically, the main objective of
logistics was coordinating freight transport, storage and inventory management in the most
effective way to meet customers and consumer demands and minimize monetary costs (Amin
and Shahwan, 2020).
However, with the global-warming risks associated with the release of carbon products
while transporting goods, there is a need for logistic companies to embrace measures that
promotes environmental conservation (Bentahar and Benzidia, 2018). This case study reviews
how Kruger Products embrace sustainable logistic management on day-to-day activities and
evaluate whether the measures taken are effective or not.
Company Overview
Kruger Products is a Canadian company that operates in the manufacturing industry. The
main products are bathroom tissues, table tissues, paper towel, facial tissues and napkins. Goods
are distributed to various wholesalers and retailers in the country by the logistics department
after completion of the production process. In the context of sustainability logistics management,
the company launched its first sustainable development goal in 2009 (Sustainability, 2020). The
core goal was to minimize consumption of water and energy, reduction in emission of green-
house gases and adopting conservative mechanism to reduce volumes of packaging materials

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while archiving transportation efficiencies. With these goals at the heart of the company, Kruger
Products was deemed a good reference while evaluating sustainability in logistic management.
1.1 Critical assessment of various issues associated with sustainable logistics and the
transport of goods and services.
For logistic to be sustainable, transportation of goods and services should be done in such way
that the company achieves its objectives while using the available resources efficiently and with
minimal interference with the environment ((Rakovska, 2016). Goods should also be made
available to consumers at the right place, at the right time and at the right price (Jung, 2017). As
logistic companies strive to meet the customers’ demands in the most cost-effective way,
keeping the environment clean is almost impossible (Achahchah, 2018). Some of the issues
associated with sustainable logistics and the transportation of goods by Kruger products are as
enumerated below
Warehousing and storage: when goods are manufactured, they are put in the warehouse
awaiting delivery to the wholesalers. As a result, the cost of holding goods in the warehouse
should be kept as minimal as possible as it has a direct impact on other production processes.
The logistic department should ensure that goods leaves the warehouse at the scheduled time to
create room for new productions. Any delay in removal of goods from the warehouse would
occasion stoppage in productions as additional products may not be accommodated in the
warehouse. In addition, the delayed production means that the company would incur the cost on
idle labor hours and a possibility of a delay in processing of some customers order will be
inevitable.
Products such as bathroom tissues, facial tissue and napkins require packaging before
they are released from the production process to the market. Having the packaging materials

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available when required is an important aspect of logistics in Kruger Products company. In the
event that the packaging materials are few or unavailable, it means that the company will delay
in finalizing processing of orders. Such a delay will affect the entire logistic process as other
subsequent services such as warehousing and transportation will be delayed.
When packaging goods, there is a potential environment pollution that may arise as a
result of disposing unwanted cut-out. These wastes ought to be managed so that the company
does not concern itself on improving efficiency in other logistic processes while ignoring the
impact these wastes has on the environment.
During transportation of goods from the warehouses to retailers or wholesalers, Kruger
Products has to adopt an efficient process of delivering goods. In addition, the process should not
only cut on the cost but also be environmentally friendly. That being the case, the logistic
department should design a transportation module that minimizes the number of trucks required
to deliver products. Furthermore, drivers should be trained on the importance of minimizing fuel
consumption as a way of reducing the cost of carbon emission into the environment.
1.2 Differentiate between the Inbound and Outbound sustainable logistics
Inbound logistics refers to the process of sourcing, transport, storage and receipt of goods
from outside the business. The process mostly involves the acquisition of raw materials required
during the production process. On the other hand, outbound sustainable logistics refers to the
process of warehousing, packaging and transporting goods outside the business.
According to Wichaisri and Sopadang (2017), inbound logistic management entails
having a channel where suppliers provides raw materials for use in the company in the most
efficient way. Efficiency in this case means getting supply in advance such that no delay occurs
in the production due to the lateness in supply of raw materials. In order to make the delivery of

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raw materials process sustainable, a company should maintain economic order quantity (EOQ)
and economic order levels that aligns with its production needs (Silva et al., 2019).
Outbound sustainable logistics should be addressed by the logistics department in the
company. The board of directors should have an advanced understanding of the logistic needs of
a company to be able to guide the department on the most effective supply chain management
approach (Nilsson, 2006). Further, transportation and assignment quantitative models plays a
vital role in minimizing the transportation costs by providing the most cost-effective way of
assigning vehicles routes to deliver goods.
Jedliński, (2015) noted that vertical integration could promote efficiency in logistic
company. Vertical integration occurs when a company merges with its own customers and
consumers to increase efficiency in the logistic process. This approach introduces competitive
cost advantages as the supply chain is controlled from a single source for the three players
(supplier, manufacturer and consumer). When a supply chain is fully integrated, both inbound
and outbound logistics are synchronized and automated systems are used in ordering of materials
and requesting processing of new orders (Kleber, 2006). Resources such as trucks and drivers
can be shared when the supply-chain is integrated. This further increase efficiency in the supply-
chain system.
Inbound and out-bound logistic processes are synonymous in Kruger Products supply-
chain system. The company purchase raw materials used in the production process and transports
finished good to the wholesalers and retailers. Trucks used in delivery of finished goods could
also be used in carrying raw materials from the suppliers to the manufacturing plant if the
supplier operates from the same route that the truck delivered goods. This could minimize the
transportation cost and carbon emission into the atmosphere.

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1.3 Discuss how the Third-Party Logistics (3PL) differs from the Fourth Party Logistics.
Third party logistic providers do not own any assets while the fourth party own assets such as
trucks and warehouses (Golinska, n.d.). The third-party logistics concentrate in daily operations
while fourth party logistics concentrates on optimization of processes to run operations at the
most cost-effective manner (Souza, n.d.).
Since Kruger Products supply their products into the market, they fall under fourth party
logistics. Trucks and warehouses used in storage and distribution of goods should be maintained
regularly to enhance delivery of logistic services.
2.1 Evaluate the concept of reverse (return) logistics and its application to various
industries
Reverse logistics is the opposite of normal logistics. In normal logistic, goods are
transported from the manufacturer to the wholesaler and then to the retailer/consumers. In
reverse logistics, the consumer returns goods to the wholesaler/retailer and the retailer returns the
goods to the manufacturer (Zhang, 2011).
The mobile manufacturing companies apply reverse logistics by requesting their
consumers to return old and unusable handsets in certain shops so that they can be returned to the
manufactures. This helps in promoting proper disposal and minimizing the impact the unwanted
gargets could have on the environment (Negreeva and Kuznetsova, 2016). Once the gargets are
returned, they are recycled into the production process and this reduces the cost of acquiring raw
materials, thus adding value on the manufacturers’ businesses.
When goods are purchased under warranty, reverse logistics is applied while returning goods for
repair to the manufacturer if a technical issue arise leading to malfunctioning of the product
(Chopra, 2020). In this case, goods are returned by the consumer to the retailer, the retailer

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delivers them to the wholesaler and the wholesaler delivers them to the supplier, who returns the
product to the manufacturer. In the absence of reverse logistics, it will be impossible to honor
warranty terms as consumers rarely purchase products from the manufacturer. Therefore, reverse
logistics facilitates repair/replacement of goods purchased thus ensuring that the customer’s
satisfaction is not compromised.
2.2 Analyze issues and challenges in the implementation of application of reverse logistics
 Since the process requires goods to be returned to manufacturers, the cost is relatively high
for the product has to be returned through the same channel it was acquired. The additional
costs eat on the profit margins made by the company and may even lead to the manufacturer
making a loss in the end.
 In an ideal case a product goes through many channels before it is delivered to the
manufacturer, the rationale of returning the product may be distorted as information is
exchanged between persons in the supply-chain. Lack of clarity may prompt the
manufacturer to issue a new product with the returned product being dismantled and recycled
into the production process.
 Incapacity of the labor resources to handle returned goods: In most cases, the returned goods
should be fixed within a specific time-frame so that the customer does not get disgruntled
from waiting for the product for a lengthy period. If the returns are many, there could be a
shortage of labor resource required to repair the product before it is returned to the
customers. This could eventually lead to delayed delivery of the product to the customers,
sabotaging the reputation of the company.
Kruger Products should embrace reverse logistics in its operation so that the period
between return and re-processing of a customer’s order is kept as minimal as possible. Every

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party in the supply chain channel should be informed of the importance that the company places
on returned goods so that delays are mitigated.

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2.3 Analyze the impacts of implementing reverse logistics schemes in different business
sectors.
Customer satisfaction
Customer satisfaction leading to high retention levels. Once the customers receive a
replacement for a product purchased from a retailer, he/she is likely to purchase a product from
the same retailer with a probability of 95% (Zhang, 2011). A customer whose experience is
negative as far as reverse logistics is concerned is unlikely to purchase a product from that
retailer in the future. That being the case, reverse logistic process should be valued highly by
companies and appropriate measures put in place to ensure that the customer receives a service
that meets/exceeds his/her expectation (Zhang, 2011).
Achievement of sustainability goals
High achievement of sustainability goals: Instead of a customer throwing away unwanted
remains of a product, reverse logistics encourages the return of such products thus reducing the
environmental pollution.
Increasing market share
Increase in the market share. An effective reverse logistic ensures customers
satisfactions. With a good reputation of reliable after-sale customer service, the company
increases the number of referral customers leading to an increase in the market share.
Increased transparency
Increased transparency in the supply chain within the network: When reverse logistic is
smoothened, it is easier to identify counterfeit goods if they exist. If one supplier in the supply
chain is accustomed to acquiring goods branded with the company’s name from unauthorized
dealers, this habit is shed off by a transparent reverse logistic (Christopher, n.d.).

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Kruger products could also embrace the reverse logistics in their supply chain cycle. In
most cases, goods are shipped in large quantities from the factory to the destination. During the
offloading process, there are possibilities that some packaging materials are identified to be torn-
out reducing the salability of the product. In order to uphold a good reputation, the reverse
logistic channel adopted by the company should be efficient in a manner that the customer’s
returns are processed as soon as possible to reduce loss in revenues.
3.1 Evaluate different measures which will reduce the amount of greenhouse gas and waste
generated by businesses.
Kruger products have embraced several measures in their logistic management to
minimize the amounts of waste generated by the business and reducing the greenhouse gas
emitted during transportation of goods from the factory to consumers. Management is committed
to complying with the United Nation sustainable development goals that champions for proper
waste management and efficient logistic operations that supports a reduction in emission of
greenhouse gases into the atmosphere (Sustainability, 2020).
Reducing energy consumptions
According to the sustainability report published in the company website, measures taken
to reduce the amount of energy consumed by the company led to a decline in energy
consumption by 10% as at 2010 (Sustainability, 2020). A heat energy recovery system which
installed by the company will reduce energy consumption by 15% by the end of year 2020
((Sustainability, 2020).
Reducing emission of greenhouse gases
The company targets to achieve a reduction in greenhouse gas emission from production
plants by 27% by the end of year 2020 (Sustainability, 2020). Inline with this, alternative and

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renewable sources of energy were adopted in the production. For instance, a biogas gasification
system installed in Westminster led to a reduction in carbon emissions by 22% between 2009
and 2019 (Sustainability, 2020). The management believed that embracing clean energy in
production was the way to go in order for the company to hit its target by the end of year 2020.
Reducing carbon emission from transport services
In the year 2009, the company improved its transportation efficiency by 9%
(Sustainability, 2020). This achievement was as a result of increasing the use of cube-
optimization while shipping products from the source to the destination. Using this technology
improved logistics and further led to efficiency in shipping (Sustainability, 2020). At the heart of
the cycles was utilization of rail transport as opposed to the use of trucks, which led to a decline
in carbon-emission into the environment (Sustainability, 2020).
Reducing water usage
Reduction in water consumption has also been witnessed in the company between 2009
and 2019. The company had managed to minimize the consumption by 28% for a span of 10
years, while at the same time upgrading its wastewater treatment systems (Sustainability, 2020).
In the warehouses, water recycling system is installed to enhance conservation and minimizing
the quantities of wastewater released into the environment.
Reducing use of packaging materials
Reduction in the use of packaging materials is a practice that could minimize the amount
of wastes Kruger products logistic operations could have on the environment. Every product that
leaves the company has to be packaged in branded packaging material. Therefore, the logistic
team has to endeavor to keep the waste arising from the packaging process as low as possible.
Between 2009 and 2019, the company had reduced the packaging material by 13%

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(Sustainability, 2020). The material was estimated to have a weight equivalent to 162 “767”
airplanes (Sustainability, 2020). This is made possible by innovation of shipping and packaging
cases from recycled fiber.
3.2 Analyse the extent to which businesses can apply the concepts of reusing, reducing and
recycling.
Based on the logistics activities carried out in Kruger Products, reusing, reducing and
recycling can are used in different occasions. According to Mesjasz-Lech, (2017), one of the best
ways of minimizing environmental contamination from human activities is by recycling.
Zowada, (2018) also stated that recycling is one way that a company can minimize its cost of
operations. Silva et al., (2019) research revealed that companies that adopts recycling in their
operation highly likely to report more profit compared to competitors that do not embrace
recycling in their production cycle.
The company has embraced reduction practices that had led to a drastic drop in the
quantities of carbon dioxide emission within a span of 10 years. In addition, the quantities of
packaging materials, water consumption and energy utilization were reported to decrease
considerably between 2009 and 2019 (Sustainability, 2020). The chart bin the next page shows
the company reduction achievements since 2009 and the targets set for year 2020.
Energy consumption reduced as a result of innovation that led to installation of new
system that is more efficient in providing heat energy required during production compared to
using the carbon energy. Water reduction is mainly achieved by installation of a recycling
system that enhances reclamation of water used in the warehouses for other uses within the
company. The emission of greenhouses gases reduced as a result of embracing efficient modes of
transport like the use of rail as opposed to trucks that emits more carbon-monoxide and carbon-

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dioxide compared to the rail. The packaging materials are recycled from the fiber making
minimizing the wastes that the company release to the environment from its packaging processes
(Sustainability,2020)
Kruger products, sustainability progress diagram
Source: https://www.krugerproducts.ca/sustainability.php
Sustainability achievements
Energy consumption
ENERGY
CONSUMPTIO
N
UNIT 2018* 2017* 2016* 2015 2009
Benchmar
k
Natural Gas Gigajoules 4,314,86
8
4,093,44
7
3,970,25
2
4,053,60
1
4,271,830
% of Total 61 61 61 61 65
Grid-Supplied
Electricity
Gigajoules 2,329,47
9
2,305,30
9
2,246,50
7
2,187,50
7
1,992,136
% of Total 33 34 34 34 31
Biomass Gigajoules 361,216 350,841 332.189 355,002 15,977

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% of Total 5 5 5 5 0
fuel Metric
tonnes
44,760 34,020 28,297 31,392 287,585
% of Total 1 0 0 0 4
Total Gigajoules 7,050,32
2
6,783,42
7
6,577,24
6
6,627,50
2
6,567,528
GJ/
MDMT
Produced
19.65 19.81 19.53 20.67 21.72
Energy from
Renewables
% of Total 27 27 29 27 26
Source: https://www.krugerproducts.ca/pdfs/KEY_PERFORMANCE_METRICS_2018.pdf
The table above shows that Kruger products has embraced clean energy in its operations leading
to reduction in the quantities of carbon emitted in the environment. Transportation as a key part
of logistics requires fuel and the company has minimized the consumption as shown by reduction
from 287,585 metric tons in 2009 to 44,760 metric tons in 2018.
Greenhouse emissions
GREENHOUSE
GAS
EMISSIONS
UNIT 2018* 2017* 2016* 2015 2009
Benchmark
CO2e Scope 1
(Direct)
Metric Tonnes
CO2e 218,365 207,015 201,96
3 206,732 236,712
kg
CO2e/MDMT
Produced
609 605 599 644 783
Location-Based Metric Tonnes
CO2e 119,240 121,355 132,44
3 142,432 63,843
CO2e Scope 2
(Indirect)
kg
CO2e/MDMT
Produced
332 354 393 444 211
Total Metric Tonnes
CO2e 337,239 328,371 334,40
7 320,613 300,545
kg
CO2e/MDMT
Produced
940 959 993 1060 994
Source: https://www.krugerproducts.ca/pdfs/KEY_PERFORMANCE_METRICS_2018.pdf

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The quantities of carbon-dioxide emissions arising from direct operations has reduced while the
release into the environment has increased. However, the quantities by the amounts of
kg/MDMT has decreased for both direct and indirect emissions.
Water sustainability report
Water UNIT 2018* 2017* 2016* 2015 2009
Benchmark
Effluent
Hydraulic Flow
m3 19,606,33
5
18,895,035 20,114,47
5
20,471,496 22,983,464
M3/MDMT
Produced
55 55 60 64 76
Source: https://www.krugerproducts.ca/pdfs/KEY_PERFORMANCE_METRICS_2018.pdf
Water is a key resource in both logistics and operations. Kruger products has managed to
reduce consumptions by over 2.5 million barrels between 2009 and 2018. This reduction has
seen is commendable as it embraces efficient water consumptions.
Solid Waste management report
SOLID
WASTE1
UNIT 2018* 2017* 2016* 2015 2009
Benchmark
Generated Metric Tonnes 48,658 50,349 47,671 45,390 -
Recovered Metric Tonnes 42,915 41,514 41,216 40,711 -
% of Total 88 82 86 90 -
To Landfill Metric Tonnes 5,743 8,835 6,455 4,679 -
Source: https://www.krugerproducts.ca/pdfs/KEY_PERFORMANCE_METRICS_2018.pdf
Wastes arising from packaging materials and other operations are being accounted for, a
practice that was not there in 2009. This means that there is a proper disposal of waste into the
environment.

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Packaging sustainability
FIBRE CONSUMED UNIT 2018* 2017* 2016* 2015 2009
Benchmark
Purchased Recycled Air Dried MT 4,547 5,500 4,829 6,264 7,026
% of Total 1 2 1 2 3
Produced Recycled Air Dried MT 82,301 74,866 85,454 77,066 78,921
% of Total 23 22 25 24 27
Purchased Virgin Air Dried MT 269,765 262,939 248,803 236,917 181,091
% of Total 76 76 73 74 64
Produced Virgin Air Dried MT - - - - 16,833
% of Total 0 - - - 6
Total Air Dried MT 356,613 343,355 339,086 320,247 283,871
Fsc® Mix Certified % of Total 31 34 32 33 0
Fsc® Recycled Certified % of Total 24 22 25 24 0
Non-Controversial Sources % of Total 45 44 43 43 0
Certified Products
Ul Ecologo (Ul 175) No. of Products 58 55 55 55 93
Forest Stewardship
Council®
No. of Products 110 107 127 126 0
Green Seal No. of Products 1 1 1 1 1
Certified Papermaking
Iso 9001 % of Total
Production
100 100 100 100 -
Production
Paper MDMT 358,807 342,427 336,771 320,613 302,414
Source: https://www.krugerproducts.ca/pdfs/KEY_PERFORMANCE_METRICS_2018.pdf
The company has embraced recycling of materials and stewards on conservation of
forests to reduce impact that the use of raw materials could have on the environment.
3.3 Critically evaluate ways in which businesses can reduce the carbon footprints of
operations within the global supply chain.
Reduction of carbon can only happen with a deliberate effort being made by the
management and sensitizing the drivers on the effects of carbon to the environment. Peters,
Hofstetter and Hoffmann (2011) noted that since carbon release mainly happens during
transportation, the drivers plays a vital role in curbing the amounts emitted to the environment.

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In addition, Zowada (2018) stated that unless there is goodwill from the management, carbon
emission reduction at a global supply chain could be impossible unless all the logistic companies
considers reduction of carbon emission as a key performance indicators for their department
Negreeva and Kuznetsova, (2016) also stated that since companies emphasizes on reducing the
cost of transport, fuel consumption, which directly relates to emission of carbon has become a
key factor of interest in most logistic companies as managements strives in increasing efficiency
without compromising the capacity of the transport system to deliver products to the customers
at the required time.
(Bowersox, n.d.) stated that sustainability in transport logistics can be achieved through
collaboration between manufacturers and retailers. Collaborative logistics entails transportation
of goods from where they are manufactured to where they are sold. As a result, the consumer
food industry is obliged to drive sustainability and provide products are economically,
environmentally and socially sustainable (Heizer, Render, and Munson, 2020). The consumers
assume that companies make reasonable decisions on their behalf. Adopting available option in
maintaining sustainability should be at the heart of logistic companies to mitigate carbon
emission.
Since 2009, Kruger products has reduced the use of trucks as a means of shipping
products from the source to destination by 8.8% per year (Sustainability, 2020). The
management equates the reduction to elimination of 6000 trucks from the road every year. Route
optimization was introduced and was accompanied by introduction of new efficient trucks,
training of drivers, use of different type of fuel and re-packing of products to increase the
quantities transported by a single truck. These measures led to a decline in the amounts of trips

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required to deliver products from the factory to the wholesalers and retailers, and a direct
decrease in the quantities of carbon released in the environment (Sustainability, 2020).
As an alternative mode of transport, the company has objectively decided to explore the
use of rail to minimize emission of carbon. In the year 2009, truck was used to transport 97% of
goods. However, by year 2013, truck transport has declined up-to 89.5% as the company shifted
part of the shipment to inter-model rail shipment (Sustainability, 2020). These efforts had a
direct impact in the reducing the amounts of carbon emitted to the environment.
Conclusion
Kruger Products sustainable logistic management has embraced most practices geared
towards achieving logistics milestones with minimal impact on the environment. The company
has embraced sustainable processes that has led to reduction in the amounts of water and energy
consumptions, and emission of green-house gases into the environment. With adoption of those
processes, the management demonstrates its commitment in running not only a profitable
business, but also an environmentally friendly business.

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