Logistics Planning and System Design for Subway
Required Reading
The following article is used in the Case study and contains an excellent illustration of how strategic logistics planning can be utilized to meet both environmental and “bottom line” objectives:
Fitzgerald, T., Brown, T., & Stewart, E. (2009 Apr) Subway's Journey to Green, Logistics Management (2002), Highland Ranch, Vol. 48, Iss. 4, pg. 22.
The following two articles, which you may be familiar with from a previous course, provide good examples of how Electrolux and Burlington Coat Factory have redesigned their logistics networks to address changing economic and competitive landscapes:
Hannon, D. (2007 Aug 16) Electrolux Designs a Logistics Network to Support Global Sourcing, Purchasing, Boston: Vol. 136, Iss. 11, pg. 29
Trebilcock, B. (2006, Oct.) Burlington Coat Factory Builds a Distribution Network, Modern Materials Handling, (Warehouse Management Edition), Boston Oct 2006, Vol 61, Iss 10, pg. 26
Read the article below and answer the following questions in a 3- to 4-page paper:
Is Subway's effort aimed at “greening” the supply chain compatible with “bottom line” objectives? (Explain.)
Describe the major logistics strategies and tactics associated with Subway's approach for aligning logistics operations with environmental initiatives.
Assess the transferability of Subway's logistics plan applied to other businesses within and outside the food sector.
Fitzgerald, Tina, Tim Brown, Elizabeth Stewart (2009 Apr) Subway's Journey to Green, Logistics Management (2002), Highland Ranch, Vol. 48, Iss. 4, pg. 22.
Assignment Expectations
Demonstrate an in-depth understanding of the elements involved in developing comprehensive logistics planning and its implications for achieving environmental and “bottom line” objectives. Display clarity of logic and depth in describing how logistics planning can be aligned with economic and environmental objectives. Apply previous course experiences, critical thinking, and creativity in assessing the transferability and adaptability of logistics planning solutions from one organization to other related businesses and organizations.
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Logistics Planning and System Design
Is Subway's effort aimed at "greening" the supply chain compatible with "bottom line" objectives? Explain
Yes. Indeed, Subway's strategic logistics planning efforts in "greening" the supply chain are compatible with the "bottom line" objectives. With this regard, the company decided to do away with inefficiency and waste in several areas: waste reduction; energy efficiency; food safety and resource conservation (Fitzgerald, Tim & Elizabeth, 2009). For instance, by focusing on green transportation and logistics strategy, the company has been able to reduce its carbon emission significantly over the past three years. This has been achieved through a number of efforts that have been made by the company. Firstly, in accordance to the motto of the company, "Eat Fresh", the company procures its raw materials from local suppliers. This is advantageous to the company in that it reduces transportation costs, reduces handling procedures, and hence reduces energy consumption (Fitzgerald, Tim &Elizabeth, 2009).
Moreover, procuring materials from local supplies not only reduces transportation costs but also provide its customers with freshest products. Thus, this is one way of attracting and retaining a large client base and consequently achieving its "bottom line" objective: making more profit. According to Fitzgerald, Tim and Elizabeth (2009), the company had traditionally focused on its corporate responsibility and increasing customer awareness, all of which are aimed at increasing the client base and consequently the profit margin. On its broader green logistics in its supply chain, the company intends to more suppliers to be situate their plants locally. Localizing the supplier base will result to the company's reduced transportation costs, energy consumption and consequently a reduction on its carbon emissions. According to Fitzgerald, Tim & Elizabeth (2009), localizing the supplier base is one of the company's long-term objectives of reducing green house gas emissions by 25 percent. This is due to the fact that once the suppliers are localized; they will cause less carbon emissions during the shipping process.
Describe the major logistics strategies and tactics associated with Subway's approach for aligning logistics operations with environmental initiatives.
Subway has employed a number of logistics tactics and strategies aimed at aligning logistics operations with environmental initiatives. Fitzgerald, Tim and Elizabeth (2009), informs that the green logistics tactics and strategies that Subway has employed are in its best practices: improving asset utilization, reducing mileage, and optimizing service levels. For instance, on reducing miles, Subway focused on its purchasing and logistics due to the fact that the company outsou...