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978-1-5386-9500-5/18/$31.00 ©2018 IEEE
Applicability of Lean and Green Concepts in
Logistics 4.0: A Systematic Review of Literature
Anuradha Edirisuriya
Department of Industrial Management
University of Kelaniya
Sri Lanka
edirisuriyaanuradha@gmail.com
Samanthi Weerabahu
Department of Industrial Management
University of Kelaniya
Sri Lanka
samanthiw@kln.ac.lk
Ruwan Wickramarachchi
Department of Industrial Management
University of Kelaniya
Sri Lanka
ruwan@kln.ac.lk
Abstract - Sustainability is emerging as a main
consideration throughout the industrial world due to the
environmental pollution and degradation happening in a major
scale as a result of industrial wastes while lean management is
becoming a popular management tool in minimizing w aste.
Logistics industry contributes for these issues due to the wastes
released in a considerable amount. Experts have highlighted
that implementing lean principles in parallel to green concepts
is more successful; which could lead to waste and cost
reduction. A theoretical gap has been identified in the field of
logistics in applying lean and green concepts in the context of
Industry 4.0. A comprehensive literature review was conducted
to address the identified research gap with the objective of
examining the important lean practices and green concepts
which are expected to enhance the operational performance of
logistics functions. A key word based search, analysis of the
topic and abstract, full text review were the steps followed
respectively, for selecting the most relevant research papers
which have been proven as valid, accepted and published to
extract the knowledge for this study. As the major
contribution, authors have developed a conceptual framework
which focuses on the enhancement of operational performance
of logistics operations by applying lean and green concepts
with special reference to Industry 4.0 technologies. The results
of the study will be beneficial for the LSP as it will suggest the
strategies, concepts and techniques to enhance the operational
performance of logistics functions.
Keywords: Green Concepts, Industry 4.0, Lean Management,
Logistics, Operational Performance
I. INTRODUCTION
Logistics plays a major role in supply chains for
integrating the material, information and financial flows
among the different parties by performing functions such as
transportation, freight forwarding, warehousing and
distribution. Most of the logistics services are outsourced by
the other businesses for gaining cost advantages and for
delivering a proper service to their customers [1]. Therefore,
Logistics Service Providers (LSPs) are having an increasing
demand for their services in the industrial world. Hence, it is
vital for LSPs to focus on the enhancement of the
operational performance in order to provide a better service
and to cater the increasing demand while being sustainable
and competitive enough in the business.
Lean management focuses on minimizing different
kinds of wastages to enhance the operational performance.
Although most of the current manufacturing industries use
the lean management concepts to a considerable extent, it is
rarely seen in service sectors. Yet lean concepts can be
applied to have benefits in service sector. The study will
focus on applicability of lean concepts for the transportation
services and warehousing facilities offered by the third party
(3PL) / fourth party logistics (4PL) service providers.
Techniques, methods or processes based on lean concepts to
minimize different kinds of wastes of transportation services
and warehousing facilities will be identified [2].
Sustainability is emerging all over the world and it is
becoming a vital factor for any business. Managing the
waste in an environmental friendly manner while
considering the sustainability of the business and
community is important. The most applicable green
concepts to the logistics services which are practiced in
different industries will be identified through the study [3].
Realizing Industry 4.0 is becoming a critical factor for
almost all the manufacturing industries existing in the
world. The current manufacturing facilities which are
established all over the world have to deal with critical
problems which directly affect the efficiency and the
profitability. Low cost-labour is becoming a rare resource to
an extent which using machinery is more profitable while
depending on human labour is becoming a threat due to the
mass customization requirements high product quality
expected by customer. Advanced technologies are trending
in manufacturing industries as solutions for above-
mentioned issues which lead the industries towards Industry
4.0. Importance of integrating new technology in all aspects
of industry such as manufacturing, warehouse controlling
and logistics is highlighted by experts to proceed further in
achieving Industry 4.0. The role of logistics is critical in this
scenario as inbound logistics affect the manufacturing
products on time while outbound logistics affect the on time
delivery and customer satisfaction. Developing suitable
technologies and using advanced technological components
in logistics activities along with integrated logistics systems
are important in realizing the level of Industry 4.0 [3].
The study will focus on applying lean concepts for
minimizing wastes generated in logistics operations and
green concepts which are relevant to all three aspects:
people, profit and planet; for sustainable logistics practices.
Concentrating on the implementation of lean and green
concepts simultaneously in logistics operations, with the
objective of enhancing the operational performance is the
uniqueness of this study. On top of that, suggestion of
suitable Industry 4.0 technologies to execute proposed lean
and green concepts successfully in a digitalized industrial
setting, amplifies the novelty of the study. Finally identified
lean and green concepts will be integrated along with the
emerging technologies in the context of Industry 4.0 to
enhance the operational performance and the sustainability
of the transportation services and warehousing facilities
offered by the LSPs.
II. METHODOLOGY
The approach of this study is the systematic review of
literature. As the study focuses on the applicability of the
internationally accepted and standard lean and green
concepts, the relevant knowledge was extracted from the
research papers which have been proven as valid, accepted
and published. The articles were selected mainly under four
categories.
Initially, 55 articles were selected through a keyword
based search conducted in academic databases (Google
Scholar, Mendely, Scopus, Science Direct) related to the
above four categories. Topics and abstracts were analyzed in
the next stage of article selection process which resulted in
the exclusion of 17 articles due to irrelevance for the study.
Thirty-eight articles selected at the end of the second stage
were subjected to full text review in the final phase. The
content analysis approach was adopted to investigate the
state of knowledge in the selected 22 articles at the end of
article selection process. Fig. 1 shows the different phases of
selecting articles with the number of articles selected for
each category.
When selecting research articles, a high concern was
given for the multidisciplinary studies which have discussed
and investigated on the combination of two or more
disciplines that have been considered for this study rather
than focusing on studies about a single discipline.
Furthermore, authors focused more on the studies that have
examined about the practical implementation of lean and
green concepts, in the different real world industrial
scenarios to enhance the operational performance of various
operations. Moreover, the year of publication was a major
consideration for extracting most updated knowledge in
order to improve the relevance of the study to the current
context. The review focused on referred journal papers and
publications within the period of 2003-2018 whereas most
of the articles are published on or after 2015. A
comprehensive literature review was conducted to address
the identified research gap with the objective of examining
the important lean practices and green concepts which are
expected to enhance the operational performance of logistics
functions.
Fig. 1 - Phases of article selection process
III. LITERATURE
REVIEW
This section presents the summary of few research
articles reviewed under each area relevant for the study.
Two articles for each category are presented for all four
categories. The selected articles have addressed two or more
disciplines which have been considered in this study.
A. Logistics
Systematic review of literature has been done on
Logistics Response to the Industry 4.0 in the perspective of
Physical Internet concept in Serbia in 2016 [4]. The study
reveals that the current state of overall logistics efficiency is
not ideal, and a new concept for logistics organization that
challenges current and future industrial practice is needed. It
concludes that five pillars will be critical for logistics
transformation in the Industry 4.0 contexts: able to build
digital capabilities, enable collaboration in the ecosystem,
manage data as a valuable business asset in the aim to
secure crucial control points, manage cyber security,
implement a two-speed system/ data architecture to
differentiate quick-release cycles from mission critical
applications with longer turnaround times. Furthermore, the
study proposes a concept of Physical Internet as a better
approach in realizing this logistics transformation [4].
Countermeasures for challenges in implementing
internet logistics and problems in the current situation have
been analyzed based on the Chinese logistics industry to
provide the impetus for further development of the logistics
industry [5]. Both transportation and warehousing aspects
have been considered in this study in the context of
implementing internet logistics concept. The authors have
highlighted few issues existing in the logistics industry in
China while analyzing and comparing the current status with
the countries such as the United States of America, Japan,
Germany and India. Low degree of standardization,
information and automation in logistics enterprises,
insufficient construction of logistics infrastructure, and
logistics talent shortage have been identified as major issues
in Chinese logistics industry. Several countermeasures have
been proposed as solutions for above-mentioned issues
which are based on internet and automation technologies.
Although there are obvious challenges when implementing
internet logistics model, there are enough opportunities to
address the identified issues successfully with the
emergence of new technological concepts such as Internet of
Things (IOT), automation, online platforms and logistics
software. Strengthening the leadership function of the
government and improving the rules and regulations based
on the internet technologies have been identified as a
countermeasure while strengthening the alliance of small
and medium logistics enterprises is recommended. It is
necessary to follow an accepted common standardization
policy and automation technologies in the industry. The
training and development programs for the employees at
each level in the logistics industry is much needed as new
skills and talents are needed in the internet logistic model
compared with the skills needed in the traditional system
[5].
1. Logistics 3. Sustainability
2. Lean Management 4. Industry 4.0 Technologies
B. Lean Management
A study has been conducted on lean automation enabled
by Industry 4.0 technologies based on a case study and a
systematic review in Germany in 2015 [6]. The study
discusses about the lean concepts and Industry 4.0
technologies while highlighting the advantages of
combining those two disciplines. Lower risks of integration,
more standardized and transparent processes which could
reduce essential work, and less complexity are major
advantages of the installation of Industry 4.0 solutions in
implementing lean concepts. Study introduces four smart
concepts. Smart Operator which is equipped with Cyber
Physical Systems (CPS) and proper sensors recognize
failures and automatically trigger fault-repair actions on
other CPS. Smart Products could collect and then process
data for the analysis during and after its production and
contain Kanban information to control production processes.
Smart Machine CPS could be integrated fast and flexible in
fault-prone processes. Optically identical components can
be identified via technologies such as Quick Response (QR)
codes or Radio Frequency Identification (RFID). Smart
Planner will be capable of finding the optimum between the
highest possible capacity utilization per working station and
a continuous flow of goods [6].
A study has been carried in France in 2016 with the
objectives of finding an appropriate way to combine and
implement lean and green tools and methodologies to
identify how to cope with the difficulties of dealing with
customers and regulatory requirements; while fostering the
economic, environmental and social pillars of sustainability
[7]. The study has developed a Lean and Green House and
Maturity deployment model while identifying Correlations
between lean and green concepts and tools. Strong
relationships with suppliers and key stakeholders are
included as an important way of ensuring strong social
sustainability leading to competitive advantages.
C. Sustainability
A study has been done on the role of opportunities and
challenges in the context of sustainability by applying
partial least square structural equation modeling, for a
sample of 746 German manufacturing companies from five
industry sectors, in 2018 [8]. The study considers all three
basic aspects of sustainability: economical, ecological and
social while identifying factors relevant for each aspect. For
instance, the study reveals that increasing process
transparency in intra-firm and inter-firm logistics can be
achieved allowing to lower logistics costs (economical),
load balancing can be optimized that leads to reduced
energy consumption (ecological), human machine interfaces
that lead to increased employee satisfaction in industrial
workplaces (social). The study presents a conceptual
framework which shows that strategic, operational,
environmental and social opportunities are positive drivers
of Industry 4.0 implementation. Moreover, it is shown that
the perception of Industry 4.0-related opportunities and
challenges depend on different company characteristics [8].
A study has been carried in Malaysia in 2017, with the
objectives of presenting the most suitable measurement
items for sustainable logistics practices and logistics
transport performance for transporters and examining the
influence of sustainable logistics practices on logistics
transport performance from the views of transport users [3].
The finding of the research shows sustainable logistics
practices have a strong effect on logistics transport
performance of transporters. The study has considered about
manufacturers, third-party logistics service provider and
freight forwarders to achieve the research objectives.
Unpredictable climate change, financial crisis, unnecessary
hikes in oil and raw material price, the fear on depletion of
natural resources, growing public interest towards the
environment, immense pressure exerted from law and
regulation as well as mass media are the major challenges
identified relevant to the sustainability of the logistics.
Factors related to environmental, economic and social
sustainability have been considered when conceptualizing
sustainable logistics practices and defining the model.
Logistics service execution (environmental), pricing
practices and service offerings (economical), labor practices
(social) are the four independent variables identified which
influences on the logistics transport performance (dependent
variable) in suggested model. Sub factors for each variable
has been defined. The model has been tested and validated
using valid data collected from 194 firms [3].
D. Industry 4.0 Technologies
A study has been conducted on future industrial
opportunities and challenges in China in 2016 [9]. The study
suggests that most important strategies and contents of
industry 4.0 are building a network known as Cyber-
Physical System (CPS), researching two major themes;
smart factory and intelligent production, realization of three
integrations: horizontal integration vertical integration and
end to end integration. Furthermore, the study states that key
technologies for Industry 4.0 are CPS and Cyber-Physical
Mobile Internet and Internet of Things Technologies
Production Systems (CPPS), Cloud Computing Technology,
Big Data and Advanced Analysis Techniques and Digital
manufacturing [9].
It is stated that the visual computing can enhance
human-machine interaction as a part of the IT enabling layer
in different levels of smart production in a study conducted
in Spain in 2015 [10]. The study is on Visual Computing
which is highlighted as a key Enabling Technology for
Industry 4.0 and Industrial Internet. Furthermore, it has been
identified that CPS are the systems which interconnect
physical and virtual worlds with the technologies such as
smart machines, smart data storage systems, smart factories,
Internet of Things and Internet of Services. Intelligent
machines, advanced analytics, industrial data system, big
data analytics, remote and centralized data visualization,
physical-human networks are stated as key technologies in
Industrial Internet. Furthermore, the importance of vertical,
horizontal and end-to-end integrations have been
emphasized [10].
IV. DISCUSION
This section presents the analysis of factors identified
through the literature review. Five major considerations
have been focused on which are important in implementing
lean and green concepts in logistics industry in the context
of Industry 4.0. All the factors which have been identified
under each consideration have been validated using different
studies. Results of the analyses conducted for each
consideration have been presented in tabular form. Five
major considerations are; “Industry 4.0 technologies”,
“Components of automation”, “Lean management
concepts”, “Sustainable logistics practices” and “Challenges
in logistics industry.”
A. Industry 4.0 technologies
Different technologies are emerging as a result of fourth
industrial revolution which is most commonly referred as
Industry 4.0. Out of those technologies, five main
technologies relevant for the logistics industry have been
discussed in this section (Table 1). It has been discussed that
how each technology will be beneficial and critical for the
logistics industry in the point of view of authors.
IOT which deals with automation of processes is a key
technology in the context of Industry 4.0. When we consider
a certain industrial process, all the physical components are
interconnected in such a way that process is mostly
automated. This technology is important for improving
logistics functions as it will lead to the enhancement of
operational performances along with the efficiency and
effectiveness. Cloud computing will be the main technology
used to store, manage and process data in the future.
Worldwide access will be available for the industrial data
which has been hosted in cloud databases. Therefore,
applications of cloud computing will improve the
communication and transaction process of global LSP who
own subsidiaries in different geographical locations. Big
data analytics deals with processing huge data sets
effectively to identify hidden market patterns and important
correlations. As massive amount of data is captured and
processed in logistics functions in a daily basis, the concept
of big data analytics will be unavoidable in the future
logistics industry. Simulation mainly focuses on
optimization of processes while analyzing the optimal usage
of industrial resources. A virtual machine that can simulate
the machining of parts using data from the physical machine
has been developed by a German machine-tool vendor
which lowers the setup time for the actual machining
process by 80 percent [11].
TABLE 1. INDUSTRY 4.0 TECHNOLOGIES
Study Industry 4.0 Technologies Applicable in Logistics
Internet of
things and
Automation
Cloud
computing
Big data
analytics
Simulation Augmented
reality and
virtual
reality
[4] x x x x x
[5] x x x x
[8] x x x x x
[9] x x x x
[10] x x x x x
[11] x x x x x
With the technological development taking place,
simulation is emerging as a key technology as many
software and services are available. Logistics industry faces
many challenges regarding the optimization of resources
and processes such as identifying best routes in
transportation and triggering the most efficient design for
warehouses with the available space. Therefore, simulation
will be a technology which will provide a considerable
assistance for finding solutions for such challenges.
Augmented reality and virtual reality are being used in
visualizing things successfully. This will be a key
technology used in the future industrial world. Specially, it
will be important for location identification both in picking
process in large warehouses and triggering vehicles and
products being transported in routes to get the real time
updates. Hence, it is obvious that Augmented Reality (AR)
and Virtual Reality (VR) technologies will play a major role
in future logistics operations.
B. Components of automation
Five major technological components have been
identified by authors, which will lead to fully automate the
logistics functions in the future (Table 2). As explained in
the above section automation is a key feature of the fourth
industrial revolution. It is mainly focusing on internet of
things which means that physical objects are interconnected
with the ability of communicating each other which results
in completing the processes themselves without being
handled or involved by humans. Many technological
components have been developed to automate different
processes in different industries. Kuka is a European
manufacturer of robotic equipment which has offered
autonomous robots with the characteristics described above.
Those autonomous robots can work and adjust their actions
to fit the next unfinished product in line while high-end
sensors and control units have been used to enable close
collaboration with humans [11]. Although it is difficult to
automate the logistics functions completely, semi
automation can be identified in the current situation.
Intelligent robots and AGVs (Automated Guided
Vehicles) will play a major role in warehouse functions such
as picking, storing, loading and unloading while
autonomous vehicles will transport things from a certain
geographical location to another without drivers.
Technologies such as AI (Artificial intelligence) and GPS
(Global Position System) will enhance the automation
process of logistics functions by strengthening intelligent
robots and autonomous vehicles. Scanners, readers or
mobile applications which can detect RFID and QR codes
will enable the automation of processes such as tracking the
product location, sorting, data entering of standard smart
products which include RFID tags and QR codes. Even the
analysis process of data tracked will be automated with the
integration of information systems, mobile applications and
the scanners. Different types of sensors will enable smart
devices to strengthen the automation processes of logistics
functions. CPS is considered as the main component in
automation as it refers to systems which integrate all
physical systems and information systems in the cyber space
which allows the world wide access.
TABLE 2. COMPONENTS OF AUTOMATION
Study Components that can be Used in Logistics Automation
Intelligent
robots and
autonomous
vehicles
Radio
Frequency
Identification
technology
and Quick
Response
Codes
Sensors
and
conveyors
Smart
devices
Cyber
physical
systems
[4] x x
[6] x x x x x
[8] x x x
[9] x x x x x
[10] x x x
[11] x x x x
A case study has been conducted on benefits of
implementing RFID technologies in warehouses, which
gives evidences on enhancing operational performance [12].
Authors have calculated and shown that the total operation
time of the Distribution Center (DC) can be reduced from
269.1 hours to 171.9 hours by using RFID technology. So it
is obvious that executing recommended technologies will
enhance the operational performance of warehousing
function by reducing the time of operations.
C. Lean management concepts
Although it is impossible to stop waste generation
completely, it can be minimized by using proper
methodologies to execute industrial processes. Productivity,
effectiveness, efficiency and cost reduction were the main
concerns in early stages of industrial revolution. Taiichi
Ohno introduced the lean management concepts which are
now widely used in the manufacturing industries all over the
world to minimize the different kinds of wastes generated.
In this section authors have presented five key concepts of
lean management which are believed that can be
successfully implemented in the logistics industry (Table 3).
The relevance of each concept for the logistics industry has
been discussed.
JIT (Just in Time) is a principle introduced for
minimizing waiting times basically in manufacturing
process. But in the current context, it is widely used
throughout the supply chains starting from suppliers’
suppliers and extending to customers’ customer. With this
principle being implemented properly no one will wait for
something to happen and no machine or human will be idle
which verifies the optimal use of resources. This concept is
implemented using a method called Kanban system which
will provide alerts in advance to notify when certain things
are due. This is already being used in warehouse operations
can be used meaningfully in almost all the logistics
processes. Moreover, Kanban is electronically enabled and
developed through web-based systems. This has a
considerable potential to be further developed by integrating
to Cyber Physical Systems along with the simulation
technologies which will automated the alert generation
processes while being streamlined automatically to produce
the most optimal result with the available resources. Jidoka
is the principle introduced to stop the manufacturing process
immediately when an error is occurred in any place. Andon
is the method used to immediately notify that an error has
occurred with place and issue.
This is widely used in maintenance processes and in the
current world Andons has developed to a level which the
notification is sent to the mobile device of the responsible
person. Furthermore, with the method called Poka-Yoke
which means that error proofing, the notifications are
provided before a system generates an error which avoids
errors happening and hence a more meaningful application
of Jidoka concept rather than Andon. However, with the
concept of Jidoka which is implemented mindfully using
Andon and Poka-Yoke, logistics operations can improve to
the next level by avoiding errors such as wrong deliveries in
transportation, wrong items being picked up in warehousing
processes. Inventory control will be more feasible with this
concept. Moreover, when the processes are automated by
using components such as AGVs, Robots, and driverless
vehicles Jidoka which strengthened by electronic and
mobile Andon systems and Poka-yoke systems can be
integrated with relevant CPS to automate the monitoring and
maintenance of logistics processes. 5S is all about the
workplace organization which has a big impact on industrial
processes. Sort, set in order, shine, standardize and sustain
are the key steps meant by 5 S which are improved with
another important concept called workplace safety. Safety is
prioritized as the first job in any industry. In warehouse
management, sorting and setting in order can be used
meaningfully to optimize the processes. Standardization and
sustainability are major requirements in the context of
industry 4.0. These concepts have a huge potential and
meaning when it comes to industrial applications. Kaizen is
a concept about generating and implementing new
suggestions for continuous improvement of the workplace.
This is important for the logistics industry for technological
improvement, employee development and process
optimization.
Visual management is a key consideration in Lean
Management. This is interconnected with all the aspects of
processes. For an instance safety is secured through visual
signs displayed in the relevant places in the workplace
environment. Moreover, digital displays are being used to
exhibit the processes. In modern warehouses digitalized
visual management techniques are being used to display real
time results of analyses of the daily activities. These visual
management techniques can be integrated with simulation
techniques to identify the optimization opportunities in
transportation functions. Mapping techniques such as
process mapping and VSM (Value Stream Mapping)
introduced in lean management are important in analyzing
and identifying the points which wastes are being generated
and the value adding points. VSM has been used in a case
study to map the current status and future status of the
operation in a DC [12]. Authors have shown how VSM
concept can be used to identify and eliminate non-value
adding activities. They have shown that total operation time
of the Distribution Center (DC) can be reduced from 1,301.4
hours to 269.1 hours by using lean concepts. This is a good
example to realize the impact of implementing lean concepts
to enhance the operational performance. VSM can be used
to map the processes within the warehousing facilities as
well as to map transportation routes to highlight the points
which are most important and critical in the logistics
functions.
TABLE 3. LEAN MANAGEMENT CONCEPTS
Study Lean Management Concepts Applicable in Logistics
Just In
Time and
Kanban
Jidoka,
Andon
and Poka-
Yoke
5S +
S
Kaizen Visual
management
and
mapping
[2] x x x x
[6] x x x x
[7] x x x x x
[12] x x
[13] x x
[14] x
[15] x x x x
[16] x x x x
[17] x x
[18] x x x
D. Sustainable logistcs practices
Due to the huge amount of industrial waste generated
throughout decades and the environmental degradation
happening on a large scale, sustainability is becoming an
essential consideration. Despite the environmental concerns
lead to the emergence of sustainability, it has been
highlighted that the importance of the sustainability depends
on all three aspects: social, ecological and economical
which are commonly referred as 3Ps (People, Profit and
Planet). In this section the authors have identified five main
categories of sustainable logistics practices which are
followed by a discussion that includes explanations how
each practice will affect the sustainability of the logistics
industry in the future (Table 4).
Community is a main focus in sustainability. The most
valuable resource that an organization own is the human
resource. Employees play a critical role in any industry. In
the current context manpower is much needed for the
logistics industry as most of the MHEs (Material Handling
Equipment) used in warehousing and almost all kinds of
vehicles used in transportation are handled by humans. Even
though humans will be replaced by intelligent robots and
smart devices and AGVs, with the transformation of
traditional logistics functions into automated, streamlined
processes, it is impossible to eliminate humans completely.
Therefore, it is obvious that employees must be trained
properly to develop the skills to handle new technologies.
The LSPs who focus on employee development will be able
to sustain in the logistics industry. Moreover, the LSPs must
concern about the sustainability of the stakeholders and
community.
TABLE 4. SUSTAINABLE LOGISTICS PRACTICES
Study Categories of Sustainable Logistics Practices
People Planet Profit
Employee
development
practices
Socially
responsible
practices
Eco
friendly
practices
Service
offering
practices
Performance
related
practices
[3] x x x x x
[4] x x x x x
[8] x x x x x
[13] x x x x
[19] x
[20] x x x x
[21] x
[22] x x x x
Socially responsible logistics is becoming a trend in
logistics industry due to the importance of that concept.
When implementing business functions, designing the
warehouses, using lands and disposing wastes, the LSP must
pay attention on community around and avoid the social
disgust happening. Moreover, other aspects like education,
healthcare and cultural development activities should be
performed through CSR (Corporate Social Responsibility)
Projects. Adhering to eco-friendly practices is a must for
sustainability of logistics services. Many kinds of wastes are
generated in logistics industry when performing business
functions. Air pollution is happening due to the emissions
from vehicles in all transportation means while water
pollution is happening through ships and sound pollution is
happening due to both trucks and airplanes. Moreover,
attention must be paid on renewable energy generation
technologies as transportation functions in the logistics
industry consumes a huge proportion of fuel consumption in
the world. Being unable to focus on sustainable and eco-
friendly energy generation methods such as solar power will
be a challenge to sustain in the logistics industry.
It is obvious that economical aspect must be considered
for an organization to be sustainable in a competitive
industry. The Logistics industry is highly competitive and it
is difficult to sustain in this industry with a poor
performance in economic perspective. Simply, enough
amount of revenue must be generated through business
functions. Value that offered to customers through different
services must be reflected in prices. Pricing practices must
be competitive in order to attract and retain the customers
with LSP. Although logistics industry deals with many
kinds of products in their business operations, in the end,
LSPs are providing a variety of services to customers. A
high quality service has to be maintained in order to
compete successfully in the industry. A descriptive case
study has been conducted on Toyota South Africa Motors
(TSAM) to study about the relationship between the
environmental approach, lean principles and established best
practice culture while examining the impact of three
principles on business results [21]. The authors highlight
that business has grown by R1.5 billion in the period 2007–
2013, as a result of Toyota’s global environmental
programme. TASM has focused on reduction of emissions,
transport waste and avoidance of unnecessary waste
generation in the supply chain.
E. Challenges in logistics industry
The potential of integrating the identified lean
management concepts and sustainable logistics practices
along with the Industry 4.0 technologies to enhance the
operational performance of the business functions in
logistics industry was discussed in this study. However,
logistics Industry 4.0 faces different challenges when
transforming traditional logistics business functions into
Logistics 4.0 by adopting Industry 4.0 technologies. Such
four major challenges faced by logistics industry have been
discussed in this section as the final analysis of factors
identified in the studies considered for the systematic
literature review (Table 5).
The most valuable component is human resources in an
organization. On the other hand, it is the same component
which is most difficult to transform or change to another
status or condition from the existing. Simply, people hesitate
to change. Hence, it is a challenge to train employees and
develop their skills in such a way to suit to the new
transformation in the logistics industry. No longer the
logistics industry will be able to retain with less educated
employees. Technological knowledge and knowledge of
business functions are essential to handle technological
equipment that will be used in future warehouses and
transportation functions while controlling them to have the
optimal output. No longer people will load, unload, store
things or drive vehicles. Intelligent robots and automated
vehicles will perform those functions. Therefore, employees
must be trained to design, develop, and maintain
technological equipment. Moreover, analytical,
communication, managerial and problem solving skills must
be developed in employees to identify trends, patterns in
emerging business opportunities, find solutions and
implement them successfully for problems occur.
Even though, development of infrastructure and
network facilities is comparatively easier than training
employees, yet it is a challenge as it needs a huge amount of
investments. Future LSPs will not be able to provide a
successful service alone. LSPs must build strong networks
among them and with all other stakeholders. Collaboration,
vertical and horizontal integration and strategic alliances
will play a major role in future logistics industry. Therefore,
technological compatibility is a must to perform successful
transactions. For that to happen proper infrastructure must
be available all over the world. In this case government has
a critical responsibility to set standards along with the
support of logistics experts and coordinate different LSPs
and stakeholders. Setting standards need to address many
aspects of logistics industry starting from simple factors like
dimensions of the vessels, pallets and goes up to complex
factors such as deciding common policies regarding
international transactions. Therefore, it is a challenge to
identify standards that will compatible with upcoming
technologies to continue logistics functions smoothly.
Imposing necessary rules and regulations to be followed by
LSPs is necessary while foreseeing the possible weaknesses,
new problems that can occur due to the technological
transformation.
TABLE 5. CHALLENGES IN LOGISTICS INDUSTRY
Study Challenges in Traditional Logistics Industry when
Transforming into Logistics 4.0
Training
and
development
Development
of
infrastructure
and network
facilities
Technological
adaptability
Standardization,
coordination
and regulation
[1] x x x
[4] x x x x
[5] x x x x
[8] x x x x
[9] x x x x
[10] x x x
[11] x x x x
Cyber security must be a major concern in a globally
connected network of LSPs in the future, which will deal
with Cyber Physical Systems (CPS). An external and
independent authority; most probably governmental bodies,
needs to take part in the regulation and coordination. It is
still a challenge to play such a role which must be
successfully achieved in future logistics industry.
Technological adaptability is a challenge that is in front of
LSPs, as almost all transformations in logistics functions
will depend on high end technologies in the future. LSPs
must have an adequate potential to adapt to new
technologies unless they will be unable to sustain in the
future logistics industry. As no one can stop technological
changes happening with the industrial revolution; Industry
4.0, LSPs neither can avoid facing these challenges nor can
be isolated without performing logistics functions according
to industrial standards in the future. Hence, to sustain in the
logistics industry successfully, the above discussed
challenges must be addressed appropriately.
V. CONCLUSION
This study presented a conceptual framework to
illustrate how lean and green concepts can be integrated in
the logistics industry for enhancing operational performance
of logistics functions which was developed by collating
factors identified through all considered studies; which is
the unique theoretical contribution of this study to the
literature (Fig. 2). In addition, the proposed framework
suggests the most critical Industry 4.0 technologies to be
executed in the future logistics industry and the impact they
have on implementing lean and green concepts in a
digitalized and automated industrial environment. The
findings of the study will be beneficial for the LSPs to
enhance the operational performance by adopting suggested
lean and green strategies, concepts and techniques. LSPs
must focus on addressing the challenges highlighted in this
study to sustain and compete in the future logistics industry.
Specially, training and development of employees must be
aligned with the emerging technologies to develop their
skills to cater to future requirements. It is obvious that the
digitalized industry consumes more electrical power, and
cost of power generation will be significantly increased.
Therefore, initiatives must be taken towards implementing
sustainable power generation methods such as solar power.
Furthermore, the clients of the LSPs may be benefited, as
the operational performance of business functions they
outsource to LSPs will be enhanced. This study will be
beneficial for academia and future researches as it provides
insights on lean and green concepts applicable in logistics;
transportation and warehousing functions, along with the
Industry 4.0 technologies. Although the presented
conceptual framework is completely developed based on
proven facts extracted from previous literature, it was not
tested in a practical industrial context. Additional research is
needed to
further validate the model based on real world
industrial data. The theoretical model can be further
examined in other functions in logistics, as only the
warehousing and transportation have been addressed in this
study. Moreover, this research can be extended to identify
the best practices of implementing lean and green concepts
specific to the logistics industry.
Fig. 2. Proposed conceptual framework for integrating Lean concepts and sustainable logistics practices along with Industry 4.0 technologies
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