Going “ Green ” in the Delivery Supply Chain : Evidence and Insights

Given increased consumer interest in green products and practices, this paper will focus on examining sustainable practices within the shipping, packaging and delivery supply chain. “Green” shipping, packaging, and delivery focuses on transporting products from providers (e.g., manufacturers, retailers) to customers to reduce CO2 emissions, landfill waste, and overall negative impact to the environment. For example, (a) the use of electric powered vehicles in the delivery supply chain has the potential to reduce CO2 emissions (Nealer, 2015); and (b) using recycled cardboard or materials that are biodegradable would reduce landfill waste. This paper examines the potential benefits of these green practices in the delivery supply chain. Our results are that a case can be made for use of electric-power vehicles and their potential benefit to reduce CO2 emissions in an environment where power generation in non-coal based. In other words, using electric cars in all delivery supply chains isn’t always a solution; firms must recognize the significant impact of the power generation process in their operating area. From a packaging perspective, there is documented consumer interest on using environmentally friendly material for consumer products. However, depending upon the market segment size, this might not always result in better financial outcomes for companies. Introduction Companies that build sustainable operations realize not only immediate benefits but this also results in an impetus to enhance future applications of sustainability (Berg et al, 2015). One of the drivers of these benefits is an emerging consumer base focused on not only the product they are buying, but also the manufacturing process used (Brackley, 2017). In general, these consumers would prefer that the environment isn’t adversely affected in the production and delivery employed for purchased goods (Dhar, 2010). It is well documented that consumer tastes are constantly evolving, and with this comes new opinions, beliefs, and practices. Millennials, currently have the largest spending power out of any generation (Shroeder, 2017). With this large influence on the market, companies target this generation in hopes of aligning with some of their beliefs. According to Landrum (2017), this generation values corporate social responsibility, sustainable manufacturing and ethical business PAXTON SHAMLOU, ASOO J. VAKHARIA University of Florida | Journal of Undergraduate Research | Volume 20, Issue 2 | Winter 2018/2019 standards. In order to determine the best strategies for targeting the “millennials” market segment, the “America@250” initiative provides some useful anecdotal evidence (Mahler, 2017). For example, utilizing a series of focus groups, Mahler (2017) notes that millennials prefer consumer brands that have a status, or advertise the lifestyle of preference. An additional dimension of interest for millennials is that they do not only negatively view fossil fuel (CO2) emissions stemming from their own vehicle use, but also for vehicles used to transport the products to the market. In summary, due to an increasing realization of lifestyle choices on the environment, more and more consumers began are favoring sustainable companies since 90% of consumers are “. more likely to purchase products from a company that is making changes with the goal of improving sustainability” (Sons, 2017, p. 2). According to a Nielsen (2015), six of the top eight consumer purchasing drivers of global consumers focus on some aspect of sustainability. For example, at least 30% of global consumers are driven by product content (primarily organic content), environmentally friendly and socially acceptable brands, and brands offered in environmentally sustainable packaging. An interesting additional finding was that among all global consumers driven by sustainability drivers, at least 40% were willing to pay a premium for environmentally products. Given this change in customer preferences towards sustainability, what is the business response? Although most firm understand that Corporate Social Responsibility (CSR) is vital for a company’s image and reputation management (Du et al, 2010), they often fail to notice the monetary benefits that also come with adopting sustainable principles. This has motivated many companies to be are “more active than ever in pursuing sustainability to align with values and engage stakeholders” (Bove, 2017, p. 1). In order to reap the greatest benefits from sustainable practices, Bove (2017) proposes that businesses: (a) align sustainability strategy with business strategy; (b) enhance governance for better results; and (c) embed sustainability into business functions. These observations motivate the focus of this research paper. On the one hand, we have a consumer market with distinct preferences for sustainability and individuals also willing to pay more for environmentally friendly alternatives while on the other hand, we have firms struggling to identify the best strategies for serving the “green” consumers more effectively. In order to focus our attention, we consider the following two issues for the delivery supply chain: Are CO2 GOING “GREEN” IN THE DELIVERY SUPPLY CHAIN: EVIDENCE AND INSIGHTS _________________________________________________________________________________________________________ University of Florida | Journal of Undergraduate Research | Volume 20, Issue 2 | Winter 2018/2019 emissions reduced through the use of electric vehicles? and; Are there positive environmental impacts stemming from the use of “green” packaging? The remainder of this paper is organized as follows. In the next section, the research methodology is described and this is followed by a discussion of the key results and managerial insights stemming from our findings. Finally, summary conclusions, implications, and guidelines for future research are discussed. Research Methodology The methodology we thought best fit to investigate the two aspects of interest was to utilize secondary data since there is an abundance of data available. Of course, we also apply a set of appropriate set of criteria to select such data for improving research validity and reliability of our findings.0F1 To delve deeper into the subject, secondary data from online and library sources was collected. These resources were used to try and identify variables that could address the purpose of our research questions. Reliability of the sources is enhanced by adopting a holistic approach in analyzing both qualitative and quantitative findings. More specifically, our research investigation of the delivery supply chain evaluates two specific hypotheses: 1. CO2 emissions are reduced through the use of electric vehicles; and 2. There are positive environmental impacts stemming from the use of “green” packaging. The overall goal is to propel companies toward “green” supply chain management. Hence, we show that sustainability is not simply a public relations or CSR tool, but also leads to reductions in emissions, waste, and pollutants. Simultaneously, companies can realizes positive financial outcomes by adopting these sustainability practices. Findings and Insights The discussion in this section is organized around the two research hypotheses investigated in