Three years ago, Jaguar Land Rover’ logistics division began implementing a programme of change to reduce its carbon footprint and cut costs. GreenWise reports on the programme’s success to date.
You might think Jaguar Land Rover
’s first Environmental Innovation Award
for outstanding individual effort would be sitting on the mantelpiece of one of its 'star’ designers in the carmaker’s low carbon
vehicle R&D department. In fact it was handed to inbound freight
manager, Ian McPherson, for developing tools and scorecards to measure Jaguar Land Rover’s freight carbon footprint
. Yes, that’s right, a prize for 'paperwork’, but the innovation has already saved the company 8000 tonnes of CO2 by improving the efficiency of its parts collection. McPherson’s personal achievement is the icing on the cake for Jaguar Land Rover’s logistics
division, which collectively is making great strides to reduce its carbon footprint.
Jaguar Land Rover’s target is to cut fleet CO2 emissions by 25 per cent from a 2008 baseline and to reduce its operational environmental footprint by 25 per cent by 2012 from the same baseline. Logistics falls under operations, which accounts for 10 per cent of the company’s overall carbon footprint. With tailpipe emissions from its cars accounting for a whopping 85 per cent of Jaguar Land Rover’s carbon footprint, reducing these remains the number one priority for the company, but as David Dyke, global material planning and logistics director, explains, transport of parts and vehicles follows not far behind.
"Logistics is almost 22 per cent of our operational CO2," he says. "Site energy use represents the most significant impact [75.3 per cent], followed by transport of parts and vehicles. These are two key focus areas for reducing our operational carbon footprint."
There are two distinct sides to the Jaguar Land Rover’s logistics business: inbound freight, which is the process of getting all the parts to the assembly plants to build the cars, and outbound freight, which takes finished vehicles from the manufacturing sites to Jaguar Land Rover’s 2000 plus dealers around the world. It’s a massive task; the company makes over 3000 collections per week for parts from over 900 suppliers and delivers more than 6000 vehicles per week to over 90 different markets globally.
"In 2009, inbound and outbound freight vehicles covered almost 36 million road miles," Dyke states, "that’s the equivalent of going to the moon and back 150 times or going around the world over 1400 times."
Big tasks bring with them complex problems and in 2008, Jaguar Land Rover Logistics faced a perfect storm. "We faced a complicated set of challenges," says Dyke. "Increasing CO2, fuel costs, legislation, increasing supply base and the need to raise awareness [about sustainability].
"We decided early on we needed a holistic approach to these challenges as single actions would not deliver the kind of 'stretch’ targets we needed to achieve a step change in performance," he continues.
Those targets included reducing CO2 output per vehicle manufactured by 15 per cent by 2012 from a 2008 baseline.
There has been no "silver bullet" to Jaguar Land Rover Logistics meeting its environmental challenges, says Dyke. Instead the business’ holistic approach has led to a number of solutions alongside McPherson’s award-winning tools and scorecards for measuring CO2 emissions.
One of the more obvious ones has been to improve driver efficiency and, working closely with its suppliers, Jaguar Land Rover has implemented a training initiative that has seen 170 truck drivers adopt more fuel-efficient driving techniques. Dyke says the measure has delivered almost a five per cent improvement in fuel economy.
This has been coupled with investment in latest technologies such as vehicle aerodynamic kits, which has reduced the maximum speed of trucks to 53 mph to improve fuel efficiencies (mpg). Dyke says this has led to the UK fleet average mpg increasing on average from 7.8 in 2008 to 9.37 in 2011 – a 16.7 per cent improvement over the three years.
In 2008, Jaguar Land Rover changed its main supplier for UK inbound transport to DHL, which brought about the use of new network planning tools which Dyke credits with "probably having the biggest single impact" on meeting the division’s targets. "In Europe the average miles per trip reduced by 260 miles," as a result of the new tools, he says.
The partnership with DHL also led to another important change to the way Jaguar Land Rover Logistics – and others in the industry – manage their deliveries, with positive implications for freight transport emissions. For the first time, Jaguar Land Rover began sharing deliveries with two other O.E.M's because DHL was able to offer a more efficient service to all three carmakers. The measure has reduced the number of delivery trucks going to a vendor, which previously could be up to four a day. This means CO2 emissions, fuel usage and wear and tear on roads have "drastically reduced" says Dyke.
In 2010, Jaguar Land Rover began trialling new, greener trucks to identify potential savings. Limitations in fill capacity, meant DHL’s 'Teardrop’ trailer did not end up being adopted, however, trials of Cartwrights pioneering 'Cheetah Fastback’ trailer, in which the roof and floor slope at an angle, resulted in mpg improvements and no impact on trailer capacity. Since the trials, DHL have invested in 65 new trailers, which Dyke says will deliver a 2 per cent mpg improvement.
Meanwhile, DHL are improving the loading capacity of their trucks to drive down emissions. DHL are utilising software called 'MAXLOAD’, for example, which enables a driver to measure the trailer and fill on every route. The information is fed back daily to the network planning teams who constantly review and amend routes to optimise vehicle utilisation.
With plans for the business to grow overseas, particularly in China, the need to minimise the environmental impact of logistics in global locations is increasingly important and brings with it "many challenges" admits Dyke. Recent measures to tackle these include deploying a third port in China at Guangzhou, which has reduced vehicle delivery lead times by four days and saved four per cent in CO2 emissions. Adopting an alternative delivery route in Russia, meanwhile, has culminated in a 16 per cent reduction in CO2 emissions.
With more and more of its cars shipped abroad on longer and longer journeys, keeping down costs and emissions from its shipping operations are increasingly critical to the business. Dyke says to this end Jaguar Land Rover Logistics ships with reputable shipping companies, most of which have environmental programmes established. These include companies such as RORO supplier Wallenius Wilhemsen Logistics, which have a well developed environmental strategy, and Danish company Maersk, which earlier this year ordered 10 container vessels, dubbed 'Triple-E’, for their economy of scale, energy efficiency and how environmentally improved they are.
From road to rail
While continually looking to improve its road and shipping freight operations, Jaguar Land Rover is also using 'greener’ modes of transport to drive down emissions and costs. A significant number of vehicles from Jaguar Land Rover’s three assembly plants are now transported by train to the different ports of exit in the UK. This has led to a reduction in road miles of around 3.8 million and offset CO2 emissions by approximately 3.500 tonnes between 2008 and 2010.
There is no mandatory requirement to reduce freight CO2. Indeed, carbon intensity of road haulage actually rose two per cent in the UK in 2009, according to 'Sustainable Business 2011’, a report published in September by ENDS and Forum for the Future.
Instead, the efforts undertaken by Jaguar Land Rover Logistics, says Dyke, have been driven by the belief that the business has a responsibility to reduce its carbon footprint – and with the knowledge that sustainability is not only good for the environment, but for business too.
"Environmental responsibility is both a business and a global imperative," says Dyke. "We have learnt that you have to invest to deliver [it], but without exception the initiatives have and will always deliver cost benefits."
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