Sustainability Decision making model
This decision making model can help the automotive industry as it’s generically tailored to serve as a step by step thought process.
Which emissions should be measured? What freight should be included in the emissions calculations?
Would freight volume matter in the case of trains and road modes?
Any shipments between sub suppliers in the case of parts or half finished goods that need re-location?
Packaging deliveries in the case of the cargo needs to be covered, containerized or without cover/packaging requirements?
e.g. currently the car industry is moving towards transporting covered vehicles to ensure the vehicles do not encounter any damage especially with rising rates of vandalism on train routs.
Repositioning from one plant to the other? Transhipment? Intramodel? Or any externalities that would affect the transportation and invoke a strategic change?
All these factors must be accounted for when a firm uses the decision model.
- Step one: the company looks at the markets it’s trading with and the request or certification of environmental standards. Once the requirements are made clear.
- Step two: will look at what vehicles are in line as high priority, VIP or normal priority. This stage helps the company asses which batch to put through fast distribution routs, for example, VIP vehicles will go via air freight, high priority will go through sea shipments and/trains, while vehicles that have less priority can be considered to go through slow steaming sea shipments and/or trains.
- Step three: asks the automotive company to see the amount of CO2 allowance each market gives, if any and the amount of CO2 they can afford to give for each distribution strategy. In the case where the CO2 allowance is low then slow steaming could be an option along with electric trains if the distribution is to dealer/customer. Or in the case where the automotive company has enough CO2 allowance then it can use normal shipments and tracks for tricky routs or trains if possible.
- Step four: is a cost benefit analysis to identify what distribution strategy they can afford for each market. Once that is identified the automotive company can then designate the budget, allocate
responsibility and plan the timeline scheduling/lead time.