Logistics and transport
Production and logistics planning depends on the products being transported. For bulkier products, we reduce transport mileage and environmental impact by operating regional production sites. Compact products make fewer demands on transport, so we produce them centrally whenever possible. Meanwhile, many industrial adhesives are produced close to customers’ production sites.
IT solutions for logistics planning
With the new Transport Management System ONE!TMS, we have introduced a Group-wide IT solution for more efficient handling of our transport planning across all business units and countries. Higher space utilization and optimized routes decrease the transport mileage, reduce fuel consumption and thus diminish CO2 output. In 2015, ONE!TMS was implemented at sites in the Benelux countries, Spain, Slovenia, China and Taiwan.
To demonstrate our progress, it is especially important to systematically record the CO2 emissions of our logistics operations. In 2015, we prepared our systems prior to introducing a new instrument, EcoTransIT World, which determines the environmental impact of transports by all transport modes on the basis of the DIN EN 16258 standard. This system will be implemented as of 2016.
More information about EcoTransIT.
Emissions reduction initiatives
We optimize our logistics operations in order to reduce transport emissions. We position warehouses and distribution centers to minimize the distance between our sites and our customers. Wherever possible, we combine shipments between individual sites and warehouses.
In line with our global Supply Chain organization, we have developed programs to reduce emissions that use synergy potentials across business units.
Our Laundry & Home Care and Beauty Care units, for example, have established a mega warehouse concept in North America, where a few main distribution centers store products until the required quantities are due for on-time delivery to regional warehouses and retailers. This saves 320,000 kilometers in transports and around 380 metric tons of CO2 each year.
In another initiative, the two business units began hiring pallets instead of buying them, which resulted in more efficient collection and improved handling of damaged pallets. Laundry & Home Care has rolled out this concept across Europe and is thus avoiding another 480 metric tons of CO2 and 900 metric tons of waste wood every year.
Adhesive Technologies is reducing emissions by optimizing express and airfreight services. The resulting improvements along the value chain will save around 1,500 metric tons of CO2 annually as of 2016.
Overall, we intend to reduce our logistics emissions by around 5 percent over the next five years.
Our ambition is powered by a consistent reporting tool and a cross-business unit approach for Sustainability in Logistics.
Our four major drivers:
- Warehouse (WH) footprint optimization (global WH projects across all business units
- Transport optimization (e.g. pallet space / packaging optimization across business unit)
- Expansion of intermodal transportation
- Collaboration with providers ( e.g. joint scalable projects for reduction in carbon footprint)
Overall picture: our operational carbon footprint in 2015
Requirements on our logistics partners
We take efficiency as well as environmental and safety performance into account when choosing our transport partners. Relevant criteria are included in our request for proposal processes and tenders for the purchase of logistics services. These include energy-saving targets and measures for modernizing vehicle fleets.
Additional measures to improve the impacts of logistics and transport:
- Direct trains: We have enhanced efforts, which began in 2010, to shift the transport of cosmetics in the German market from road to rail. In addition to the goods produced for the German market, the German direct train now also transports the goods produced for the Benelux countries, for Great Britain and for overseas export. Instead of five rail cars daily, we now use 10 cars on the route from our production site in Wassertrüdingen, Bavaria, to our central warehouse in Monheim, North-Rhine-Westphalia. This translates into taking 60 trucks off the road each day (as of 2015). In order to use the train route in the other direction as well, we have been transporting raw materials produced at our plant in Düsseldorf with the same train back to Wassertrüdingen since 2015. As a result, we replaced the daily round trip of three road tankers, which translates into avoiding more than 600 road tankers per year.
- Intermodal transport: Intermodal transport combines at least two modes of transport. At Henkel, this also means that more transports are shifted from road to rail: A truck transports the goods to the nearest railway loading terminal. Next, the long distance is travelled by train. A second truck collects the goods at the destination terminal and delivers it to the recipient.
In the USA, our Laundry & Home Care and Beauty Care business units already use intermodal transport for 40 percent of their transports from production plants to warehouses. Adhesive technologies uses intermodal transport as well – in particular to restock warehouses – and could take around 150 trucks off the roads in the USA in 2015. Since 2008, we have been working with European logistics partners to gradually build up our intermodal transport routes. For example, through our intermodal route from German plants and warehouses to Milan, Italy, we managed to take around 380 trucks off the road each year since 2011. By using intermodal transport between the Henkel plant in Maribor, Slovenia, and the central warehouse in Monheim, Germany, we were able to take around 480 trucks off the road in 2015. Our present analyses show potential for the roll out of intermodal routes in Greece and Scandinavia. In 2016, we will start to systematically test the applicability of intermodal transport to all routes throughout the company.
- In 2015, the electronics business of Adhesive Technologies began replacing Styrofoam coolers used to transport heat-sensitive products with reusable, thermal containers. The new containers reduce the carbon footprint by 75 percent and waste per container by 95 percent. These savings come from not using dry ice and thermal corrugate packaging. Instead, the new process uses something similar to a cooler with frozen panels inside to keep the material frozen. Because the cooler is reusable, we can avoid the disposal of the former Styrofoam coolers as well as the dry ice they used. The project is currently being implemented at selected sites in North America and we are looking to further expand this process.
- Efforts to position suppliers “wall to wall” with our own factories helps to avoid transport. This applies especially to the relocation of production facilities for packaging materials directly at our sites. Examples include our sites in Hazelton, Pennsylvania, USA, and Levice, Slovenia, where manufacturers of plastic packages have set up their operations directly alongside our factories or those of our toll and contract manufacturers. Similarly, co-packaging of our laundry detergents for Eastern European has also been taking place directly at our central warehouse in Vienna, Austria, since 2011.
- We are upgrading to more efficient logistics equipment, for example by replacing some diesel-powered forklifts with electric ones.
Synergies / cooperation
- Expansion of pooling activities, i.e. targeted grouping of transports and storage of similar product categories together with those of other suppliers at the same logistics service provider’s facilities. This generates synergistic effects in storage, order picking and transportation, thus ensuring that only fully loaded trucks travel to the central warehouses of our customers, while significantly reducing the number of empty runs. Henkel has already implemented such pooling strategies in Belgium, the Czech Republic, the UK, and the Scandinavian countries.
- We aim to cooperate with our retail partners to identify potential for improvements, and therefore participate in initiatives such as the European Efficient Consumer Response initiative.
- Together with the logistics service provider Cretschmar Cargo, Henkel Beauty Care in Germany is working to make its logistics operations greener by upgrading the fleet and training drivers to drive efficiently.
- Capacity utilization of trucks (e.g. consolidating deliveries to the same destination) is also a major lever for reducing carbon emissions. By analyzing orders it has been possible to increase capacity utilization by up to 25 percent.
- We work on product optimization in terms of weight and volume, provided this is possible without compromising the performance, convenience and stability of the packaging. Concentrates and lighter packages reduce transport weight and hence carbon emissions. An Example: switching U.S. liquid laundry detergent brand Purex to a concentrate resulted in avoiding about 17,000 metric tons of carbon dioxide emissions from transport operations per year thanks to reduced product volume.
- The introduction of a review stage in marketing decision-making processes reduces complexity in our product ranges. For example, the use of base formulations and similar packaging materials for different brands and countries has resulted in less material usage and less waste, as well as reducing the tonnage transported.
Business travel / company car fleet
- We have developed guidelines for replacing business and airline travel by video and telephone conferencing.
- Thanks to technical advancement, the definition of country-specific reference vehicles, and the creation of CO2 limits for new car orders, we have continually reduced the carbon emissions per kilometer of newly registered company cars for our sales force in recent years.
- Since mid-2012, Henkel has purchased a total of 20 utility vehicles with electric drives for the Infrastructure Services department of the sites in Düsseldorf, Italy and Japan. Charging stations were installed for these vehicles. Due to the combined heat and power design of the Henkel power plant at the Düsseldorf site, the carbon emissions resulting from energy generation to charge the vehicle batteries are just 40 grams per kilometer (compared with 80 grams per kilometer for electricity from the public grid) or 120 to 180 grams per kilometer for gasoline engines.
- In 2014, we started a project with the aim to establish more low-emission cars in our fleet policy. Based on a decision in 2015, a pilot project will be started in 2016 in Germany. This means that utility vehicles with electric drives will be available for order for our managers, given the driver profile satisfies certain requirements. Furthermore, the project team will examine the extent to which electric vehicles can also be used in other countries.
The Adhesive Technologies business unit has initiated a global road safety campaign for its field sales staff. A range of interactive eLearning modules was developed to raise awareness for safe driving. Accessible worldwide, it was used by nearly 1,000 employees in 2015. In safety-related team discussions, field sales managers personally convey the importance of this topic to their teams as well. The global training portfolio also includes practical road safety training sessions where needed.