Evaluation of the Environmental Cost of Integrated Inbound Logistics: A Case Study of a Gigafactory of a Chinese Logistics Firm

Abstract

In recent years, sustainable development has become an emerging trend in the logistics industry. Smart manufacturing factories pursue green logistics processes with lower energy consumption and reduced carbon emission. The environmental sustainability of the logistics process is widely acknowledged as an important issue. However, a standardized methodology for assessing the environmental cost of logistics-process-aided smart manufacturing is lacking. This paper presents a concept for determining the inbound logistics environmental cost (ILEC) of a gigafactory. Additionally, a novel structured methodology for ILEC assessment is proposed to uniformly describe the gigafactory’s logistics environmental cost, regarding the “double carbon” goal (peak carbon dioxide emissions and carbon neutrality). First, eight types of basic logistics activities and six logistics phases associated with the gigafactory’s inbound logistics are defined. The mapping relationships between the logistics phases and the basic logistics activities are constructed. Then, the novel concepts of environmental price cost (EPC) and environmental impact cost (EIC) are defined and presented. Finally, the ILEC of the gigafactory, including EPC and EIC, is assessed based on mapping relationships and an environmental cost model. We validate this model using the advanced Geely Automobile factory in China in order to analyze the actual inbound logistics environmental costs and how to assess its environmental price and environmental impact. Results from the data model show the environmental costs throughout the whole process and the detailed composition ratio of EPC and EIC in the inbound logistics. Based on the implementation of the ILEC model, our study helps gigafactories to identify critical logistics nodes through energy consumption and to measure the environmental performance of the inbound logistics process. Furthermore, our study helps gigafactories to develop practical environmental strategies.