Logistics planning for different products

Our logistics planning is tailored to the nature of the final products to be transported. For relatively bulky products, we reduce the transport mileage and the resulting environmental impact by maintaining regional production sites. This applies especially to our laundry detergents and household cleaners, and to some cosmetics and adhesives. More compact products with a low specific weight make fewer demands on transport, so we produce them centrally in large quantities wherever possible. Our instant adhesives, for example, are produced at just a few sites worldwide.

Emissions reduction initiatives

Throughout Henkel we are working to optimize our logistics structures and concepts in order to reduce our transport emissions. The location of warehouses and distribution centers should minimize the distance between our sites and our customers. Wherever possible, we combine transports between individual sites and to central warehouses in order to reduce transport mileage across the entire Group.

To this end, the Adhesive Technologies business sector decided to reduce the number of warehouses in South Africa from eleven to one. The Laundry & Home Care business sector has already successfully put a fully automated warehouse into operation next to our site in Perm, Russia. Thanks to its compact design, this facility uses around 40 percent less energy every year than a conventional warehouse. The warehouse’s location next to the production site saves about another 500,000 transport kilometers per year, which is equivalent to roughly 360 metric tons of carbon emissions.

We also cooperate with retail partners and suppliers of other products to increase truck capacity utilization. The Beauty Care business sector, for example, works together with its strategic logistics service provider and customers to optimize truck capacity utilization and so lower carbon emissions. In Europe and the USA, in particular, we aim to transport more and more goods by rail rather than by road. We consider logistics as early as the product development stage. Concentrates and lighter packages reduce transport weight and hence carbon emissions.

Area Activity
Logistic structures
  • The switch to rail of cosmetics transports for the German market that was begun in 2010 has been further expanded. Instead of five rail cars per day, we now have eight cars traveling daily on the route from the production plant in Wassertrüdingen, Bavaria, to the intermediate warehouse in Monheim, North Rhine-Westphalia. This has reduced the road traffic by more than 20 trucks per day.
  • Intermodal transports: Since 2008, we have been working with European logistics partners to gradually build up our intermodal transport routes. The transports of our cosmetic products to Great Britain, for example, have also been covered by the best combination of rail and road since 2011. In the USA, too, we are increasing the proportion of intermodal transport routes.
  • Increasing location of supplier companies "wall to wall" with our own factories avoids transports. 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.
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.
  • Centrally coordinated logistics purchasing and grouping of the transport consignments of neighboring Henkel sites increases shipment weight and therefore truck capacity utilization. For example, the grouping of warehousing activities of Schwarzkopf and Henkel – i.e. the institutional soaps and the laundry detergents businesses of Dial – in the USA has reduced the number of empty runs and partial truck loads.
  • Logistics-oriented granting of discounts, i.e. achieving savings through efficient order quantities. Here, manufacturers and retailers share whole or half truckloads, for example. Such systems were successfully introduced in 2010 and plans have already been made to roll them out across Europe in the next two years.
  • We aim to cooperate with our retail partners to identify potential for improvements, and therefore participate in, for example, 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 in a carbon neutral way, it is possible to reduce CO2 emissions by about 20 percent compared to the prior year. Capacity utilization of trucks is also a major lever for reducing carbon emissions. By analyzing orders it has been possible to increase the capacity utilization by up to 25 percent.
Product optimization
  • 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. Example: switch of U.S. liquid laundry detergent brand Purex to a concentrate. Result: avoidance of 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 tonnages to be transported.
Business travel / company car fleet
  • Through technical progress as well as the country-specific definition of efficient reference vehicles and the fixing of upper limits for carbon dioxide emissions when ordering new cars, we have been able to continuously reduce the carbon emissions per kilometer for some years now for newly registered company cars.
  • The absolute amount of carbon emissions caused by our company car fleet was 5 percent lower in 2011 than in 2010. The main reason for this was a reduction of some 450 cars in the overall fleet.
  • For the Infrastructure Services department of the Düsseldorf site, seven utility vehicles with electric drives were purchased in mid-2012. Due to the combined heat and power design of the Henkel power plant at the 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.
  • Since 2010, the total monthly costs of a car have been broken down into the company fraction and the employee's own contribution. By increasing the transparency of the fuel costs incurred every month, we want to encourage our employees to drive more efficiently.
  • Guidelines for replacing business and airline travel by video and telephone conferencing.

Requirements on our logistics partners

Worldwide, more than 90 percent of the transport of our products from the production site to the warehouse, and from the warehouse to the customer, is now carried out by external logistics companies. When selecting our transport partners, we consider their efficiency and environmental performance. Since 2010, our purchasing departments have been incorporating corresponding criteria in their inquiry processes and invitations to tender for logistics services. These include the definition of energy-saving targets, measures for modernizing vehicle fleets, and investments in programs for optimizing routes and determining emissions.

Overall picture: Our operational carbon footprint in 2012

Henkel’s own carbon dioxide emissions are primarily caused by energy generation and consumption. Other carbon emission sources are not relevant for our business operations. The same applies to emissions of other greenhouse gases. They account for less than one percent of the Scope 1 and Scope 2 emissions. Scope 3 emissions, especially those associated with raw materials and product use, are calculated at the product level.

Last updated: March 6, 2013