As the world is facing climate change, leaders of different countries have proposed plans to tackle it by making changes to their industrial and business processes. Plans include changing the existing projects to green and sustainable and changing the means of transportation which lead to greenhouse gas emissions and less dependence on non-renewable energy resources. Companies are advised to use and find alternative means to contribute to national and global goals. Canada's target is to reduce emissions by 40-45% of what they were in 2005 up to 2030 and committed to reaching net zero emissions by 2050.

Arne Wohlschlegel, Managing Director of Seimens Energy has discussed with Jacob Irving, President of the Energy Council of Canada related to this matter to accelerate the energy transition in Canada and look at examples from other countries to implement as a model.

Acting upon it, Seimens Energy has decided that its Woodfibre LNG will be operated by renewable hydroelectric power which will reduce its greenhouse gas emissions by more than 80%.

Siemens energy is facing the problem of a long lead time to deliver the products to the customer, and they are working on the Make to Order (MTO) process. The cause of lead time is increased demand after the pandemic and they do not have enough transportation equipment and infrastructure to meet that demand, due to which they have to keep the inventory for long period costing them inventory carrying costs.

So, the sponsor has trusted our team to find out a sustainable alternative and option for meeting the demand and reducing the lead time and save their cost. As they are short on Transportation infrastructure, so they could not invest in Transportation equipment like trucks. Our analysis will be based on different providers of 3PL logistics services which will do transportation of their products to Manitoba and British Columbia using green initiatives. Also, we would look at modes of transport and do their analysis about less pollution emission mode and which would take less time and save their transportation cost.

Seimens Energy is delivering their products from pickering, Ontario to British Columbia and Manitoba.

Sales team sends quote - 2 weeks

Customer places order - 3-4 weeks

Sales team provides lead time advisory 45 weeks

Customer orders 10-14 units per month

One trailer capacity 3 to 6 units

Current state - 1.35$ per mile

Q1: What is the transportation cost and how can we reduce the transportation cost? What is the reliable and cheapest transportation mode for the company to reduce the lead time and transportation cost?

Q2: If the company handover their shipping services to 3PL, what are the pros and cons to the company? What is the impact of the implementation of 3PL?