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Role of logistics performance in
the achievement of the SDGs
Rosario Michel
-Villarreal
Lincoln International
Business School
University of Lincoln, UK
Eliseo
Vilalta-Perdomo
Lincoln International
Business School
University of Lincoln,
UK
Ricardo Thierry Aguilera
Tecnológico
de Monterrey
Mexico City, Mexico
IISE Annual Conference & Expo 2019
May 18-21 2019, Orlando, FL
Content
Description of the problem
Research question
Logistics Performance indicator
Findings
Discussion
Description of the problem
•In 2015, the Sustainable Development Goals (SDGs) were adopted by all the
United Nations member states as part of the UN Agenda 2030.
•The SDGs call for collective action by all countries to achieve sustainable
development by 2030.
•The 17 SDGs can be measured with 304 indicators included in the assessment
framework to monitor progress, inform policy and ensure accountability of all
stakeholders.
•In 2018 the Sustainable Development Solutions Network presented the SDG Index
and Dashboards report. The result show that:
•no country is in track to achieve all the SDGs.
•achieving the SDGs requires deep transformations of education systems, healthcare, energy
use, land use, urban planning, and deployment of information technologies.
•As logistics is embedded within many of our systems, changes in logistics performance may be
necessary to achieve the SDGs.
Research question
Is there a correlation between the SDGs and logistics performance?
Methodology
•To carry out this research, we used secondary data from the Logistics
Performance Index (LPI) by the World Bank and SDGs scores.
•As data do not fulfil Pearson’s assumptions, particularly the normality
distribution, we used a non-parametric test of association between
two variables.
•Accordingly, data was analyzed using Kendall's tau-b (τb) correlation
coefficient in SPSS®.
Logistics Performance Index (LPI)
•LPI was created to help countries identify the challenges and opportunities they
face in their performance on trade logistics and what they can do to improve their
performance.
•The LPI 2018 allows for comparisons across 160 countries.
•The LPI is based on a worldwide survey of operators on the ground (global freight
forwarders and express carriers), providing feedback on the logistics “friendliness”
of the countries in which they operate and those with which they trade.
•They combine in-depth knowledge of the countries in which they operate with
informed qualitative assessments of other countries where they trade and
experience of global logistics environment.
•Feedback from operators is supplemented with quantitative data on the
performance of key components of the logistics chain in the country of work.
Logistics Performance Index (LPI)
The LPI consists of both qualitative and quantitative measures and helps build a
profile of logistics friendliness for each country.
The international LPI is a summary indicator of logistics sector performance,
combining data on six core performance components into a single aggregate
measure, rated from “very low” (1) to “very high” (5). These are:
•The efficiency of customs and border clearance.
•The quality of trade and transport infrastructure.
•The ease of arranging competitively priced shipments.
•The competence and quality of logistics services.
•The ability to track and trace consignments.
•The frequency with which shipments reach consignees within scheduled or
expected delivery times. This one rated from “hardly ever” (1) to “nearly always”
(5).
Logistics
Performance
Index (LPI)
Best and worst performers
•Germany in yellow
•Afghanistan in red
Sustainable Development Goals, SDG
•The 2018 global SDG Index and Dashboards provides a
comprehensive assessment of distance to targets based on the most
up to date data available covering all 193 UN member States.
•This year’s report includes 88 global indicators and 111 indicators for
the Dashboard for OECD countries.
•The main new feature this year is the inclusion of trends at goal and
indicator level.
•This year’s report also incorporates a number of new indicators to fill
data gaps.
Sustainable Development Goals, SDG
•The 2018 global SDG Index and Dashboards provides a
comprehensive assessment of distance to targets based on the most
up to date data available covering all 193 UN member States.
•This year’s report includes 88 global indicators and 111 indicators for
the Dashboard for OECD countries.
•The data included a mix of official and non-official data sources, such
as international Organizations (World Bank, OECD, WHO, FAO, ILO,
UNICEF, other), household surveys (Gallup World Poll), civil society
organizations and networks (Oxfam, Tax Justice Network, other) and
peer-reviewed journals.
Findings
Kendall's tau_b
No poverty
SDG1
.362**
Zero hunger
SDG2
.564**
Good health and well
-being for people
SDG3
.616**
Quality education
SDG4
.489**
Gender equality
SDG5
.403**
Clean water and sanitation
SDG6
.271**
Affordable and clean energy
SDG7
.460**
Decent work and economic growth
SDG8
.548**
Industry, Innovation, and Infrastructure
SDG9
.700**
Reducing inequalities
SDG10
.173**
Sustainable cities and communities
SDG11
.438**
Responsible consumption and production
SDG12
-.507**
Climate action
SDG13
-.136*
Life below water
SDG14
.157**
Life on land
SDG15
-0.056
Not significant
Peace, justice and strong institutions
SDG16
.493**
Partnerships for the goals
SDG17
-.088
Not significant
Summary of the correlations
In green and red SDG
directly related to
logistics issues
Findings
Interestingly, there is significant correlation between almost all LPI and
SDG.
Concerning logistics issues, preliminary results show that:
•a significant positive correlation exists between the LPI and
sustainable development goal 9 (Industry, innovation and
infrastructure).
•on the other hand, a significant negative correlation was noted
between the LPI and SDG 12 (Responsible consumption and
production)
•we will review these and later we will discuss SDG 13 (Climate action).
Discussion
SDG9: Build resilient
infrastructure, promote
inclusive and sustainable
industrialization and foster
innovation •The global share of manufacturing value added in GDP increased from 15.2 per cent
in 2005 to 16.3 per cent in 2017, driven by the fast growth of manufacturing in Asia.
•Globally, the carbon intensity decreased by 19 per cent from 2000 to 2015—from
0.38 to 0.31 kilograms of carbon dioxide per dollar of value added.
•In 2015, medium-high- and high-technology sectors accounted for 44.7 per cent of
total manufacturing value added globally. The value added reached 34.6 per cent in
developing economies, up from 21.5 per cent in 2005.
•By 2016, the proportion of the population covered by a third generation (3G) mobile
broadband network stood at 61 per cent in the LDCs and 84 per cent globally.
•One of the indicators used to evaluate SDG9 involves the LPI. This might explain why
the correlation is so high.
Discussion
SDG12: Ensure sustainable
consumption and production
patterns
•The per capita “material footprint” of developing countries grew from 5 metric tons in
2000 to 9 metric tons in 2017, representing a significant improvement in the material
standard of living. Most of the increase is attributed to a rise in the use of non-
metallic minerals, pointing to growth in the areas of infrastructure and construction.
•For all types of materials, developed countries have at least double the per capita
footprint of developing countries. In particular, the material footprint for fossil fuels is
more than four times higher for developed than developing countries.
•By 2018, a total of 108 countries had national policies and initiatives relevant to
sustainable consumption and production.
•According to a recent report from KPMG, 93 per cent of the world’s 250 largest
companies (in terms of revenue) are now reporting on sustainability, as are three
quarters of the top 100 companies in 49 countries.
Discussion
SDG13: Take urgent action to combat climate change and its impacts
Is there a strong correlation between logistics operations
and climate change?
Correlation = -.136*
Discussion
SDG13: Take urgent action to
combat climate change and its
impacts
•As of 9 April 2018, 175 Parties had ratified the Paris Agreement and 168
Parties (167 countries plus the European Commission) had communicated
their first nationally determined contributions to the United Nations
Framework Convention on Climate Change Secretariat.
•In addition, as of 9 April 2018, 10 developing countries had successfully
completed and submitted the first iteration of their national adaptation
plans for responding to climate change.
•Developed country Parties are mobilizing $100 billion annually by 2020 to
address the needs of developing countries in the context of meaningful
mitigation actions.
Discussion
SDG13: Take urgent action to combat climate change and its impacts
Are these the only
impact of logistics
activities?
Conclusions
•Logistics activities are closely related with the
achievement of the SDGs.
•Some of the correlations deserve further exploration.
For instance, SDG2 (zero hunger), SDG3 (good health
and well-being for people), SDG8 (decent work and
economic growth) and SDG11 (sustainable cities and
communities).
Conclusions
•There is a significant negative correlation between LPI and SDG13
(Climate change).
•This suggests that in more developed countries, as LPI increases less
progress towards the SDG13 is shown.
•However, it is important to notice that the correlation is not as high as
expected (-0.136), and the level of confidence (0.05) is not as good as
in the other cases (0.01).
Conclusions
•It also might be the case that some of the countries’ behaviours are
affecting others’ performances. For instance, big economies that are
not contributing with effective actions against climate change, may
impact the outcome of more conscious countries with smaller
economies, or simply poorer.
Country LPI
(value)
LPI
(position)
SDG
(value)
SDG
(position)
SDG13
(value)
SDG13
(position)
China 3.61 26 70.1 54 69.3 131
Germany
4.20 1 82.3 5 88.1 54
Norway 3.70 21 81.2 7 62.2 136
USA 3.89 14 73 36 65 134
Yemen 2.27 129 45.7 141 95.9 1
Conclusions
Additional research seems to be required concerning issues such as:
•Are we properly evaluating the impact of logistics activities and SDG?
•Are new logistics technologies in transportation enough to deal with
climate change?
•Are disruptive technologies such as logistics 4.0, enough to deal with
climate change?
•Is there something else that we are not aware of? Is maybe the need
for a change in the way we behave as producers and consumers?
Limitations to this research
•Additional research is required in terms of SDG13 and how is it
evaluated.
•Other LPI and SDG might also be considered as related apart from the
ones considered in this case.
Thanks for your attention