GT Ecom’s planet saving business model
When comparing the environmental impact of different shipping methods for a T-shirt from China to Germany, the model which GT Ecom uses compared to other companies (Scenario 1), where the T-shirt is shipped directly from China to the customer, is the most sustainable option. Below is the breakdown of the scenarios and why Scenario 1 has the lowest environmental footprint.
Explanation of the 3 Scenarios:
- Scenario 1 (Direct Shipping from China → Customer, No Unsold Stock):
- The T-shirt is made in China and shipped directly to the customer in Germany.
- There is no warehouse in Germany, and supply is aligned with demand, meaning there is no waste from unsold stock.
- Key Advantage: Products are only produced and shipped when there is demand, preventing overproduction and eliminating waste.
- Scenario 2 (China → German Warehouse → Customer, 15% Unsold Stock):
- The T-shirt is made in China, shipped to a warehouse in Germany, and then delivered to the customer.
- A portion of the stock is pre-produced and stored in the warehouse, leading to 15% unsold items that eventually need to be disposed of (industry average).
- Key Disadvantage: Overproduction and waste contribute significantly to extra emissions.
- Scenario 3 (Raw Materials from China → Production in Germany → Customer, 15% Unsold Stock):
- Raw materials are shipped from China to Germany, where the T-shirt is manufactured and then delivered to the customer.
- Like Scenario 2, some stock remains unsold and is disposed of (15% unsold stock).
- Key Disadvantage: Local manufacturing can be more energy-intensive, and the waste from unsold stock further increases emissions.
Emissions Comparison:
Scenario 1: Direct Shipping from China → Customer (No Unsold Stock)
- Production emissions: 2.5 kg CO₂ per T-shirt.
- Logistics emissions: 0.16 kg CO₂ per T-shirt.
- Total emissions per T-shirt: 2.66 kg CO₂.
Scenario 2: China → German Warehouse → Customer (15% Unsold Stock)
- Production emissions: 2.5 kg CO₂ per T-shirt.
- Logistics emissions: 0.16 kg CO₂.
- Local Transport emissions: 0.06 kg CO₂.
- Waste from 15% unsold stock: 0.435 kg CO₂.
- Total emissions per T-shirt: 3.155 kg CO₂.
Scenario 3: Raw Materials from China → Production in Germany → Customer (15% Unsold Stock)
- Production emissions: 3 kg CO₂ per T-shirt.
- Logistics emissions: 0.16 kg CO₂.
- Local Transport emissions: 0.06 kg CO₂.
- Waste from 15% unsold stock: 0.51 kg CO₂.
- Total emissions per T-shirt: 3.73 kg CO₂.
Conclusion: Scenario 1 is the Best Option for the Planet
- Scenario 1 has the lowest total emissions at 2.66 kg CO₂ per T-shirt, making it the most environmentally friendly option. By eliminating the need for warehousing and unsold stock, this scenario avoids the waste and overproduction that significantly contribute to higher emissions in the other two scenarios.
- Scenario 2 produces 3.155 kg CO₂, which is 18.6% more emissions than Scenario 1, largely due to the impact of unsold stock and additional local transportation.
- Scenario 3 produces 3.73 kg CO₂, which is 40.2% more emissions than Scenario 1, driven by higher production emissions, raw material transport, and the added waste from unsold stock.
In summary, Scenario 1 is the best for the planet because it minimizes waste and avoids the extra emissions associated with overproduction, warehousing, and disposal. The model of GT Ecom (Scenario 1) preventing waste through demand-driven production results in the lowest overall carbon footprint.