Global Logistics and Supply Chain Strategies - March 2008 - (Page 30)

Supply Chains Reduce Carbon Footprints and Save You Money BY JEAN V. MURPHY As a major source of energy consumption and carbon emissions, the supply chain is one of the first areas companies look to for savings when they initiate a “green” strategy. The good news is that supply chain efficiency and carbon efficiency often go hand in hand. I n the business world, green definitely is “in.” Whether driven by genuine concern for the planet, spiraling fuel costs, customer and consumer demands or merely the desire to jump on a great PR opportunity, corporations everywhere are beginning to think about their carbon footprint. So far, few have made environmental issues a strategic imperative or key decision variable, “but that is going to rapidly change,” says Mike Kilgore, president of Chainalytics, Atlanta. He predicts that over the next 12 to 24 months, widespread participation in and publicity around initiatives like the Carbon Disclosure Project (see sidebar) will cause companies to aggressively pursue carbon reduction as not only enterprise strategy, but as policy that will drill down into everyday decision making. As that happens, the supply chain will be in the cross hairs. Transportation involved in product distribution represents a significant energy expenditure. And if the supply chain is defined as encompassing manufacturing and procurement as well as logistics—as it is at many companies—it could well be the largest generator of greenhouse gases (GHG). “There are different ways of looking at it, but in every instance, supply chain networks play a fundamental role in corporate carbon footprints; there is just no question about that,” says Dave Miller, chief operating officer at Con-way Freight, Ann Arbor, Mich. The impact is both significant and unavoidable, he adds. “If freight is moving on a vehicle, regardless of mode, it is using carbon-based energy. Transportation is carbon-based and will be carbon-based into the foreseeable future.” That is why companies typically look first to fuel conservation as a way to cut back carbon dioxide (CO2) emissions. Many actually have been attacking this problem for some time in the guise of fuel economy and cost-cutting efforts. Fortunately, steps taken to achieve those goals also have an environmental benefit. “We have been working on emissions reductions for at least 10 years, though not with that stated focus,” says Dennis Damman, director of engineering at Schneider National, Green Bay, Wis. “The goal was to be more fuel efficient, but when you use less fuel, you have less emissions.” Today, both goals are important to the leading truckload carrier. “Environmental considerations now influence what type of equipment and engines we spec, the aftertreatment systems around those engines, the kind of tires we use and more,” Damman says. Pressure to reduce carbon output also is coming from customers. “ I would say that today most of our major customers have as 30 MARCH 2008

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Global Logistics and Supply Chain Strategies - March 2008 Editorial GL & SCS Exclusive FastForward Up Front The Green in Green Think Inside the Box Have a Second Look Can't Happen Here Opinion: Stay in the Black as Your Workforce Fades to Gray Opinion: Four Critical Steps to Managing Change in the Supply Chain Industry Voices

Global Logistics and Supply Chain Strategies - March 2008

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