Global Logistics and Supply Chain Strategies - March 2008 - (Page 38)

makes sense from a service perspective,” he says. “From a carbon footprint standpoint, it’s a huge improvement over throwing another truck on the road.” Lean and Green As corporate sustainability strategies take hold, modal choice will just be one of many operational decisions in which carbon contributions will play a role. “We are beginning to have conversations with customers about understanding and mapping out their carbon footprint,” says Andres Kinder, director of marketing for supply chain solutions at Infor, an enterprise software provider based in Atlanta. “They want to see where they can reduce their carbon footprint without impacting profit. I think it will be an important topic over the next few years.” The good news, again, is that efforts toward a more efficient and lean supply chain often have green benefits. “I believe there is a direct correlation between supply chain efficiency and carbon efficiency,” says Jonathan Wright, a London-based senior manager in Accenture’s supply chain practice. “Lean does equal green.” “An efficient supply chain that is designed to minimize waste and improve velocity, inherently should also be a green one,” agrees Kinder. But he warns that there is a curve of diminishing returns. “As you move further toward minimizing carbon, you will reach a point where costs go up,” he says. “That’s why companies will need to start modeling their supply chain from a cost and carbon perspective.” Kilgore notes that trade-offs will become more difficult as companies grab the low-hanging fruit. “When you start to dig down on these energy efficiency and green opportunities, there are still enough of them out there that it’s pretty easy to have a positive ROI,” he says. “Even today, though, you could have a positive ROI on a green initiative that still might not deliver as much ROI as another opportunity in the supply chain. The trade-offs will get harder as time goes on.” Companies need someone specifically focused on reducing the carbon footprint and the right decision support tools to get the best results, he says. Whirlpool and Stonyfield Farm are two companies firmly committed to this path. Whirlpool first established a corporate office for environmental control in 1970. “As a company, we recognized that our products use a lot of water and energy and “Converting truckloads to intermodal is a priority for where it makes sense from a service perspective.” — Matt Menner of Transplace of railroads, can reduce friction by close to half, Stehly says. “You don’t want to reduce it by too much or the locomotive will have difficulty pulling the train,” he says. Another interesting innovation at BNSF is aimed at reducing the aerodynamic drag caused by gaps in intermodal trains. The railroad is cutting eight feet out of the center of existing 48-foot well cars so that they hold 40-foot international containers without a gap. “With international trade growing, we need more wells for 40-foot containers,” Stehly says. This move not only reduces drag but also cuts weight, for even greater fuel efficiency. “Most people don’t realize that on our heavily traveled lane between Chicago and Los Angeles, we have to lift all that freight a total of 25,000 vertical feet, so taking weight out is actually a big item.” This change costs BNSF in terms of flexibility of its intermodal fleet, he says, but the savings are worth it. Intermodal Strategy Moving more freight off the road and onto rail intermodal is a fuel and emissions saving strategy on its own and, as such, is one of SmartWay’s core goals. For long distances, EPA says, rail intermodal can cut fuel use and greenhouse gas emissions by 65 percent compared with truck-only moves. Logistics provider Transplace improved its use of intermodal by 25 percent last year over 2006, says Menner. “Converting truckloads to intermodal is a priority for where it 38 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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