Global Logistics and Supply Chain Strategies - March 2008 - (Page 42)

big advocates of taking a step back and looking at the whole supply chain. Otherwise you may end up putting your efforts in something that may be good public relations but of little impact.” After calculating a baseline carbon footprint, LLamasoft’s simulation and optimization model analyzes the existing supply chain network and potential changes, Hicks says. “Our type of solution basically drains the blood from decision making by putting numbers behind it,” he says. “We turn it into a math problem and come up with an answer that tells you not only the dollar cost and service implications but also the carbon impact.” The ability to include a carbon calculation is being added to new versions of Supply Chain Guru at no additional cost, Hicks says. Looking ahead, the LLamasoft tool also includes carbon offsets as a decision variable. While the market for offsets today is still developing and “looks a little like the Wild West,” Hicks believes that offset purchases will become part of some companies’ strategy. “Our solution will optimize the use of Helpful Resources Don’t know where to begin when it comes to understanding your company’s carbon footprint? These web sites provide useful information and basic calculators: • www.epa.gov/smartway/ • www.cdproject.net/ • www.ghgprotocol.org • www.carbontrust.co.uk/publicsites/CFCalculator/ • www.climatetrust.org/content/calculators/Business_&_Org_Calculator.pdf offsets based on a company’s carbon goals and the world market price,” he says. TransGroup Worldwide Logistics, Seattle, Wash., already offers a carbon offset service that it believes is unique in the market. Its optional TransNeutral program uses a weight-based calculation to determine the amount of CO2 that shipments emit, then offsets that with a contribution to emission reduction programs through the Chicago Climate Exchange (CCX), thus enabling customers to neutralize the carbon impact. Participating customers can monitor the offsets associated with their shipments through a quarterly report from TransGroup. “TransNeutral is simply a convenient and effective way for our customers to mitigate the climate-affecting impact that their shipments have on the environment,” the company says on its web site. Carbon offsets are very popular because they are an easy way out,” says Blanco. “They can be a valuable strategy but they should not be a company’s main strategy. They should not be used to avoid looking at the hard decisions.” Infor also has added a carbon calculation to its network design tool. “Carbon footprint measuring is still an early science,” says Kinder. “We use the values out there for different modes of transport and different tonnage weights of products, standards that have been published by government agencies, independent benchmarks from respected sources and a little intellectual property that we have built in.” In the next release of its solution, in April, “all of those values will be built in as background tables, so a company with very little knowledge of its carbon use will be able to key in some values from their supply chain and get a pretty good estimate—a place from which they can start working to reduce their carbon impact. The first step is for companies to appreciate the opportunities and challenges and this tool enables that.” Adding carbon calculations to network optimization may eventually change some critical supply chain decisions. “I think we could see more manufacturing coming back on shore so that product is transported shorter distances,” says Kilgore. “But there are many factors impacting that, such as the weakening dollar.” “We already see some organizations favoring near-shoring rather than offshoring,” says Kinder. “We can’t definitively say that this trend is being driven by green 42 MARCH 2008 http://www.epa.gov/smartway/ http://www.cdproject.net/ http://www.ghgprotocol.org http://www.carbontrust.co.uk/publicsites/CFCalculator/ http://www.climatetrust.org/content/calculators/Business_&_Org_Calculator.pdf

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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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