Product category:
Supply chain planning and execution software
News Release from: Barloworld Optimus | Subject: Supply chain software
Edited by the Manufacturingtalk Editorial
Team on 18 May 2007
Supply chain impact on the environment
Ignoring environmental impact of the supply chain lets down shareholders according to Barloworld Optimus
Companies are shirking their environmental responsibilities and letting down their shareholders by ignoring the impact of their supply chain on the environment and missing significant opportunities to simultaneously reduce their carbon footprint and their supply chain costs, Barloworld Optimus said today "For many companies, environmental initiatives are a means to achieve positive publicity through cutting costs," asserts Ewan French, COO Network Design at inventory and supply chain planning specialists Barloworld Optimus
This article was originally published on Manufacturingtalk on 28 Feb 2007 at 8.00am (UK)
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"Measures such as introducing fleets of hybrid trucks are positive steps, but the benefits to the environment are negligible considering that over 80% of carbon savings are only achievable at the supply chain design stage".
Companies cannot simply make sweeping changes to their supply chain and promote themselves as being environmentally friendly, without first planning and understanding these changes properly.
Unfortunately for most companies, simple operational changes alone will not be enough.
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Organisations need to analyse their entire supply chain strategy and ensure that it is designed not only in terms of the traditional levers of cost and service level, but also in terms of carbon emissions.
"The supply chain, however much businesses try to ignore it and pretend it is somebody else's problem, is a key area where they can reduce carbon emissions significantly," explains French.
"Relocating warehouses, increasing sea transport and switching distribution centre configurations are moves that will have the greatest impact on carbon emissions overall".
It is time for companies to wake up to the environmental impact of their supply chain and take responsibility for it.
However in a recent survey of companies in the UK, Germany, the Netherlands and Spain, AMR Research reported that only 8% of respondents said they were already involved in initiatives to make shipping and transport more efficient, or were planning such measures within the next 12 months.
Considering that the Kyoto Protocol has called for a 60% reduction in carbon emissions by 2050 and, in the UK at least, emissions actually increased by 1.5% last year, serious action needs to be taken now.
Reductions in electricity consumption, paperless offices and fleets of hybrid trucks are measures that are relatively easy to implement and generate measurable business benefits.
However, increasingly environmentally sensitive consumers will soon start to see through this green smoke screen.
The software is already available for companies to analyse the carbon footprint of their supply chains and then evaluate various different design configurations and transport options before needing to make any changes.
By calculating the carbon footprint of any supply chain together with optimal designs based on cost and service levels, companies can often find ways to dramatically reduce costs and carbon emissions at the same time.
"Sourcing goods from across the globe does not appear to sit well with ambitious targets for cutting carbon emissions".
"However despite its complexities, companies must not view the supply chain as an impossible challenge, but rather an opportunity," concludes French.
"By analysing the entire supply chain in terms of cost, service and carbon emissions, companies can achieve a win-win situation".
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