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Apr

Create a Carbon Neutral Supply Chain

As consumers become increasingly environmentally selective, companies are recognising that they need to optimize their supply chains not only in terms of the traditional levers of cost and service level, but also in terms of carbon emissions. Aggressive carbon targets are being set at board level and logistics managers need to ensure that their supply chains are able to achieve them. Unfortunately for most companies, simple operational changes alone will not be enough and before companies start making sweeping changes to their supply chains, it is critical that they plan and understand these changes properly.

“Obviously the supply chain is an important area where companies can reduce their carbon footprint, but the bottom line is that over 80% of this target is only achievable at the design stage,” was recently stated by a leader in this emerging field. “We have worked with a number of companies on projects designed to analyse and reduce carbon emissions and our software solutions can calculate the carbon footprint of any supply chain together with optimal designs based on cost and service levels.”

Indeed, one of the key challenges for any company bent on reducing their carbon footprint is how to measure it in the first place. There is currently no industry or global standard. However these software models take into account transport and warehousing operations as well as temperature control and intermodal solutions. This comprehensive approach, at the design stage, enables companies to look at a range of supply chain strategies and configurations for minimising carbon emissions.

“Changing patterns in global trade mean companies need to look regularly at their supply chain structure to ensure optimum efficiency. “These modular tools now provide the added functionality for organisations to consider carbon emissions during the network planning process, understand the cost of reducing emissions and make informed choices as to whether reductions in emissions can be made at a reasonable cost.”

Indeed, sea transport is not only the most cost-effective transport method, but is also the least expensive in terms of carbon emissions. While organisations obviously utilize sea transportation from the Far East to Europe, for example, they may not be taking advantage of sea connections that can position goods even closer to their destination. Effective modeling therefore allows companies to evaluate supply chain design configurations and transport options that can reduce costs and carbon emissions at the same time.

One recently completed project for a global organisation saw a significant switch from road transport to sea transport. The result was a 9% reduction in supply chain costs and a 28% reduction in carbon emissions.

Sourcing goods from across the globe does not appear to sit well with ambitious targets for cutting carbon emissions. However by analysing the entire supply chain in terms of cost, service and carbon, companies can achieve a win-win-win situation.

E. French

To learn more about how your firm can calculate the carbon emmissions load of your supply chain and then develop optimized models to begin reducing this load just ASK and we’ll be happy to help you start down the road to increased corporate social responsibility with a more environmentally friendly supply chain.

 Cheers

 Jeff Ashcroft 

Don't forget, by viewing our Twitter profiles you can sign up yourself for free on Twitter and don’t forget to add me JeffAshcroft and also the SupplyChainNtwk site!


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5 Responses to “Create a Carbon Neutral Supply Chain”

  1. SupplyChainNetwork.com » Blog Archive » Creating a Carbon Neutral Supply Chain Says:

    [...] Carbon Neutral SCM [...]

  2. SupplyChainNetwork.com » Blog Archive » In Search of the Carbon Neutral Supply Chain Says:

    [...] Carbon Neutral SCM [...]

  3. SupplyChainNetwork.com » Blog Archive » SCN Newsbrief - April 16th, 2007 Says:

    [...] Carbon Neutral SCM [...]

  4. Nadeem Kamal Says:

    Sir,
    I am a student of Mechanical Engineering and have taken up a project in supply chain and i am interested in Carbon Footprint Modeling & Reduction in supply chains, could you help me with this topic as you have such thorough knowledge of SCN.
    Waiting anxiously for your reply.

    Nadeem Kamal

  5. huub Schoenaker Says:

    An “elevator pitch” for this quesions has its limits, but I hope you understand my point:
    As i4b, logistics management (SCM) consultants, we have developed a methodology to execute CO2 Footprints, starting on company level, evoluating the WOW to processlevel and eventually on product level: of course aiming for structural cost and CO2 reductions. (trade offs etc.)
    We see initiatives on LCA oriented measurement of CO2 (PAS2050 and THEMA1) and Carbon Neutral SC and beleive in the process where we are structurally have to have science to meet logistics. At all levels (University, Branche organisations and Companies) in the Benelux we are working on implementation and development of CO2 Management. (Where and how) can we join our activities?

    Huub Schoenaker

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