Green supply chain

Following the recent United Nations Climate Change Conference in Copenhagen sustainability is becoming an increasingly important management focus. Companies are now proactively looking for opportunities to reduce their carbon footprint and implement greener supply chains. This requires radical thinking and new green supply chain strategies to deliver sustainable solutions that optimise costs and performance. Standards for assessing emissions along supply chains are now available; the requirement is to apply processes and tools that can quickly determine actions for improved sustainability. We have developed Carbon-to-Serve® as a toolset, model and methodology to help companies to focus on their opportunities to reduce emissions and waste. It supports collaboration with other supply chain parties to achieve both short term carbon reduction and alignment of their sustainable supply chain strategies with business goals.

Sustainability in action

Regulation and taxation are increasingly being introduced to drive through carbon reduction goals and deliver sustainable supply chains.

The implication for business is clear; energy inefficiency and emissions performance will carry penalties in the future that will raise operating costs. Green supply chains will also become a point of qualification in both consumer and industrial buying decisions. Relative failure by any business will become a competitive disadvantage and challenge their development.

The published standards for measurement and reporting on emissions place a clear obligation on companies and organisations to take an end-to-end perspective; covering sources of supply at one end and waste disposal and recycling at the other. The requirement is to look across organisational boundaries and be able to measure with trading partners the end-to-end impact.

This requirement poses the question of how a company can make this assessment and model the options?

We have developed and proved the Carbon-to-Serve® methodology which quickly delivers a transparent end-to-end evaluation of the carbon intensity of the supply chain.

A clear visual representation of the supply chain’s carbon footprint and operational elements gives focus on the key drivers of carbon and where the main reduction opportunities are.

The Carbon-to-Serve® methodology links completely to the business and operational context by aligning the environmental impact with operational drivers and cost, to identify both quick wins and long term investment opportunities.

The tool complies with recognised standards such as PAS2050 and ISO 14040.

The Carbon-to-Serve® methodology and toolset

We have developed a three step process:

Compiling and understanding the carbon intensity of the supply chain

The methodology uses visual mapping, data normalisation and plotting of the carbon build up across the chain.

This end-to-end approach, looking across supply chain interfaces, highlights the key areas for focus and the drivers of emissions across the different activities.

Identifying the carbon and cost reduction opportunities

We model the options for supply chain re-design, technology improvement and transport network scenarios. The alignment of carbon with operational cost enables the key trade-offs to be made between cost investment and carbon reduction.

Collaborating with parties along the chain

To understand and realise the carbon and cost reduction potential across all parties in the end-to-end chain.

The high levels of quantification and visualisation from the toolset supports the crucial discussions around co-operation and collaboration.

Carbon-to-Serve® in practice

The Carbon-to-Serve® methodology and toolset has been successfully deployed in numerous industrial environments.

The methodology and toolset focuses on applying business principles to environmental improvements rather than the converse. Our experience to date is that greener supply chains are invariably more cost efficient as waste is removed and resources are better utilised.

Our case studies demonstrate that the methodology:

• complies with recognised standards such as PAS2050 and ISO 14040
• can be delivered in short timescales
• provides end-to-end supply chain scope, consistency and accuracy of data handling and transparency
• delivers business relevance by linking cost and carbon
• supports sensitivity and “what if” analysis

Users include:

An international drinks company

Used the toolset to identify the end-to-end supply chain footprint and the carbon impacts of alternative scenarios such as bottling at source compared to shipping in bulk and the bottling in the final market.

This scenario showed a carbon reduction potential of more than 60%, plus the opportunity to reduce costs and service markets better.

The International Tank Container Organisation (ITCO)

Evaluated a number of chemical transportation carbon footprints and proved a more than 40% emissions benefit from the use of Tank Containers to ship chemicals to and from Asia relative to using steel drums.

It also identified the carbon reduction priority actions for the industry.

The International Air Transport Association (IATA)

Evaluated the environmental impact of the use of airfreight for the supply of organic pineapple pieces from Africa to the UK. This work calculated the full carbon cost of achieving exceptional freshness in stores. It highlighted the importance of taking an holistic view of supply chain performance and modelling the trade-offs between cost, waste, service and carbon.