Supply Chain Management Blog : Sustainability

CDP and Supply Chain Carbon Reporting

christianverstraete — Tue, 20 Oct 2009 09:09:00 GMT

Around this time of the year, many companies are looking for the by now famous CDP (Carbon Disclosure Project) report. And the 2009 report is on-line. But that's not the only information available. For the first time CDP has also issued their first...(read more)

How did HP become a "Green" Company?

christianverstraete — Fri, 25 Sep 2009 07:37:00 GMT

On Monday, Newsweek released their inaugural Green Rankings , and interestingly, HP finished at the top. In an article, titled " The Greenest Big Companies in America " they explain they decided to publicize this list to recognize the efforts...(read more)

Carbon Neutral, reality or marketing?

christianverstraete — Tue, 10 Feb 2009 15:36:00 GMT

A couple days ago I received a quick note from one of my colleagues concerning an activity initiated by the UK government, the " Greening Government ICT: Efficient, Sustainable, Responsible ". In this initiative, they aim at making energy consumption...(read more)

Developing Supply Chain Sustainability

christianverstraete — Tue, 20 Jan 2009 13:58:00 GMT

In a previous post , I discussed uncertainty and illustrated it by highlighting the volatility on the Dow Jones . I was reminded of this when I ran into a document PriceWaterhouseCoopers , the accounting firm, released last December. It was titled "...(read more)

Sustainability, don't demotivate us

christianverstraete — Fri, 17 Oct 2008 15:23:00 GMT

In an earlier blog, I mentioned that I was going to present at the European Conference of the Supply Chain Council, which I did by now. The presentation preceding mine was on sustainability and I really looked forward to it as I was looking for understanding how well HP's efforts were stacking up in our quest to develop a more sustainable world.

I have to tell you I came out of the presentation with mixed feelings. Not that HP is doing badly, but because the speaker was rather cynically putting a whole number of things back in question. For example, when companies calculate their carbon footprint, do they take everything into account, do they look at methane emissions and converts those to CO2 equivalents, are they not taken for a ride when they go for a carbon offset program etc. Scientifically he may and probably is right. However, I would argue that the importance today is to have companies gain conscience of the issues and start addressing them. Being scientifically 100% correct will come, but let's learn to crawl before we walk, and walk before we run.

One of the examples he was giving, was the fact that Walker Crisps had carbon labeled their chip bags in the UK. He showed a bag with a logo saying 75 gram of CO2 had been emitted in the manufacturing of this bag of chips. He put in question whether everything had been counted, and whether 75 gram was correct.

Interestingly I have heard a presentation from the project manager from Walker in another conference a while ago. He recognized that this was their best assumption, but more importantly that, because of the fact they had done this exercise, the R&D department was now hard at work to reduce the number to something in the area of 15 gram. They knew how to do that already and were performing the tests.

This is where my argument comes back in. Whether 75 gram and 15 gram can be proven scientifically and whether they include every single emission is one thing, but more importantly today is the fact that Walker Crisp believe they can reduce the CO2 emissions for this product by 80%.

I would argue we need to do two things in parallel, reduce the emissions, and any mechanism to motivate our companies to do so is valuable, while in the background we improve our models and measurement mechanisms. My fear is that if we disguard the initiatives taken by companies today, we will not get anything done. And that would be disastrous for our planet.

Using IT to make the company green

christianverstraete — Mon, 25 Aug 2008 15:18:00 GMT

In one of my previous posts, I referred to the WWF report "The potential global CO2 reductions from ICT use". Last week I had the opportunity to talk to one of my colleagues who collaborated with the WWF in this report, and we started a very interesting discussion on the use of IT to reduce companies' effect on the environment.

IT consumes 2% of the world energy, and although it is important to reduce that one, there are the other 98% and according to the report, 37% comes directly or indirectly from the industry. Our topic of discussion turned around how we could use IT to help reduce this amount. There are three clear areas that we came up with, first, the manufacturing process itself, second transportation and third the use and recycling of the product.

I remembered a conversation a couple years ago where somebody told me a CPU chip would go two or three times around the world prior to being delivered as part of a computer at your doorstep. Frankly, is that really needed? Could we use simulation software to optimize the manufacturing process, ensuring that, while maintaining the lowest possible cost, we can reduce the CO2 emissions.

Many of our factories are automated today, and they use MES (Manufacturing Execution Systems) to understand and optimize their operations. But those systems do not take environmental concerns into account as they exist today. This is another area we should work on.

As part of research for a greener IT, HPLabs has focused on effective cooling methods for computers and racks. In doing so, they managed to reduce the energy usage by up to 40%. Now, many manufacturing processes require to be cooled. Could some of the approaches developed by HPLabs being used for those processes? Although there is no clear answer today, it's worth asking the question and looking at potential opportunities for piloting. Now, you may argue this has little to do with IT directly, and you are right. However, if it helps, that's the most important isn't it.

At HP we are using a design for the environment (DFE) approach in product development, identifying the actual implications of the product under development to the environment. Simulations during the process allow us to anticipate future consumption and other key data items. Here again, IT can help understand what is required to develop a loc carbon product.

I realize I have only scratched the surface here, but am looking at your inputs and ideas. This subject will be core and center in conversations between manufacturers in the near future, so let's prepare ourselves.

BOS & BOC, new acronyms to get used to?

christianverstraete — Sun, 13 Jul 2008 09:48:00 GMT

Green, sustainability and SER, are terms that appear increasingly in our publications and conversations. They draw our attention on the fact our products interact with their environment and potentially harm it. That impact needs to be evaluated from the development of the product onwards, and obviously, diminished as much as possible. This is what is being called DfE, design for the environment.

But this is easier said than done. Indeed, in today's environment, suppliers do not have the information at hand for each of their components, ingredients or substances. Actually, as mentioned in my previous post, the way to calculate the impact is not standardized, so even if the values exist, what do they mean?

During the development of a product, a Bill of Materials (BOM) and Bill of Process (BOP) are created. These will be used at a later stage in the operational systems. I would like to argue that we need to add two new bills to the series. These are first, the Bill of Substances (BOS), which would contain all the substances contained in the product and their quantities, and second, the Bill of Carbon (BOC), containing the amount of carbon emissions for the product at all stages in the manufacturing. There should be a close link between the BOM and the BOS, and between the BOP and the BOC. Operational systems should include modules to report on those two bills.

But now, how do we get the data to populate them. Obviously, the base information related to the components, ingredients and substances needs to come from the suppliers and be augmented with the data associated with the company's operations. The easiest way to do this would be for each company to report both the BOC and BOS for their own products. For the BOS, the information should be the sum of the information of each of the components, ingredients and substances included in the product, potentially reduced by the substances subtracted during the process. For the BOC, we should start from the sum of the information coming from the suppliers and add the quantities generated during manufacturing and transportation.

For the Bill of Carbon, we should agree on a standard way of calculation to ensure the numbers are meaningful and reflect reality. Obviously averages may have to be used, as not all manufacturing facilities generate the same amount of CO2 to make the same product, and that transportation can depend on the warehouse/distribution center used, on the distance to the customer etc. Let's stay pragmatic. Gaining visibility of the amount of CO2 generated, even if it is an average, would already go a long way to focus the attention on reducing it.

So, are we ready to increase our usage of three letter acronyms?