The Greening of the Supply Chain Jonathan D. Gatrell VP – Industry Development Inovis

Virtualization Sustainability Green IT Compliance Servers design disposal Transportation Data Centers Carbon Footprint Carbon Credits greenhouse eInvoicing RoHS WEEE emissions sourcing recyclable materials packaging environmental brundtland commission quality biomimicry audit analysis reduction treehugger governance The Supply Chain is the Center

Let’s start with the business.

SOURCE: AMR Research … A Branded Global Citizen…

Collaboration tools can reduce travel Video/Tele Conference Supply chain management tools can optimize supply chains for environmental factors Routing LTL E-business initiatives provide low impact shipping options. Direct to consumer Cross Docking Business activity monitoring and alerts can drive improved decisions … Green Opportunities …

Collaboration tools can reduce travel

Video/Tele Conference

Supply chain management tools can optimize supply chains for environmental factors

Routing

LTL

E-business initiatives provide low impact shipping options.

Direct to consumer

Cross Docking

Business activity monitoring and alerts can drive improved decisions

… Where Industries are Focusing… First Degree: Infrastructure Second Degree: Applications & Process Third Degree: Materials and Service SOURCE: Gartner

By 2009, one-third of IT organizations will have "improved environmental sustainability" as a top IT management issue, and included as a priority item in the list of buying criteria. By 2011, suppliers to large global enterprises will need to prove their green credentials via an audited process to retain preferred supplier status. … Gartner: Green IT is REAL…

Globalization Compliance and Corporate Conscious Increasing Sourcing Complexities Drivers for a Green Supply Chain Global Retailers Private Label Multi-Channel Commerce The Greening Consumer

Let’s start with the customer.

The Customer has the Power Power to buy what they want!

Transparency Customers connect directly with other customers and organizations for recommendations.

… The Race for the green consumer… Consumers do make decision on a brands environmentalism: the products they purchase (79%), the products/services they recommend to others (77%), where they shop (74%), where they choose to work (73%) where they invest their money (72%). SOURCE: 2007 GfK Roper Green Gauge

Consumers do make decision on a brands environmentalism:

the products they purchase (79%),

the products/services they recommend to others (77%),

where they shop (74%),

where they choose to work (73%)

where they invest their money (72%).

Not just Consumerism – Economics too!

Demand Driven Supply Chains 9 of 10 suppliers source from China Multi-Modal Options … A world of opportunity… Ocean Freight Air Freight Consolidate Customs Customs Deconsolidate

Demand Driven Supply Chains

9 of 10 suppliers source from China

Multi-Modal Options

Globalization Longer supply chains limit visibility, increase complexity/risk and impact the environment.

$0.99CAD / litre “ $200 Oil” Higher transportation costs a key driver to impacting change

Cost Reduction Greener manufacturing and material selection can reduce cost of production

The Supply Chain Executive Goes Green Compliance Automation, Visibility and Control

… Collaboration Is Increasing… “ How much do you collaborate with trading partners for the following activities?” Source: 2006 Shared Strategy Study by Forrester Research, Consumer Goods Technology , and RIS News BASE: 89 retailers and 80 manufacturers

… Collaboration Creates Value… “ To what degree to you agree with the following statements?” Source: 2006 Shared Strategy Study by Forrester Research, Consumer Goods Technology , and RIS News BASE: 89 retailers and 80 manufacturers

… But Collaboration is Hard. “ Which of the following are challenging or extremely challenging to your company’s ability to collaborate with its trading partners?” Source: 2006 Shared Strategy Study by Forrester Research, Consumer Goods Technology , and RIS News BASE: 89 retailers and 80 manufacturers

Green Retail

Mervyns Automation Manual vendor set-up limits responsiveness and paper laden.

A Manual vendor setup process Buyer submits new vendor request form Merchant sends paperwork t o B uyer's finance Signed financial agreement from vendor New Vendor approved by DMM Vendor Setup in Financial System Vendor Welcome Letter Vendor Setup Form Send Vendor Training Docs Set up Vendor Portals Set up Product Information Send Onbording process notification Create ticket for EDI Run onboarding/certification process Validate ID and add to translator or gateway Notify New Vendor Teams: Buyer Finance

Mervyns Solution Reduces vendor set-up by 10x. Reduces internal resource requirements. Accelerates time to automation. Reduces paper.

Reduces vendor set-up by 10x.

Reduces internal resource requirements.

Accelerates time to automation.

Reduces paper.

Vendors Vendor certification is manual Expense offsets aren’t effective for on-boarding Data mapping bottlenecked Store sales suffer Cross-docking constrained Boscov’s Optimization Improved on boarding and distribution model reduces impact on the environment.

Boscov’s Solution Increased e-commerce connections from 200 to 600 vendors. Reduced operational costs. Distribution center times shrink from 2 days to 4 hours. Faster product to more stores.

Increased e-commerce connections from 200 to 600 vendors.

Reduced operational costs.

Distribution center times shrink from 2 days to 4 hours.

Faster product to more stores.

Green Manufacturing

The Greening of HP On boarding of new shipment messages, sourcing of material and recycling initiatives

IBM: Global Accountability On boarding of suppliers, channel management, compliance and scorecarding

Know where you stand - Who and What have you automated? Have a plan – Who and What can you STILL automate? Incorporate "green" into your existing procurement processes – Remove paper where possible. Communicate your goals and standards to your supplier community – Align your business community Do the "easy stuff" first – More partners, more documents … A 5 Point Action Plan …

Know where you stand - Who and What have you automated?

Have a plan – Who and What can you STILL automate?

Incorporate "green" into your existing procurement processes – Remove paper where possible.

Communicate your goals and standards to your supplier community – Align your business community

Do the "easy stuff" first – More partners, more documents

What can YOU do today?

use the ideas presentation in your business to create awareness forward it to 5 other colleagues to make OR Difference

The Greening of the Supply Chain Jonathan D. Gatrell VP – Industry Development Inovis