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12 simple ideas for a greener supply chain


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There are many opportunities to make supply chains green. The trick is figuring out how to define a green strategy, integrate ideas, and balance tradeoffs. Here are 12 ideas that are especially relevant to managers of supply chains for elec- tronic and high-technology products.

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12 simple ideas for a greener supply chain

  1. 1. July 2008 For more information on IBM’s Global Electronics Industry 12 simple ideas“Green” may be the new buzzword in operations departments, but it’s more than a © Copyright IBM Corporation 2008 IBM Carbon Footprintpassing trend. In light of rising energy costs, the inevitability of stricter carbon regu- green thinking, please visit: IBM Corporation Distribution Modellations, and higher expectations for corporate social responsibility, going green isn’t Lower the outer edge New Orchard Road Armonk, NY 10504 for making your supply chain greener.just good for the planet. It’s good for business. U.S.A. Printed in the United States of America A discussion starter 6-08The U.S. Department of Energy’s Annual Energy Review shows that industrial and All Rights Reservedtransportation sectors—those that coincide with supply chain activities—account for IBM, the IBM logo, and are trademarks or61 percent of U.S. emissions. Clearly, every part of the supply chain offers abundant registered trademarks of International Business Machines Corporation in the United States, other countries, or both.opportunities for companies to reduce waste and pollution. But with so many options, If these and other IBM trademarked terms are marked on Use, Service, andwhere should the greening begin? their first occurrence in this information with a trademark Components Outsourcing End-of-Life symbol (® or ™), these symbols indicate U.S. registered Operations Outbound Logistics Logistics Inbound or common law trademarks owned by IBM at the time this InternalThere are many ways to make your supply chain greener. information was published. Such trademarks may also be registered or common law trademarks in other countries.The answer will vary by supply chain. Just as each supply chain has a unique carbon A current list of IBM trademarks is available on the Webfootprint, each will identify unique ways to reduce its own emissions. What works for As a general guideline, when looking to at “Copyright and trademark information” at com/legal/copytrade.shtmlone supply chain may not be applicable for another. reduce carbon, you should initially focus on Other company, product, or service names may be trade- opportunities that are both big and easy to marks or service marks of others.There are several factors to take into consideration when devising a green supply implement. Often you can find those oppor- References herein to IBM products and services do notchain strategy: Which modifications will have the largest impact? Which will be easi- tunities within your own operations. imply that IBM intends to make them available in other countries. IBM makes no representations or warrantiesest to implement? Which will provide the greatest operational efficiencies? regarding third-party products or services.Deciding where to begin is the hardest part.To help companies in the electronics value chain simplify the process of defininga strategy, IBM has devised a comprehensive set of green supply chain tools. Byanalyzing everything from product life cycle management and supply chain strategyto procurement and integrated operations, we can help pinpoint areas that provide thegreatest efficiencies. Paul Brody Partner - Global Business ServicesThis visual overview is an introduction to making your supply chain greener. Supply Chain Strategy +1.415.902.3613 Mondher Ben-Hamida Associate Partner - Global Business Services Supply Chain Strategy ELF03001-USEN-00 +1.415.425.7184
  2. 2. 12 ideas to make supply chains greener There are many opportunities to make supply chains green. The trick is 5 9 figuring out how to define a green Alter service-level agreements Plan smarter routes strategy, integrate ideas, and If your service level agreements with suppliers There’s an art to planning distribution routes and balance tradeoffs. Here are 12 ideas contain requirements that aren’t really required choosing the right transportation modes. Simple that are especially relevant to for your business, waste is the result. When intuition seldom leads to optimal solutions and managers of supply chains for elec- your agreements force your suppliers to make over time tradition and intertia often allow routes tronic and high-technology products. small, expedited deliveries, energy use goes up to settle into patterns that are inefficient and dramatically. When those shipments are driven wasteful. Factoring in the true costs and carbon 1 only by service level agreements and not by valid implications can lead to more rational routes. business needs, you have opportunities to save. Redesign the product 10 There may be opportunities to redesign the 6 product itself to have a smaller impact on the Coordinate with partners environment and reduce energy consumption Shrink packaging Although you can make initial progress on your in manufacturing, distribution, or use. Simple Look for opportunities to re-engineer pack- own, you soon will need to integrate your efforts changes can have big implications. Every ages so that the size and weight of products is with suppliers and distributors. Many conceivable change is an opportunity—from reduced. New packaging materials and designs opportunities to make your supply chain greener reducing the weight of the product to making it make smaller package volumes possible, will depend on careful coordination with allies easier to disassemble. In some cases, innovation allowing shipping containers to hold more and both upstream and down. Be prepared to share or new technologies may make it possible to trucks to carry more products in a load. Improved your goals and plans with these allies and eliminate some components or sub-components package designs can also reduce the burden of incorporate their plans and priorities into your entirely and thereby eliminate a portion of the recycling or eliminating packaging materials at solutions. supply chain. the end of the chain. 11 2 7 Take a life-cycle view Reconfigure manufacturing Plan for reverse supply chain activity Look at the whole life of the product to find Streamlining production steps, reducing energy Products that are recalled from the market or opportunities. Energy used while a product is use, and reducing pollutants, toxic materials, and which must be upgraded or refurbished during in service can be significant. Costs to recycle, harmful emissions can each have a big impact on their useful life require some kind of reverse reuse, or refurbish products also can be analyzed how green the supply chain is. supply chain. By planning for these events up to find opportunities. front, it’s possible to eliminate or reduce 3 unacceptably high energy costs later. How 12 products are designed, assembled, labeled, and Start now Shift to green suppliers packaged can have a profound effect on the Although they may have higher manufacturing The ability to eliminate waste and pollution is efficiency of any reverse supply chain. becoming an increasingly important criterion for costs, green suppliers can have a big effect on buyers. Making progress reinforces a positive the carbon implications of bringing products to 8 market. An analysis of alternative suppliers may impression of your brand and is a source of pride uncover potential benefits that justify making a Consolidate shipments for employees. For many businesses, mandated change. Look for opportunities to replace multiple, changes are inevitable. Start by analyzing which smaller shipments with fewer, larger shipments. opportunities deserve investment now and which 4 This simple idea can require careful analysis to should wait. Initially, focus on the opportunities work out which suppliers to use, where to locate you control, then reach out to the opportunities Shorten distances facilities, and what inventory levels to maintain. upstream and down. Distribution networks can be refined to reduce the distances that products must travel. By rationalizing sourcing, assembly, and distribution in relation to markets, travel distances and corresponding fuel use can be reduced. For some products, simply working with suppliers who are closer to major markets can significantly reduce energy use. 9254