Green Supply Chain 2010

The Green Supply Chain 2010
Supply Link VS Supply Chain

Bryan Larkin Steve Keifer
Chief Supply Chain Strategist VP Industry Marketing
Digital Management GXS

WELCOME to the FORUM

Agenda

Why Green Matters "Being a good steward of
the environment and in our
Areas of Business Focus communities, and being an
– Sourcing efficient and profitable
business, are not mutually
– Manufacturing exclusive. In fact they are
– Packaging one in the same."
– Logistics -- Lee Scott, Former CEO Wal-
– Information Technology Mart, Twenty First Century
Leadership, October 24, 2005
Five Things You Can Do

2

Why Focus on Sustainability?

3

Corporate Social Responsibility

Environment Equal Opportunity
& Resources & Diversity

Community Product Quality
Support & Safety

Human Health &
Rights Wellness

4

Media is Raising Awareness

5

The Past 4 Years
2006-2007 2008-2009

6

Important to Consumers
What actions will you take to be green today and in the future?

1 Turn off home electronics not in use
2 Recycle or reuse products
3 Use low-energy light bulbs
4 Use less water
5 Bring my own bags to grocery store
6 Use energy-efficient appliances
7 Use my car as little as possible
8 Purchase locally produced products
9 Improve insulation in my home
10 Buy products without packaging

7
WELCOME to the FORUM Source: Boston Consulting Group – Capturing the Green Advantage for Consumer Companies

Important to Shareholders

8

Important to Retailers
True Greener Options – Environmentally friendly merchandise
selection – CFL light bulbs; low flow showerheads; natural fertilizer
Value
LEADS (Lowes Energy Awareness Delivers Savings) –
Lowes Efficient Store Operations reducing water & energy usage at 1650+
stores.

ACE Helpful Earth Choices – Help to identify environmentally-
friendly products – organic pest control; rain barrels
Hardware

Sustainability 360 – Supplier Sustainability Assessment.
Walmart Supplied by 100% renewable energy. To create zero waste.

The Home Sustainable Forestry – Preference to wood from forests
managed in a responsible way. Eliminate purchasing from
Depot endangered regions of the world.

9

Important to Regulators

10

Congrats to Schneider Electric
• AMD Corporation • Ivalua Inc.
• ATC Logistics & • JIT Reshippables,
Electronics Inc.
• CaseStack, Inc. • ModusLink Global
• Cass Information Solutions
Systems, Inc. • Optiant
• Conexant Systems, • Ryder
Inc. • Schneider Electric
• Container and Pooling • SciQuest, Inc.
Solutions (CAPS) • SigmaQuest
• Con-way Inc. • SmartTurn
• D.W. Morgan Company • Strive Logistics, LLC
• DSC Logistics • SYSPRO
• Flash Global Logistics • The Evans Network
• Global4PL of Companies
• Hewlett-Packard • Total Logistic Control
Company • Transplace
• HIS • Transzap, Inc.
• INSIGHT, Inc. • UPS
• Integration Point • Williams-Sonoma
• Interface, Inc

Source: Supply and Demand Chain Executive
http://www.sdcexec.com/web/online/Green-Supply-Chain/Supply-and- 11
WELCOME to the FORUM Demand-Chain-Executive-Announces-Its-2009-Green-Supply-Chain-
Awards/60$11835

A Change in Perspective
“A recent study found the
average American golfer
walks about 900 miles a
year. Another study found
American golfers drink, on
average, 22 gallons of
alcohol a year.

That means, on average,
American golfers get about
41 miles to the gallon.

Kind of makes you proud…”

12
WELCOME to the FORUM Source: Internet

Green Sourcing
13

Green Sourcing
Smarter for Your Business and the Environment

Sourcing & Packaging & Usage &
Manufacturing Transportation Disposal

– Materials Composition – – Accurate Weights – – Recyclable – Whole
Lead, Mercury, Pallet Level Product or
Cadmium Components
– Packaging or Product
– Manufacturing Process made from Recycled – Recycling Instructions
uses Renewable Energy Content Well Understood and
Sources process is Practical
– Packaging
– Paints, coatings, plastics Configurations & – Energy Usage – On,
containing SCCPs Dimensions – SKU, Off and Standby Mode
Case, Pallet
– Useful Life Expectancy
– Upgradable, Easily
Repaired


China – Going Green?
Green Production & Manufacturing Initiatives in China

49% Recycling Programs for Raw Materials
38% Recycling Programs for Reusable Parts
32% Measure and Ensure Green SCM Compliance
30% Improved Labor Management
27% Measuring Company’s Carbon Footprint
27% Reducing CO2 in Manufacturing Processes
26% Include Recycling in New Product Design
19% Increasing Product Robustness in Design
8% Applying Carbon Off-Setting
7% Other

15
WELCOME to the FORUM Source: Global Supply Chain Council – Survey of 145 Chinese Businesses (February 2010)

Surveying Supplier Compliance

16

Five Things
Manufacturing
You Can Do

17

Is Lean Necessarily Green?

The contemporary emphasis on cycle time
compression, for example, may result in a multitude of
smaller shipments moving by fast, fuel-inefficient forms
of transportation. Environmentally responsible logistics
programs, by contrast, are more comfortable with
fewer, larger shipments moving by slow, fuel-efficient
forms of transportation.

Green Logistics Strategies: An Analysis of Usage Patterns.
By POIST, RICHARD F.
Publication: Transportation Journal
Date: Friday, December 22 2000
(referencing Haw-Jan Wu and Steven Dunn)

18

Do You Track a Chain or a Link?

We talk about supply chains….

But how many of us
only know about our
supply links – our
immediate suppliers
and customers?

The future belongs to multi-tier visibility:

• What do our customers’ customers want?

• What are our suppliers’ suppliers doing?
19

If you don’t know
what your
customers’ Or will
customers or understanding
suppliers’ them be a
suppliers are sense of
doing, will they strength for
be like an anchor you?
for your
business?

If there is a problem with a consumer-oriented
product, the CPSC can ask for the history of any
product shipped to or within the US. The can ask
for information on who produced which components
and when – and what compounds or ingredients
were used in production. Are you ready to provide
this information this if you have a problem?
20

Green
Packaging

21

Packaging Opportunities

22

Example - Bottled Water

200 Billion Bottles of
Water Consumed
Globally
Only 23.4% Recycled

Packaging Initiatives
• Change shape - less surface area
• Less weight for plastic materials
• Reduce shrink wrapping on cases
• Eliminate corrugated cardboard
• Reduce size and weight of labels
• 100% recyclable PET materials

WELCOME to the FORUM Source: Wikipedia; Corporate Sustainability Reports – Nestle, Coca Cola, Danone

Packaging Dimensions

Enables exchange of packaging dimensions for consumer unit
(each); grouped packaging (case) and transport packaging (pallet)

WELCOME to the FORUM Image Source: GS1 – GDSN Package Measurement Rules

Global Data Synchronization
Marketing Promotions Marketing Promotions
Packaging Trade Data Data Packaging Trade
Price Regulatory Pool Pool Price Regulatory

Source Global Data Recipient
Data Synchronization Data
Pool Network
Pool

Suppliers Publish Retailers Subscribe
Product Catalog to Updated Product
Data to a Local Data Data Data from a
“Data Pool” Pool Pool Local “Data Pool”

Global Data
Product Synchronization Network Product
Information Information
Manager enables exchange of Manager
product data with trading 25
WELCOME to the FORUM partners worldwide

Green
Transportation

26

Shipping by Train is Greener

If you are using trucks, can you
move your produce by rail instead?

27

Rail VS Truck: CO2 Emissions

Results from the CSX Clean Air Challenge – Carbon Calculator
http://www.csx.com/?fuseaction=customers.emissions_carboncalculator
28

Shipping by Ship is Greener
Have you considered coastal (Short
Sea) shipping instead of trucks?

Source: Texas Transportation Institute and University of Texas

www.greenships.org
29


Europe Leading the Way
Europe has many Short Sea Shipping routes.

www.greenships.org

www.shortsea.nl
Benefits to Short Sea Shipping:
• Reduced Road Congestion • Less vulnerable to high oil prices
• Increased road safety • Reduced fuel consumption
• Reduced noise pollution • Less reliance on imported fuel
• Reduced road and maintenance costs • Smaller carbon footprint
30

Green IT -
Sustainability
Reporting

31

Sustainability Reporting

Strategy & Analysis
Report Parameters
Governance & Commitments
Environmental Impact
• Materials
• Energy
• Water
• Biodiversity
• Emissions, Effluents, Waste
• Products and Services
• Compliance
• Transport

32
WELCOME to the FORUM Source: Global Reporting Initiative – www.globalreporting.org

Carbon Management Systems

33

Carbon Trading Markets

34

Green Benefits of Automation
Strengthening Your Competitive Advantage

Automating the exchange of documents and processes results in significant positive business
impact through reduced errors, manufacturing improvements, logistics improvements and
financial improvements. An added benefit is the sustainability aspect – automation helps
companies meet their corporate environmental goals.

Digitized Documents Digitized Processes
Improved Electronic Electronic Advance Order
Business impact Electronic Point of Sale Electronic Order Acknow Electronic Ship Carrier Lifecycle Logistics eInvoicing Inventory
Forecasting Data Sharing Orders Changes ledgement Invoices Notices Status Visibility Visibility with Match Visibility
Reduce Safety
Stock
Reduce
Expediting
Reduce Paper
Usage
Reduce Overages
in Shipment
Optimize
Transportation
Reduce Overall
Errors
Reduce Manual
Efforts
Improve order-to-
settlement
Direct Green Impact
Tangential Green Impact

Five Things You Can Do

1. Investigate Green IT options for you business
2. Carbon Management Systems (shareholder, government,
supplier/retailer requirements)
3. Supply Chain Integration
4. Investigate tools to support flexibility in operational models
(JIT/Lean vs Sustainable; Truck vs Train vs coastal shipping)
5. Sign up for a supply chain sustainability assessment

37

EDI & B2B e-Commerce
By removing the paper from supply
chain transactions, we could eliminate…

2.3 billion pounds of CO2, the equivalent of
taking 206,672 cars off the road for a year or
reducing gasoline consumption by 434 million
gallons or 8.9 million barrels of oil
1,386,667 tons of wood, the equivalent of 9.6
million trees
15.3 million BTUs of total energy
consumption, the equivalent of about 168,633
homes/year
7.6 billion gallons of wastewater, the
equivalent of about 11,553 swimming pools
911 million pounds of solid waste, the
equivalent of about 32,548 garbage trucks.
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WELCOME to the FORUM Source: Environmental Defense Fund Paper Calculator

Sustainability Assessment

o Bring your total number of business
documents shared per year
• Paper based
• Electronic
o We’ll provide a quick Supply Chain
Sustainability Assessment, including
a certificate you can share with your
corporate sustainability leaders, and
we’ll let you know things you can do
to help improve your business’
carbon footprint!
39

Earth Day

Earth Day
April 22nd

40

Contact Details
Bryan Scott Larkin
– Chief Supply Chain Strategist, Digital Management, Inc.
– blarkin@digitalmanagement.com
– http://www.digitalmanagement.com
– Twitter: @bslarkin
Steve Keifer
– VP of Product and Industry Marketing, GXS
– Steve.Keifer@gxs.com
– http://www.gxs.com
– Twitter: @smkeifer

41

Green Supply Chain 2010

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