The Supply Chain and the Carbon Footprint

Kennedy Maize

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Can companies tweak their supply chain operations to produce lower carbon dioxide emissions? Is that desirable?

A recent study by the consulting company Accenture found that only 10% of the companies it surveyed pay attention to the carbon footprint (however defined) of their supply chain activities and implement environmental sustainability programs (again undefined) aimed at the supply chain (see figure).

[[INSERT JPG HERE: 040109_GreenSupplyChain_fig1.jpg ]]
A trade-off model takes into account various options and performance factors. Source: IBM Research and the IBM Institute for Business Value.

Accenture surveyed 245 supply chain executives. The survey found that the supply chain “masters,” the top gurus in supply chain management—those whose organizations have placed in the top quartile in cost-effectiveness and customer service—are much more likely (20% versus 9%) than the “non-masters” to be concerned about carbon footprint issues and environmental sustainability.

Requests to the consulting firm for clarification of its definitions of “carbon footprint” and “sustainability” were unanswered.

The Business of Carbon

In a dizzying flurry of buzzwords in a press release, Jonathan Wright, Accenture’s supply chain expert, said, “Supply chain masters are making great strides in linking cost effectiveness, customer service and sustainable supply chain practices. Despite today’s reduced energy costs, there continues to be a business case for greening the supply chain, resulting in lower costs as well as environmentally responsible processes.”

Accenture said its study also found that more than a third of supply chain managers “have no awareness of the level of supply chain emissions in their supply chain network.” But more than three-quarters “have undertaken at least one green initiative in their warehouses, predominantly in the areas of recycling and using natural light, lighting management systems and energy efficient bulbs.”

Said Wright, “The study findings demonstrate that the vast majority of organizations are taking steps to reduce carbon emissions. However, most are implementing carbon-reductions solutions without understanding their carbon footprint and are therefore unable to measure the real impact those solutions are having on their emissions.”

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