Dwayne Cole, Patrick Penfield & Scott Webster Whitman School of Management Syracuse University SURE Conference

Transcription

1 The Evolving Green Supply Chain Dwayne Cole, Patrick Penfield & Scott Webster Whitman School of Management Syracuse University SURE Conference November 5,2009

2 Green Supply Chain Agenda Part 1: History & Evolution of the Supply Chain Where we are Today Industrial Revolution Green Supply Chain Model Inputs Transformation Outputs Part 2: Implementing & Becoming Green Sustainable Production / Consumption Practices Becoming Green Conclusion Questions & Discussion

3 Turbulent Weather Patterns Droughts The World Bank reports that 80 countries now have water shortages that threaten health and economies while 40 percent of the world more than 2 billion people have no access to clean water or sanitation i

4 Population Growth Population Increase of from 6 Billion to 9 Billion by 2050 Europe 653M 10% Russia 112M 24% U.S. 438m +32% Asia 5.25B +42% Latin America 783M + 39% Africa 1.9 Billion +114% Source: UN 2004

5 Greenhouse Effect The Top Carbon Dioxide id Emitters in the World Carbon Dioxide Trapped in the Atmosphere Causing Temperatures to Rise 10 Billion Tons Put into the atmosphere annually

6 Natural Capital Declining Humankind has inherited a 3.8 billion year store of natural capital. At present rates of use and degradation, there will be littleleftleft by the end of the next century. Hawken, Lovins & Lovins, Natural Capitalism

7 Industrial Revolution Flawed Cradle to Grave 90% of materials extracted to make durable goods in the U.S. become waste immediately Products have built in obsolescence Products contain on average 5% of the raw material involved in the process of making it and dli delivering i it Snack Bags Have 9 layers made of seven different materials? Cradle to Cradle McDonugh & Braumgart 2002

8 Environmental Pressures Customers Climate Change NGO s Business Investors/Shareholders Natural Resources Governments

9 Green Sustainable Supply Chain Environmentally Environmentally Environmentally Friendly Material Friendly Processes Friendly Output Input Transformation Output Reuse/Reduce Process Reclaim Process Disposal Process Recycled Reclaim/Reuse/Improve End of Life Reclaimed Product Reduce By Products Raw Material Recyclable Material Copyright P.Penfield 2007

10 Input Life Cycle Assessment Design Discipline Minimize Environmental impact Products Technologies Materials Processes Industrial Systems and Activities

11 Inputs Impact Your Supply Chain Most supply chain managers do not focus on environmental concerns We incur a multitude of costs by using unfriendly environmental inputs Regulatory Costs (MSDS Sheets) Permits Storage Costs By Product Costs Waste Disposal Training Costs Other Environmental Costs The Lean and Green Supply Chain EPA 2000

12 Inputs Misallocation of Environmental Costs Regulatory Supervisor Utility Water Cost Sl Salaries Costs/Rent t Treatment t Materials and Labor (A) Overhead Materials and Labor (B) Product A Product B The Lean and Green Supply Chain EPA 2000

13 Improved Allocation of Environmental Costs Supervisor Sl Salaries Utility Costs/Rent t Water Treatment t Regulatory Cost Materials and Labor (A) Overhead Materials and Labor (B) Product A Product B The Lean and Green Supply Chain EPA 2000

14 Inputs Materials Environmental Value Analysis Reducing Cost while Increasing Function Focus on the Environment Removing Toxic Mt Materials il Eliminating Regulations & Disposal Costs

15 Inputs Ford Motor Company Putting Soybean based foam cushions in the seats of 2008 Mustangs Ford said the environmental advantages include reduced carbon dioxide id emissions i lower energy use to produce the soy foam. The annual worldwide market for automotive foam is 9 billion pounds.

16 Inputs Up cycle Retaining high quality in a closed loop industrial cycle Henry Ford practiced an early form of up cycling He had Model A trucks shipped in crates that became the vehicle s floorboard when it reached it s destination You can paint it any color, so long as it's black Cradle to Cradle McDonugh & Braumgart 2002

17 Inputs Use Waste as a Resource As a system puts on more biomass More Recycling Loops to keep it from collapsing Producers Consumers Decomposers No Waste Economy Waste will either be recycled, reused, or used as fuel. No more garbage Commodity Biomimicry Janine Benyus

18 Transformation Energy Fuels Replacing Oil Alternatives Regional Renewable Energy Sources Ocean Energy Wind Solar Bio Mass Hydrogen Batteries

19 Transformation Gather and Use Energy Efficiently Coax every last Kilowatt out of fossil fuels we are using In the last ttwenty t years Japan s economic activity has increased while its energy consumption has decreasedd Energy Audits Switch to Energy Efficient Machines Tax Incentives Take Advantage Do more with less! Biomimicry Janine Benyus

20 Transformation Process Process Tools Lean Eliminating Waste Six Sigma Eliminating Variation Conservation Using Less becoming more efficient Environmentally Friendly Processes

21 Transformation Wal Mart & UPS Improving Their Processes Hybrid Hydrogen Trucks Auxiliary Power Units on Trucks Wind skirts on trucks to reduce air resistance Single Tires vs. Dual UPS Eliminating Left Hand Turns

22 Output Diversify and Cooperate to Fully Use the Habitat Japan s Ecofactory Initiatives Veins Return products so their materials can be purified and reused Restoration Factories Being built nationwide Refurbish or Recycle products at end of life Biomimicry Janine Benyus

23 Output Product Life Extensions Reduces Environmental Impact Shell the same new software upload Transforms it into a new product Cradle to Cradle McDonugh & Braumgart

24 Output Design for Services Services people desire Customer would effectively purchase the services of a product they desire, i.e. a T.V. for a defined period of time Ten thousand hours of viewing versus the television itself Cradle to Cradle McDonugh & Braumgart 2002

25 Case: Computers & Electronics Economic Growth Or Irresponsible Consumptions.

26 Consumption of Electronic Goods A Sustainability Concern Economic development or irresponsible production?

27 Consumption of Electronic Goods Quick kfacts: Trends in computer & electronic consumption In the US, 67 M computers were sold in 2007 up 14.6%, 3.9 M TVs were bought for the super bowl (2008).

28 Consumption of Electronic Goods Quick kfacts: Electronic Waste Growing consumption has led to critical end of life waste management problems with deep environmental concerns ,028 million 1,862 million 360 million 400,000, , ,000, units of electronic waste is scraped annually. units of computers are thrown away each day. cell phones retired annually.

29 Consumption of Electronic Goods Quick kfacts: Electronic Waste Who should be responsible for environmental concerns: who should collect, transport, process & finance EOL e waste management? In 2005, 2.63 Million Tons of e waste. 87.5% (2.3 Million) trashed & only 12% of discards arerecycled recycled 68 % consumer stockpile unwanted computers million end of use electronic devices are still market.

30 Sustainable Business Practices An increasing number of private and public sector organizations are announcing significant Environmental and Cost Saving Initiatives: Designfor Environment Reverse Logistics Zero waste initiatives ISO certifications i Environmental Accounting

31 Buying Green B Benefits of Buying Green fit f B i G Adopting Environmental purchasing policies not only promotes social, economic, or environmental objective, Greening procurement promotes economic, or environmental objective, Greening procurement promotes financial objectives.

32 Becoming Green: Overview of How To AIM: The aim of this presentation is to provide a basic understanding of existing strategies for incorporating sustainable consumption practices into materials and equipment management activities.

33 Becoming Green: Mapping, Assessment, Impact tanalysis: Fi Friendly Products d nal ons pplier rganiz nment Relati zation Sup En Onviron almapping & Assessment

34 Becoming Green Mapping, Assessment, Impact tanalysis: Fi Friendly Practices Equipment & Furnishings Computers & Business Machines Audio Visual Equipment Lighting, HVAC, Alarms etc. Carpet, Furniture Communications, etc. Materials & Supplies Paper Office Supplies Cleaning Agents Fluids Scrape materials

35 Becoming Green Mapping, Assessment, Impact tanalysis: Fi Friendly Practices SuE Organnmen Enviro pplier izatio Relat onal tions ntalmapping & Assessment

36 Becoming Green: Evaluation & Performance Examine the environmental performance of your products and your suppliers. Producer Attributes Corporate philosophy Environmental planning Environmental Management Systems Environmental Evaluation Corporate Reporting Employee Education Product Attributes Recyclability Packaging Lifecycle Eco labels Impacts during use Energy Savings

37 The Evolving Green Supply Chain Becoming Green Conclusion Environmental focus on inputs, transformation, outputs and recycling Audit Base line measure where you are today Set goals/objectives Private and Public sector companies are increasingly adopting Green Supply Chain practices Greening Supply Chain Practices Has Economic and Environmental Benefits