Big Blue Making Supply Chains Into Green Super-Models: No Floppy Disks Required.
Tongue-in-cheek headline aside, we really like this idea of IBM's. Here's why. A progressive business generally initiates climate action in the following steps: making a corporate commitment and stating it to stockholders and the public; measuring the baseline GHG footprint at company-controlled sites; setting reduction goals for energy use and the GHG footprint (of controlled sites); implementing goals and reporting progress against the "baseline"; and then, pushing suppliers to take these same steps and report their progress as well. The supply chain is where the magic is.
In the total set of all businesses, most are just exploring the idea of making a public commitment. So, while that carries forward, IBM has built a software model for the final climate action step, supply chain management, in a way that balances cost with climate objectives, and is mindful of the fact that one size does not fit all.
The magic of managing supply chains for climate action is this: suppliers, which by coincidence of location or by intent, become energy efficient, and/or utilize a high proportion of renewable power, can get recognition for it from progressive customers. This recognition feeds back to the State and local officials who set constructive energy and climate policies.
By enabling supply chains to become more efficient and less emissive of GHG, overall, those States or Countries hosting such green "suppliers," have set in motion a virtuous cycle that encourages the growth of more green business supply chains: in essence, creating a "green" economic development incentive. This growth can be expedited by tools such as the one being promoted by IBM. Look below for a few excerpts from IBMs promotional release.Heres' an expanded supply chain definition from Supply-Chain Council:
"The supply chain – a term now commonly used internationally – encompasses every effort involved in producing and delivering a final product or service, from the supplier's supplier to the customer's customer." The series of companies (actors) that interact for this producing and delivering is ...[the ]supply chain... The actors are connected through the flow of products, the flow of information and the flow of money.
IBM (NYSE: IBM) today announced the Carbon Tradeoff Modeler, a first-of-a-kind tool that enables organizations to analyze and manage the climate impact of their supply chains. The tool allows organizations to understand the outcome of critical tradeoffs to make smarter energy choices and better economic decisions by optimizing on service levels, quality, cost, and carbon dioxide emissions.
Developed by IBM Research and IBM Global Business Services, the Carbon Tradeoff Modeler models the complex interaction of factors driving supply chain carbon dioxide (CO2) emissions from both a manufacturing and distribution perspective. It can also quantify the tradeoffs between CO2 emissions reductions and other supply chain metrics such as inventory levels, and on-time delivery. IBM's Carbon Management Analysis Tool also identifies areas where carbon dioxide emissions and costs can be reduced simultaneously.
...Key factors the tool captures include: packaging options, alternative operational processes, alternative transportation modes and energy sources, inventory policies, and sourcing policies. The Carbon Management Analysis Tool can identify and recommend the most desirable actions to take among the many that can be used to achieve carbon dioxide emissions reduction.
Interested readers can find more about IBMs Global Business Services Paper on Mastering Carbon Management here.
Note: Its' a big world out there, smeared with spaghetti webs of supply chains, and GHG sources scattered all along them, that most people are completely unaware of. Businesses need all the help they can get to tackle supply chains. We are pleased to receive comments on competitive or similar services that deserve mention.
Image credit::Kinaxis, The Distributed Manufacturing Dilemma