the evolving green supply chain the evolving green supply chain

The Evolving Green Supply ChainThe Evolving Green Supply ChainDwayne Cole, Patrick Penfield & Scott Webster

Whitman School of ManagementSyracuse UniversitySURE ConferenceNovember 5,2009November 5,2009

Green Supply Chain Agenda

• Part 1: History & Evolution of the Supply Chain• Part 1: History & Evolution of the Supply Chain– Where we are Today– Industrial RevolutionG S l Ch i M d l– Green Supply Chain Model

– Inputs– TransformationO– Outputs

• Part 2: Implementing & Becoming Green– Sustainable Production / Consumption Practices– Becoming Green– Conclusion

• Questions & DiscussionQuestions & Discussion

Turbulent Weather PatternsD htDroughts

• 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 l i iclean water or sanitation 

Population GrowthP l ti I f f 6 Billi t 9 Billi b 2050Population Increase of from 6 Billion to 9 Billion by 2050

Europe 653M 10%Russia 112M ‐24%

U.S. 438m +32%

Europe 653M ‐10%

Latin America 783M + 39%

Asia 5.25B +42%

Africa 1.9 Billion +114%

Source: UN 2004

Greenhouse EffectTh T C b Di id E itt i th W ldThe Top Carbon Dioxide Emitters in the World

Carbon Dioxide Trapped in the Atmosphere –

10 BilliCausing Temperatures to Rise – 10 Billion Tons Put into the atmosphere annually

1.

2.

3.

http://www.infoplease.com/ipa/A0933833.htmlhttp://carma.org/

4.

Natural Capital ‐ Declining p g

Humankind has inherited a 3.8 billion – year store of natural capital.  

At present rates of use and degradation, there will be little left bywill be little left by 

the end of the next century.   

Hawken, Lovins & Lovins, Natural Capitalism

Industrial Revolution Flawed

• Cradle to Grave• Cradle to Grave– 90% of materials extracted to make durable goods in the U.S. b t i di t lbecome waste immediately

– Products have “built in obsolescence”

– Products contain on average 5% of the raw material involved in the process of making it and d li i itdelivering it

Cradle to Cradle – McDonugh & Braumgart ‐2002

Snack Bags ‐ Have 9 layers made of seven different materials?

Environmental Pressures

Customers

Climate Change

BusinessInvestors/Shareholders

NGO’sInvestors/Shareholders

Natural Resources

Governments

Green Sustainable Supply Chain

Environmentally                      Environmentally                      Environmentallyy y yFriendly Material Friendly Processes                   Friendly Output 

Input                                    Transformation                            Output

Reuse/ReduceProcess

DisposalProcess

ProcessReclaim

Recycled                             Reclaim/Reuse/Improve                       End of LifeReclaimed Product Reduce By‐Products Raw MaterialReclaimed Product Reduce By Products      Raw MaterialRecyclable Material

Copyright – P.Penfield 2007

Input ‐ Life Cycle Assessment

•Design Discipline•Minimize Environmental impact – Products

– Technologies

– Materials

– Processes

– Industrial Systems and Activities

Inputs ‐ Impact Your Supply Chain

• Most supply chain managers do notMost 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

Inputs ‐Misallocation of Environmental Costs

SupervisorS l i

Regulatory C t

Utility C t /R t

Water T t tSalariesCost Costs/Rent Treatment

Materials and Overhead

Materials and Labor (A)

OverheadLabor (B)

Prod ct BProd ct A

The Lean and Green Supply Chain – EPA 2000

Product B Product A

Improved Allocation of Environmental Costs

SupervisorS l i

Regulatory C t

Utility C t /R t

Water T t tSalaries CostCosts/Rent Treatment

Materials and Overhead

Materials and Labor (A)

OverheadLabor (B)

Prod ct BProd ct A Product B Product A

The Lean and Green Supply Chain – EPA 2000

Inputs ‐Materials

• Environmental Value Analysis– Reducing Cost while Increasing Function

– Focus on the Environment

R i T i M t i l– Removing Toxic Materials• Eliminating Regulations & Disposal Costs

Inputs ‐ Ford Motor Company

• Putting Soybean based foam cushions in the seats of 2008 Mustangs

• Ford said the environmental advantages include reduced 

b di id i i lcarbon dioxide emissions lower energy use to produce the soy foam. 

• The annual worldwide market for automotive foam is 9 billion poundspounds. 

http://www.fordforum.com/m_26146/tm.htm

Inputs ‐ Up cycle

• Retaining high quality in aRetaining high quality in a closed loop industrial cycle

•Henry Ford practiced anHenry 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

Inputs ‐ Use Waste as a Resource

•As a system puts on more biomassAs a system puts on more biomass – More Recycling Loops to keep it from collapsing

P d• Producers• Consumers• Decomposers

•No Waste Economy•Waste will either be recycled, reused or used as fuelreused, or used as fuel.

•No more garbage ‐ Commodity

Biomimicry – Janine Benyus

Transformation‐ Energy

• Fuels – Replacing Oil• Alternatives• Regional Renewable Energy Sources

– Ocean Energy 

– Wind

– Solar

– Bio MassBio Mass

– Hydrogen

• Batteries

Transformation ‐ Gather and Use Energy Efficiently

• Coax every last Kilowatt out of fossil fuels we are usingI th l t t t• In the last twenty years– Japan’s economic activity has increased while its energy consumption has d ddecreased

• Energy Audits• Switch to Energy Efficient Machines –Switch to Energy Efficient Machines Tax Incentives – Take Advantage

• Do more with less!

Biomimicry – Janine Benyus

Transformation ‐ Process

• Process Tools– Lean

• Eliminating Waste

– Six Sigma• Eliminating Variation• Eliminating Variation

– Conservation• Using Less becoming more efficient

– Environmentally Friendly Processes

Transformation ‐Wal‐Mart & UPS –Improving Their ProcessesImproving Their Processes

•Hybrid Hydrogen Trucks •Auxiliary Power Units on Trucks•Wind skirts on trucks to reduce air resistanceSi l Ti D l• Single Tires vs. Dual

•UPS – Eliminating Left Hand Turns

http://walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=349

Output ‐ Diversify and Cooperate to Fully Use the HabitatFully Use the Habitat

• Japan’s Ecofactory Initiatives– Veins

• Return products so their materials can be purified and reused

• Restoration Factories• Restoration Factories– Being built nationwide

– Refurbish or Recycle products at end y pof life

Biomimicry – Janine Benyus

Output ‐ Product Life Extensions

• Reduces Environmental Impact

• Shell the same ‐ new software upload

• Transforms it into a new product

23Cradle to Cradle – McDonugh & Braumgart ‐2002

Output ‐ Design for Services

• Services people desire• Customer would effectively ypurchase 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 itselfthe television itself

Cradle to Cradle – McDonugh & Braumgart ‐2002

C C t & El t iCase: Computers & ElectronicsEconomic Growth Or Irresponsible p

Consumptions.

Consumption of Electronic GoodsA S t i bilit C

Economic development or irresponsible production?

A Sustainability Concern

Consumption of Electronic GoodsQ i k F t T d i t & l t i tiQuick Facts: 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).

Consumption of Electronic GoodsQ i k F t El t i W t

Growing consumption has led to critical end‐of‐life waste management problems with deep environmental concerns

Quick Facts: Electronic Waste

3,028million

2000 2000 ‐‐2007 2007 million

1 8621,862million

360360million

130 000 000133 000400 000 000 130,000,000cell phones retired annually. 

133,000units of computers are thrown away each day.

400,000,000units of electronic waste is scraped annually. 

Consumption of Electronic GoodsQ i k F t El t i W t

Who should be responsible for environmental concerns: who should collect

Quick Facts: Electronic Waste

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 are recycleddiscards are recycled

68 % consumer stockpile dunwanted computers. 

300 – 500 million  end‐of‐use electronic devices are still marketelectronic devices are still market.

Sustainable Business Practices

• An increasing number of private and public sector organizations are announcing significant Environmentalorganizations are announcing  significant Environmental and Cost Saving Initiatives:

Design for Environment– Design for Environment

– Reverse Logistics

– Zero waste initiatives

ISO 14000 ifi i– ISO 14000 certifications

– Environmental Accounting 

Buying GreenB fit f B i GBenefits of Buying Green

• Adopting Environmental purchasing policies not only promotes social, economic, or environmental objective, Greening procurement promoteseconomic, or environmental objective, Greening procurement promotes financial objectives.

Becoming Green:O i f H TOverview of How To

• AIM: The aim of this presentation is to provide a basic understanding of existing strategies for incorporating sustainable consumption practices intoexisting strategies for incorporating sustainable consumption practices into materials and equipment management activities.

Becoming Green:M i A t I t A l i F i dl P d tMapping, Assessment, Impact Analysis: Friendly‐Products

nal

ons

alMapping & Assessment

zation

Relati

nmen

trgan

izpp

lier R

nviron

OSupEn

Becoming GreenM i A t I t A l i F i dl P tiMapping, Assessment, Impact Analysis: Friendly Practices

Equipment & Furnishings• Computers & Business Machines• Audio Visual Equipment• Lighting, HVAC, Alarms etc.

Materials & Supplies• Paper• Office Supplies• Cleaning Agents 

• Carpet,  Furniture• Communications, etc. 

• Fluids• Scrape materials

Becoming GreenM i A t I t A l i F i dl P tiMapping, Assessment, Impact Analysis: Friendly Practices

onal

tion

sntal Mapping & Assessment

izatio

r Re

lat

nmen

Organ

pplier

Enviro

OSuE

Becoming Green:E l ti & P fEvaluation & Performance

Examine the environmental performance of  your products and your suppliers.

• Product Attributes• Producer Attributes– Recyclability

– Packaging

Producer Attributes– Corporate philosophy

– Environmental planning– Lifecycle

– Eco‐labels– Environmental Management Systems

– Impacts during use

– Energy Savings

– Environmental Evaluation

– Corporate Reporting

Employee Education– Employee Education

The Evolving Green Supply ChainBecoming GreenBecoming 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