Steps toward a greener supply chain

Little changes can make a big difference

From the way products are packaged to the means by which they're shipped, waste abounds in the supply chain. That's the case made by Paul Brody and Mondher Ben-Hamida, supply chain experts for IBM's Global Business Services. In a recent article that warrants reading on Environmental Leader, the duo have outlined steps toward cutting supply-chain waste.

[ Learn how vendors such as HP and IBM are working with suppliers to make their supply chains greener. ]

Among their suggestions, Brody and Ben-Hamida recommend redesigning the product. "Even simple changes to a product design -- from reducing weight to making it easier to disassemble -- can reduce energy consumption and waste throughout the product life cycle," they write. Making a computer or other electronic device easier to disassemble certainly makes it easier to recycle and reuse components for future products.

Brody and Ben-Hamida also suggest that companies "plan smarter routes." "Simple intuition seldom leads to optimal solutions, and over time tradition and inertia often allow routes to settle into patterns that are inefficient and wasteful," they argue. This can be a complicated endeavor -- but smart technology can help.

Consider that the U.S. Postal Service found a way to save more than $5 million on transportation costs using a Highway Corridor Analytic Program (HCAP), co-developed by IBM.

Using optimization technology, HCAP determines the most efficient plan for using existing mail-transportation assets in various types of scenarios, such as bulk-mail delivery, peak holiday capacities, weekend transportation, and along highway corridors. It accounts for specified parameters such as starting and ending points, delivery times, truck-capacity restrictions, and mail classes. The system analyzes existing scenarios, then generates alternative loads and routes that would save USPS money but still meet all of its service goals.

Also on Brody and Ben-Hamida's list: Consolidate shipments. "There's a reason Amazon charges you less for shipping if you consolidate your order and have all items shipped at once -- it saves them money," they write.

Indeed, Welch's is leveraging a business intelligence solution from Oco that, among other things, helps the company consolidate shipments: It helps to ensure that truckloads delivered by its carriers go out full. The idea is, customers are already paying for the full truck when it delivers goods, even if it's only halfway or three-quarters loaded. With the BI system, Welch's can tell if a buyer's shipment is coming up short of full capacity and help them figure out what else they can order to max it out, thus saving on future shipping costs.

Welch's approach borrows from another one of Brody and Ben-Hamida's suggestions: Coordinate with partners. The company is working collaboratively with carriers to report on actual delivery performance, such as whether a shipment arrived on time. This gives the company a means of quantifying carrier performance.

One other suggestion for a greener supply chain from Brody and Ben-Hamida: Shrink packaging. "New materials and designs allow companies to make packages smaller and lighter, allowing shipping containers to hold more and trucks to carry more products in a load. Improved package designs can also reduce the burden of recycling or eliminating packaging materials at the end of the chain."

On that note, HP recently came up with a clever approach to reducing the packaging of one of its notebooks, the Pavilion dv6929 (available only at Wal-Mart). Rather than cramming the system in a bulky cardboard box, it comes in a protective messenger bag made from 100 percent recycled materials. Not only does this approach reduce product packaging overall by 65 percent, according to HP, it will help the company save money on transporting systems "by removing the equivalent of one out of every four trucks previously needed to deliver" them.

You can read "12 Steps to a 'Greener' Supply Chain" on Environmental Leader's Web site.