The Evolving Green Supply Chain The Evolving Green Supply Chain
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Transcript of The Evolving Green Supply Chain The Evolving Green Supply Chain
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The Evolving Green Supply ChainThe Evolving Green Supply ChainDwayne Cole, Patrick Penfield & Scott Webster
Whitman School of ManagementSyracuse UniversitySURE ConferenceNovember 5,2009November 5,2009
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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
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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
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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
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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.
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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
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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?
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Environmental Pressures
Customers
Climate Change
BusinessInvestors/Shareholders
NGO’sInvestors/Shareholders
Natural Resources
Governments
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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
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Input ‐ Life Cycle Assessment
•Design Discipline•Minimize Environmental impact – Products
– Technologies
– Materials
– Processes
– Industrial Systems and Activities
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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
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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
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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
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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
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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
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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
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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
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Transformation‐ Energy
• Fuels – Replacing Oil• Alternatives• Regional Renewable Energy Sources
– Ocean Energy
– Wind
– Solar
– Bio MassBio Mass
– Hydrogen
• Batteries
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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
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Transformation ‐ Process
• Process Tools– Lean
• Eliminating Waste
– Six Sigma• Eliminating Variation• Eliminating Variation
– Conservation• Using Less becoming more efficient
– Environmentally Friendly Processes
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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
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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
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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
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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
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C C t & El t iCase: Computers & ElectronicsEconomic Growth Or Irresponsible p
Consumptions.
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Consumption of Electronic GoodsA S t i bilit C
Economic development or irresponsible production?
A Sustainability Concern
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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).
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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.
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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.
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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
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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.
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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.
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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
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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
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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
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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
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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