Current performance indicators for supply chain management are cost, time and quality, but what happens when carbon emissions are also included?
In a rapidly changing global economy, supply chain managers face the challenge of adapting to a world where managing carbon emissions is fast becoming a priority. The good news is that according to a recent study conducted by WWL and Tata Motors, reducing carbon emissions in your supply chain does not automatically imply higher costs.
WWL’s webinar, held together with Finished Vehicle Logistics, introduced participants to the concept of adding carbon emissions to current performance measures. WWL also presented its carbon calculator, which can be used to calculate carbon emissions in supply chains.
“Many companies have probably never considered examining their outbound supply chain from an emissions perspective,” says Nils Lie, host of the webinar and WWL Vice President, Business Development, SCM. “The webinar was an extremely effective way to launch and promote the new concept to our target audience.”
At the start of the session, Lie asked participants whether it was possible to reduce emissions as well as costs, and 59 percent answered that lower CO2 emissions would lead to higher costs.
To challenge this perception, WWL has developed a four-step process to lower emissions within the framework of supply chain optimisation. At its heart is a carbon calculator that the company developed, which shows carbon emissions during each step of the journey from factory to dealer.
When using the carbon calculator, WWL can analyse the existing supply chain, identify areas for improvement, create alternative scenarios for optimisation and implement changes.
“We are asking supply chain managers to think outside the box,” says Lie. “We need an innovative approach based on active partnerships with logistics providers and even among OEMs.”
Lie presented the results of a joint case study into the carbon emissions of Tata Motors’ supply chain, from a factory in India to dealerships in South Africa. Across three possible scenarios the modelling showed both reduced costs and reduced CO2 emissions, at the marginal expense of lead times. In fact, in the optimum scenario, costs were down 22 percent, carbon emissions down 33 percent and lead times up by only 2.3 days.
By the end of the webinar the participants’ attitudes had changed dramatically: 90 percent of them believed it was possible to reduce CO2 and lower costs.
“The key message from the webinar is that it is possible to reduce cost and reduce emissions,” concludes Lie. “And we believe that early adopters will be the winners, as it will ensure compliance with future legislation and increase brand value.”
The art of responsible logistics
Responsible logistics means proposing new solutions to give customers a competitive edge.
At sea: Designed for sustainability and low environmental risk, the Mark V will reduce emissions per cargo unit by 10-15%.
On land: The Castor Green Terminal concept uses innovative green technologies, such as photovoltaic solar panels and wind turbine installations, to realise its zero-emission objective.
By law: Always staying one step ahead of the legislation.