There have been a lot of words written about “Green” strategies, Lean Manufacturing, Lean Supply Chains and Sustainability over the past decade. It has often appeared that the actions taken by North American based companies have not lived up to the rhetoric. While reducing carbon use and water consumption have been laudable causes, the cost of change has been an impediment to progress.
We may have reached a turning point in the “green” movement. Judging by the remarks of several panellists at last week’s SMC3 conference in Atlanta, there appear to be some very exciting initiatives under way that have the potential to move America to the forefront in this area and create a long term competitive advantage.
Mary Ellen Mika, Supply Chain Manager at Steelcase, gave a fascinating presentation on the green initiatives under development at her company. She noted that over 90 percent of RFP’s include Sustainability requirements. This pattern is mirrored in Canada with the freight RFP’s that my company has been engaged to perform over the past several years. Carriers are expected to participate in the Smartway program and are required to articulate their energy savings initiatives.
Mary Ellen also outlined how aggressive Sustainability KPI’s are being developed and achieved by her company. Specifically she highlighted her company’s use of returnable blanket wrap rather than corrugated packaging as a way to reduce shipping costs and damages. To limit the amount of material going into landfill sites, compostable agricultural waste (mushroom roots) are being used in place of foam. Her company’s furniture products are being designed in such a way that they can be disassembled at the end of their service life and placed in recycling bins. A scorecard system is being utilized to identify and reduce urgent items that require a high carbon footprint application (e.g. air freight).
David Hyatt, Senior Assistant Dean at the University of Arkansas’s Sam Walton College of Business, outlined the structure and composition of the Sustainability Consortium. There are now over 62 companies on the team including Wal-Mart, Safeway and Best Buy. This is a fourfold increase over the number of participants in the third quarter of 2009. The initial centre of attention has been on Food and Beverage, Electronics and Home and Personal Care Products. This collaborative effort is focused on taking a “pragmatic, science-based approach” to Sustainability. The objective is to create standards for business application and then informing decision-makers. The Packaging sector will be added to the list in the spring of 2011. The Energy sector will follow at a later date.
The trucking industry perspective was provided by Tommy Hodges, immediate Past Chairman of the American Trucking Association and Chairman of Titan Transfer. Tommy spoke about the fact that the trucking industry now recognizes that fuel is a scarce resource and that 1 gallon of fuel burned equals 22.2 lbs of CO2. He then provided an overview of the ATA Sustainability Policy.
- 65 National Speed Limit—All Vehicles
- Decrease Idling
- Increase Fuel efficiency with SMARTWAY
- Reduce Congestion through Highway Improvements
- More Productive Vehicles
- Support National Fuel Economy Standards for TRUCKS
Tommy highlighted a number of “low hanging fruit” opportunities for truckers to lessen carbon usage. They include:
- Reducing Idling rates to as low as 4% with use of APU’s
- Using Route Optimization Software to reduce deadhead miles and out of route miles
- Aerodynamic design of trucks and equipment to reduce rolling resistance
The message from this set of presentations was that American business is now embracing energy efficiency. If shippers and carriers take a leadership role in this area, this could significantly improve America’s competitiveness and cost structure, thereby improving the economic prospects for the country down the road.
