As businesses become more and more serious about this, managers will increasingly find themselves asking, What is it about the way we operate that causes our entire supply chain to waste energy? There will be many surprises. One should not conclude that all lightweight snacks, nearby farms, or recycled materials are preferable from a climate change perspective. Every supply chain is different, with unique opportunities for using information technology, management practice, incentives, and sheer common sense to reduce the carbon footprint.
The first step is thus understanding the specific carbon footprint of your business’s supply chain, in the context of overall strategy and operations. The second step is discerning the extent to which emissions are related to your specific needs, versus those inherent in supply chain management. The third is defining your approach. It is likely to be a combination of three types of measures: reducing your footprint through demand reductions and energy efficiency in design, construction, and operation; replacing conventional energy sources and materials with low- or zero-carbon alternatives, including materials and equipment with low-embodied carbon; and offsetting unavoidable carbon emissions through a program of credit trading and other verified means.
Peter Parry ([email protected]) is a vice president with Booz Allen Hamilton in London. He specializes in global energy and has 25 years of experience in corporate strategy development, technology management, and commercial negotiations. He has worked extensively with governments, national and international oil companies, and independent oil and service companies.
Joseph Martha ([email protected]), a vice president with Booz Allen Hamilton in McLean, Va., is the coauthor, with David Bovet, of Value Nets: Breaking the Supply Chain to Unlock Hidden Profits (Wiley, 2000). He has worked with numerous manufacturing, distribution, and retail companies in the areas of supply chain management, logistics strategy, distribution operations, and information systems.
Georgina Grenon ([email protected]) is a senior associate with Booz Allen Hamilton based in Paris. She is the director of the firm’s business development and intellectual capital efforts involving manufacturing and cross-industry supply chain issues.
Also contributing to this article were Booz Allen Vice President Nick Pennell and Senior Consultant Timothy Gange.