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Archives for October 2009

All those little (carbon) labels

By Jonathan Wright | 10/20/2009 | 1:55 PM

All those little (carbon) labels

 

A couple of my colleagues met with Carbon Trust last week.  Carbon Trust is the UK organization that wrote a detailed standard for identifying the carbon footprints of individual products (PAS 2050).  From the discussion, it certainly seems like there is a growing interest across manufacturing and retail companies of all sizes to include product carbon footprints on their products – following on from what some of the big brands have already done.

  

Similar to nutrition and food safety labeling, carbon labeling will require organizations up and down the supply chain to work together to come up with accurate calculations that can be trusted and used by consumers to make product comparisons.  Consumers expect to have “corporate assurance” that the information they are being given about a product is accurate and consistent with the information given on alternative products – not a trivial assurance.  

 

For example, to be able to use the Forestry Stewardship Council label and to earn the associated certification, an organization must first adapt its management and operations to conform to all applicable Council requirements.

 

Now, the key question for us in logistics and transport is to understand the data requirements for calculating the carbon footprint for a product (or more likely for us a consignment).

 

It’s not easy to conduct these types of analyses.   Just think of a shipment leaving a factory in Asia and heading to a retail store in Europe. The transaction involves a number of sub-contractors; different sorting, packaging and storage logistics centers; and a number of different transportation modes including sea, road and rail freight. In addition, there is the allocation of emissions from all these activities to a single consignment, although a multitude of very different products are shipped together. You get the sense of the complexity involved in this consignment-level reporting exercise?

 

While there currently are some great tools to help companies within the supply chain drive relative improvements, we still need standards across the end-to-end supply chain to ensure consistency.

 

The World Economic Forum’s Logistics & Transport group (with Accenture  support) is making good progress on developing guidance.  And, some of the world’s leading freight and logistics companies and the main advisory organizations like WBCSD, WRI and Carbon Trust are helping to underscore the need for a transparent and more standardized product-level foot-printing framework and developing industry-specific standards and guidelines to report consignment-level emissions.

 

That doesn’t take away from the need to be able to calculate consignment-level emissions in response to client queries (and I am working with a major global manufacturer on just such a request for their Asian plants). It is clearly not a straightforward exercise, which is why we are working with some of the world’s largest logistics and transport companies to automate consignment-level emissions reporting, increase the accuracy of the emissions reported from subcontractors and better integrate reporting with all other key functions of the companies.  

 

Ultimately, this will enable logistics and transport organizations to quickly and effectively provide their clients the environmental impact associated with shipping their products and go some way towards delivering corporate assurance on footprint labeling.

Headphones … and packaging

By Jonathan Wright | 10/05/2009 | 5:15 PM

I had intended to take a look at carbon labelling this week, but got distracted with packaging – I just bought a new set of headphones, and saw again just how much packaging there is with these kinds of things, which inevitably got me thinking…

 

My new headphones are pretty small, perhaps  10 cubic cms in freight terms – but I ended up with a much greater volume of blister packs, cable ties, and inserts in my recycling bin – probably 10 times the cube of the headphones, plus presumably a small amount more cube from transit packaging which was left at the warehouse or store.

 

Clearly, while it seems like there are a lot of over-packaged products in the world, packaging does have a role to play – hopefully, packaging is only added when it is saves more than it costs.  Those savings can include the environmental benefits of less waste resulting from damages and so on, as well as adding value through consumer information and marketing, improved ease of handling etc.

 

It’s also pretty clear to me, however, that many organizations do not yet have a clear packaging strategy – a way to manage the best fit compromise among the numerous parties involved – from Quality Assurance to Procurement, Marketing to Store Operations , Manufacturing to Distribution, Suppliers to Customers – and not forgetting the Corporate Social Responsibility team.  I think that organizations will increasingly need this coordination, as they look to balance the trade-offs among Logistics, Marketing and CSR to achieve the best possible balance for the customer.

 

I’m always surprised to see just how much cost is associated with packaging as compared with product. Lifecycle modelling of a carbonate drink seems to suggest packaging is over 10% of total product cost.  In the US, about 15% of all waste is consumer waste from packaging.

 

Thinking about that in carbon emissions terms, for many processed foodstuffs, packaging totals about 7% or 8% of the total carbon footprint.  The New York Times reported earlier this year that packaging contributes about 15% of the emissions produced by a half-gallon of Tropicana Pure Premium orange juice (How Green is my Orange?).

 

Applying the traditional 3Rs (REDUCE, REUSE and RECYCLE) hierarchy to this, there is a lot we can do across the end-to-end supply chain – not just in the consumption phase – to reduce waste.

 

REDUCE:

-   Applying Design for Environment principles to transit packaging as well as consumer packs

-   Optimizing box fills and managing minimum order quantities

-   Improving planning and order consolidation

-   Using postponement strategies

 

REUSE:

-   Switching transit packaging types to reusable types from card boxes

-   Using multi-trip pallets instead of one-ways

-   Equip the supply chain to manage re-use of returnable consumer packaging

 

RECYCLE:

-   Implementing waste stream separation in DCs and stores as well as in manufacturing sites

-   Taking back packaging materials from stores and home delivery locations to DCs for recycling

-   Renegotiating contracts with waste vendors to include specific service level agreements on recycling

 

Across the wider supply chain, more collaboration, more smart thinking about re-usable transit packaging – and potentially switching to dematerialized supply strategies and postponement – can yield big benefits in reducing unnecessary packaging. 

 

My headphone packaging was recyclable, but I can’t help thinking that much of the packaging could have been reduced or reused – rather than recycled (or disposed of in many cases) – had there been more of an integrated packaging strategy at work.

 

On a lighter note…….. I was recently reminded about the ultimate packaging reuse strategy – an edible plate that was launched in Japan a few years back – the idea being that you ate dinner from it, and then ate the plate afterwards.  This has evolved into the corn-based, 100% biodegradable packaging materials now seen in many coffee shops (see Biodegradable GreenGood® PLA Products as an example).  Although you can still get the edible plate too if you want it……. 

 

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Jonathan Wright

Jonathan Wright

Jonathan Wright is a Singapore-based senior executive in Accenture's Supply Chain Management practice with global responsibility for the company's supply chain fulfillment client work. With 17 years' experience, he is a recognized thought leader in supply chain transformation and sustainability. He joined Accenture in 1997 after five years with Exxon Mobil Corp. Since joining Accenture, Wright has worked in the retail, communications, high-tech, and aerospace and defense sectors. He is a Fellow of the Chartered Institute of Logistics and Transportation.



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