Dwayne Cole, Patrick Penfield & Scott Webster Whitman School of Management Syracuse University SURE Conference

The Evolving Green Supply Chain

The

Evolving

Green

Supply

Chain

Dwayne Cole, Patrick Penfield & Scott Webster Whitman School of Management

Syracuse University SURE Conference November 5,2009 November 5,2009

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 Revolution

G S l Ch i M d l

– Green Supply Chain Model

– Inputs

– Transformation O

– Outputs

• Part 2: Implementing & Becoming Green – Sustainable Production / Consumption Practices

– Becoming Green

– Conclusion

Turbulent

Weather

Patterns

D ht

Droughts

• 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 i

Population

Growth

P l ti I f f 6 Billi t 9 Billi b 2050

Population 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

Greenhouse

Effect

Th T C b Di id E itt i th W ld

The Top Carbon Dioxide Emitters in the World

Carbon Dioxide Trapped in the Atmosphere –

10 Billi

Causing Temperatures to Rise – 10 Billion 

Tons Put into the atmosphere annually

1. 2. 3. http://www.infoplease.com/ipa/A0933833.html http://carma.org/ 4.

Natural

Capital

p

 ‐

Declining

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 by will be little left by 

the end of the next century.   

Industrial

Revolution

Flawed

• Cradle to Grave

– 90% of materials extracted to 

make durable goods in the U.S. 

b t i di t l become 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 it delivering it

Cradle to Cradle – McDonugh & Braumgart ‐2002

Environmental

Pressures

Green

Sustainable

Supply

Chain

Environmentallyy      Environmentallyy      Environmentallyy Friendly Material Friendly Processes       Friendly Output 

Input      Transformation      Output

Reuse/Reduce Process Disposal Process Process Reclaim

Recycled       Reclaim/Reuse/Improve       End of Life Reclaimed Product Reduce By‐Products Raw Material Reclaimed Product Reduce By Products      Raw Material Recyclable Material

Input

 ‐

Life

Cycle

Assessment

Inputs

 ‐

Impact

Your

Supply

Chain

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

Inputs

 ‐

Misallocation

of

Environmental

Costs

Cost Costs/Rent Treatment

Materials and 

Overhead Materials and  Labor (A) Overhead Labor (B)

Prod ct B Prod ct A

The Lean and Green Supply Chain – EPA 2000 Product B 

Improved

Allocation

of

Environmental

Costs

Salaries Costs/Rent Treatment Cost

Materials and 

Overhead Materials and  Labor (A) Overhead Labor (B)

Prod ct B Prod ct A Product B 

Product A

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

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 l

carbon dioxide emissions lower 

energy use to produce the soy 

foam. 

• The annual worldwide market for 

automotive foam is 9 billion 

pounds pounds. 

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

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 fuel

reused, or used as fuel.

• No more garbage ‐ Commodity

Transformation

‐

Energy

• Fuels – Replacing Oil

• Alternatives

• Regional Renewable Energy Sources – Ocean Energy 

– Wind

– Solar

– Bio MassBio Mass

– Hydrogen

Transformation

 ‐

Gather

and

Use

Energy

Efficiently

• Coax every last Kilowatt out of fossil 

fuels we are using

I th l t t t

• In the last twenty years

– Japan’s economic activity has increased 

while its energy consumption has 

d d

decreased

• Energy Audits

• Switch to Energy Efficient Machines –Switch to Energy Efficient Machines 

Tax Incentives – Take Advantage

• Do more with less!

Transformation

 ‐

Process

• Using Less becoming more efficient

Transformation

 ‐

Wal

‐

Mart

&

UPS

–

Improving Their Processes

Improving

Their

Processes

• Hybrid Hydrogen Trucks 

• Auxiliary Power Units on Trucks

• Wind skirts on trucks to reduce air 

resistance

Si l Ti D l

• Single Tires vs. Dual

• UPS – Eliminating Left Hand Turns

Output

 ‐

Diversify

and

Cooperate

to

Fully Use the Habitat

Fully

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 Recycley  productsp  at end 

of life

Output

 ‐

Product

Life

Extensions

• Reduces Environmental Impact

• Shell the same ‐ new software 

upload

• Transforms it into a new product

23

Output

 ‐

Design

for

Services

• Services people desire

• Customer would effectivelyy 

purchase 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 itself the television itself

C

C

t

& El t

i

Case:

Computers

&

Electronics

Economic

Growth

Or

Irresponsible

p

Consumption

of

Electronic

Goods

A S t i bilit C

Economic development or irresponsible production?

Consumption

of

Electronic

Goods

Q i k F t T d i t & l t i ti

Quick 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 

Consumption of

Electronic

Goods

Q 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

3,028 million

2000 

2000 ‐‐2007 

2007 

cell phones retired 

annually. 

133,000

units of computers are 

thrown away each day.

400,000,000

units of electronic waste 

Consumption of

Electronic

Goods

Q 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 recycled discards are recycled

68

%

consumer

d

unwanted computers. 

300 – 500 million  end‐of‐use 

electronic devices are still market electronic devices are still market.

Sustainable Business

Practices

• An increasing number of private and public sector 

organizations are announcing significant Environmental organizations 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

Buying

Green

B fit f B i G

Benefits of Buying Green

• Adopting Environmental purchasing policies not only promotes social, 

economic, or environmental objective, Greening procurement promotes economic, or environmental objective, Greening procurement promotes  financial objectives.

Becoming

Green:

O i f H T

Overview of How To

• AIM: The aim of this presentation is to provide a basic understanding of  existing strategies for incorporating sustainable consumption practices into

existing strategies for incorporating sustainable consumption practices into 

Becoming Green:

M i A t I t A l i F i dl P d t

Mapping, Assessment, Impact Analysis: Friendly‐Products

n

al

onsal

Mapping

&

Assessment

zat

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n

R

ela

ti

n

men

t

rg

an

iz

p

plier

R

n

vir

o

n

O

Su

pEn

Becoming Green

M i A t I t A l i F i dl P ti

Mapping, 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

Becoming Green

M i A t I t A l i F i dl P ti

Mapping, Assessment, Impact Analysis: Friendly Practices

o

nal

tionsnta

l Mapping

&

Assessment

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at

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r

Re

la

t

nme

n

O

rg

an

pplie

r

En

vir

o

O

Su

E

Becoming Green:

E l ti & P f

Evaluation & 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

The

Evolving

Green

Supply

Chain

Becoming Green

Becoming

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