IBM shows the way to greener supply chain
New tool analyses impact of emissions policies on other parts of business.
By Matthew Broersma | Techworld | Published: 13:40, 23 May 2008
IBM has introduced a carbon-emissions modelling tool aimed at helping businesses analyse the environmental impact of supply-chain decisions and to devise alternative business practices.
The Carbon Tradeoff Modeler is designed to help businesses take an integrated look at how changes designed to reduce carbon emissions will affect other parts of the business, such as inventory levels and on-time delivery.
Often emissions reduction and costs can be reduced at the same time, IBM said. The tool analyses factors from both the manufacturing and the distribution points of view.
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Environmental policy has become a top priority for businesses at the moment, according to IBM, and the company pointed out that responsible policies can give companies an edge with consumers as well as helping to cut costs.
An active environmental policy can also make an impact on other organisations in the supply chain, said Sanjeev Nagrath, leader of supply chain management for IBM Global Business Services.
"By incorporating research-based tools to model the cost and carbon impact of key steps in the supply chain, organisations now can take action to reduce CO2 emissions and influence suppliers' behaviour toward reducing their own greenhouse gas emissions," he stated.
Examples of the analyses the tool can carry out include the impact changing package sizes or packaging materials, the impact of lot sizes, and the influence of order consolidation and inventory replenishment policies.
In each case the tool looks at emissions impact as well as the effect on factors such as transportation requirements, costs and on-time delivery.
The modeller can help pinpoint courses of action that strike a balance between the need to reduce emissions and other business requirements, for instance analysing shipment frequency, inventory replenishment policy and routing policy, IBM said.
Evaluating the environmental impact of business decisions is not always straightforward. For instance, datacentre product vendors often give very different metrics on environmental effects, according to a study released last week.
