Driving Value

Driving ValueAgain, going green is not about implementing a brand-new initiative. It is about incorporating “green” elements into all existing processes and tools. The Supply Chain Operations Reference (SCOR) model, developed by the Supply Chain Council, is a widely used analytical tool for analyzing, comparing and improving an organization’s supply chain. The GreenSCOR Model, developed by LMI Government Consulting, is a modification of the SCOR model. It aims to integrate environmental initiatives and supply chain management. It provides for additional environmental metrics including:

  • Carbon emissions
  • Air pollutants emissions
  • Liquid waste generated
  • Solid waste generated
  • Recycled waste

Carbon emissions continue to be the focus of most green initiatives because this will likely be regulated by the government through the “cap-and-trade” system.

There are four areas where companies can include green considerations in their planning for an immediate impact:

  1. Incorporate the GreenSCOR metrics into the existing supply chain dashboards.
  2. Analyze trade-offs between transportation and inventory policies. Trans­portation policies, such as load consolidation and reduced shipment, usually result in too little or too much inventory. Finding the right balance can increase efficiency and reduce emissions.
  3. Plan compliance of supply chain activities. New government regulations to reduce GHG emissions are expected in the near future. These regulations can be modeled as “constraints” in planning and sched­uling currently being used.
  4. Plan production to minimize energy consumption and GHG emissions. The production/supply planner within an organization can include energy efficiency and GHG emissions from manufacturing activities as additional variables in determining the optimal production plan.

One way to make sure that green metrics are well-known and easily followed is to incorporate them into an existing supply chain dashboard.

These dashboards are often used to manage a company’s S&OP process and would be a natural place to report on how well a company is scoring in its efforts to go green.

By updating the database, a company can easily monitor and report on such green factors as carbon emissions, air pollution emissions, liquid waste generated, solid waste generated and recycled waste. In addition, standard calculations can be incorporated to facilitate each of these key measurements.

By incorporating readily-available technology, easily accessible databases can load data that is publicly available on demand. Using available data will make it possible to measure metric performance over time by any plant location, process and distribution mode. The same data make it possible to establish correlations between emissions, planning scenarios and revenue.

The benefit of including green data in an easily accessible central repository is that it creates a baseline for improving emissions.  It also brings the means for incorporating green considerations into the existing operational planning process.