One of the overriding themes at this year’s 6th Annual International Symposium on Supply Chain Management was Green … and how you need to be ready for the Green Goblin before he takes a huge bite out of your bank account. Carbon caps and strict regulations are starting to take effect around the globe, and if you’re not ready, it could cost you a lot more in fines and carbon credits than it will cost to be proactive and identify year-over-year sustainable savings by acting now.
Chances are you won’t be hit as hard as public sector institutions in BC, who only have until 2010 to be carbon-neutral, or face an offset of $25 per ton of CO2 emitted, but there’s a lot of talk these days among the more progressive provinces and states in North America to institute carbon taxes, and you can be sure that, one way or another, some form of carbon tax, be it direct or indirect, is going to hit you eventually.
Fortunately, there are a large number of easy ways to take a big bite out of your carbon footprint if you just look. An easy first step is facility retrofitting and IT virtualization — both of which make a big impact on energy needs. Most buildings use at least 40% more energy than they need to just in heating and cooling, and today’s technology generally allows for retrofits, with 30 to 50 year life-spans, that starts paying off in as little as 5 years. Furthermore, most organizations use 30% to 80% more energy to power their IT infrastructure than is necessary, and today’s virtualization solutions (as I’ve discussed in this post on data centers and this post on desktops) often have a 12 month payback (as per this savings template)!
If you’re in transportation, you can optimize routes, keep your fleet well maintained, and use nitrogen-filled tires — which both extend tire life span and reduce average fuel consumption by 5%. You can also optimize loads, using appropriate load planning optimization software, and work with your customers to maximize available lead times, which may let you use rail instead of truck for the majority of the distance, which emits significantly fewer units of CO2 per pound.
And you can get creative like UBC did to reduce your carbon footprint. They analyzed their carbon footprint and found a large amount of it was due to mail and package deliveries across campus. The courier that they did the least business with made an average of 85 stops per day. Considering that they already had centralized mail distribution, which now runs off of electric vehicles (which can be powered by clean hydro-power) there was no reason that they couldn’t centralize courier drop-off and pick-up to 2 drop points, which would reduce CO2 production from deliveries by over 95%! Plus, they also substantially reduced the cost to the couriers, many of whom had to have 2 or 3 trucks dedicated to their campus, and they can use this as leverage in negotiations to reduce annual courier payments by hundreds of thousands of dollars.
They also found that a lot of carbon was contained in the unnecessary packaging that accompanied the majority of deliveries on campus. So they went to their largest supplier, who was just a few kilometers from campus, and told them that they were not allowed to add packaging to anything delivered anywhere on campus and they were to start using reusable totes (since anything that needed safety packaging would have safety packaging added at the manufacturer). Whenever the supplier dropped off a standard cage of totes at the central mail distribution facility, they could pick up an empty cage of totes ready for return. They plan to roll this out to more suppliers … and the environmental … and cost … savings are going to add up here as well. (They are a large University of tens of thousands and faculty, staff, and students … think of all of the stuff that flows into a campus on an annual basis!)
They’ve also instituted a program where a product cannot be requisitioned unless it is locally recyclable or the manufacturer has a recycling program where they will take the product back when it’s end-of-life is reached. That way, they are not responsible for the CO2 associated with disposal of a product. And they’ve saved money in all of their initiatives … saving over 25 Million since the Sustainability Office was formed in 2001.
And the good ideas don’t stop here. There’s no reason you can’t go paperless in your office. What do you really need to print out besides the final version of a contract where you need a signature? A fax? Nope – it’s already in e-format and ready to be redirected to a user’s inbox. A policy document? Nope … leave it on the central server, where it is automatically backed up to redundant storage nightly. A meeting report? Nope! Either give your workers laptops or equip the meeting room with thin terminals and flat-screens, which could be laid flat under a glass table, and let everyone access their own copy of the report electronically in the meeting. If you set your mind to it, you’ll find that you rarely need to print anything … especially since the majority of what is printed in an average office (up to 80%, in fact) ends up in the recycle bin by the end of the day. It’s much more economical to give all of your workers two large LCDs than to buy paper. Much more!
So get creative, and cut back on carbon wherever you can, or the Green Goblin might be taking a big bite out of your bank account when the regulations come in, and you have to buy credits off of the exchanges (Montreal, Chicago, EU) where they are now trading anywhere from $6 to $30 a ton.