Transcript Greening the Supply Chain

Jack Ampuja
Supply Chain Optimizers
Niagara University
Green program motives
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Cost Reduction
Regulatory Compliance
Carbon Footprint
Competitive Advantage
Desire to be a thought leader
for green/sustainability
51%
49%
Rising cost of energy/fuel
Competitive
advantage/differentiator
48%
Current/expected govt.
31%
compliance
Rising cost of
inbound/outbound
24%
transportation
0%
10%
20%
30%
% of Companies
40%
50%
Reduce overall business costs
68%
64%
Enhance social responsibility
48%
Improve profits
43%
Reduce wast/improve disposal methods
41%
Improve visibility into green supply chain
37%
Increase use of recyclables/reusables
36%
Be more fuel efficient
33%
Reduce emissions
28%
New customers or product lines
19%
Reduce use of toxic materials
Improve employee satisfaction/attract talent
9%
0%
10%
20%
30%
40%
% of Companies
50%
60%
70%
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Transportation & Logistics Costs: 2% decrease
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Energy Costs: 6% decrease
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versus no change for Industry Average and 7%
increase for Laggards
Operations and Facilities Costs: 2% decrease
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versus 1% increase for Industry Average, and 4%
increase for Laggards
versus no change for Industry Average and 4%
increase for Laggards
Supply Costs: 2% decrease
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versus no change for Industry Average and 6%
increase for Laggards
33%
Redesign aspects of
logistics/transport system
46%
Redesign
procurement/sourcing
strategy around green
45%
42%
39%
Focus on emission/carbon
footprint reduction strategies
39%
Improve waste/disposal
mgmt (recycling, reuse,
reverse logistics, etc.)
38%
37%
24%
Redesign aspects of
packaging, product design
35%
0%
Best-in-class
All others
5%
10%
15%
20%
25%
% of Companies
30%
35%
40%
45%
50%
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Surpassed stated corporate goal by achieving
25% increase in efficiency between 2005 & ‘08
Used technology for
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Reducing vehicle weight
 1000 lbs = .10% increase in mpg
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Increasing weight per truckload
More efficient routing of trucks
Goal is to double fleet efficiency by 2015 from
2005 standards
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Inventory planning systems use averages to
define truckload: weight, cube, pallet spots
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Many trucks run below max about 5%
New software allows for real ‘full’ truckloads
while staying in legal limits
Can also plan ‘best’ pallet loading techniques
Used by companies such as Procter & Gamble,
Kraft, Nestle, Smuckers
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Patented tractor from HydrogenFS.com
HFS is a group of trucking industry veterans
who pooled their knowledge on efficiency to
create the Green Machine
Key component = Jetstar hydrogen booster
invented & manufactured in Pickering ON
Engine & transmission are re-manufactured
units: less expensive + more green
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Uses “jetstar fuel”…specially treated water
Electrifying water creates hydrogen & oxygen
Gases are piped to intake manifold
There is no hydrogen storage in truck…gases
are burned as soon as they are created
Hydrogen + oxygen give engine power boost &
burn diesel fuel completely reducing emissions
to almost nothing
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Engine is most widely sold Detroit Diesel ever
Larger single tires filled with nitrogen
All aluminum wheels – including 5th wheel
Air deflectors on side & top
Carbon fiber springs
Alan Bishop electric engine fan system
Jetstar hydrogen booster for engine
Synthetic oil is changed after 100,000 miles
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Engine burns fuel more completely generating
more power & less carbon output
All technology used is available to any firm
Green Machine was conceived by trucking
industry veterans and assembled in Michigan
Verified national test shows tractor hauling
loaded trailer averages 8 mpg…30% gain with
emissions below 2014 EPA standards
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Latest test = 10 mpg
“The hydrogen-injected trucks will enable a 15%
increase in fuel economyand exceed vehicle
emission standards by 11%. These vehicles
inject small amounts of hydrogen and oxygen
into the engine’s air intake, resulting in a
shorter burn time that uses less fuel and
produces cleaner emissions. The company
expects to save more than 4,200 gallons of fuel
per hydrogen truck and eliminate over 216
metric tons of greenhouse gas emissions
annually.”
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SaaS - Software as a service is major benefit for
smaller companies
Gets them into the game at low cost
 Far surpasses performance of manual systems
 TMS becomes viable for almost all firms
 Lets user focus on business issues rather than IT
 Leading SaaS interface with major ERP packages
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$000
Baseline
Locations
Least
Final
Transport
34,500
26,800
30,600
29,900
Inv & OH
19,750
22,500
13,400
15,300
Total
54,250
49,300
44,000
45,200
%
100
91
81
83
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Lowest cost network
Best service network
Optimal combo of cost and service
Lowest carbon footprint network
Management now has a $ target between
lowest cost and lowest carbon
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They now know what it will cost the company to
operate a green network
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Adding carbon footprint weighting to model
allows for comparing environmental impact of
various scenarios
Comparing total miles of different logistics
networks – inbound & outbound – allows for
identification of lowest miles of movement
Calculates $ of environmental improvement