Do you want to create green supply chain? Follow these steps:
- Establish Green Supply Chain Metrics
- Conduct Carbon Footprint Analysis
- Quantify Emission from Raw Material Sourcing
- Quantify Emission from Inbound Logistics
- Quantify Emission from Manufacturing
- Quantify Emission from Outbound Logistics
- Apply More Green Supply Chain Best Practices
1. Establish Green Supply Chain Metrics
Many supply chain management initiatives start with the performance measurement. Leading consulting firm like LMI Government Consulting utilized cross industry platform, SCOR Model, to deliver a quick measurement of green performance as below,
- Compliance costs, Non-Compliance costs and Energy costs can be found in a standard financial statement.
- Policy compliance such as % of correct packaging, % of supplier with EMS system, % of carriers with environmental criteria is one type of supplier evaluation criteria.
- Amount of wastes such as % of product returned, % of product disposed against product re-manufactured, liquid waste, solid waste and recycle waste can be found in the production records.
One special type of metric is amount of Carbon Emission. This measurement needs lot of work and will be discussed in next topic.
2. Conduct Carbon Footprint Analysis
Another piece of information you require is called the emission factor. This is the amount of CO2e released for 1 kwh of electricity consumption. Then, the basic idea to calculate CO2e emission is , energy consumption*emission factor.
4. Quantify Emission from Inbound Logistics
The same logic (energy consumption*emission factor) also applies to an in-house manufacturing. Anyway, the amount of available data will be more extensive. You may want to incorporate the different sources of energy in computation which is summarized as below,
The same logic (weight in tonnes x distance in km x emission factor / 1,000,000) also applies to outbound logistics. Anyway, you may find that you have hundreds or even thousands of delivery destination. Then, how you can determine the distance?
The first piece of information you need is an geographic coordinate. The easiest way to get it is to used an geographic coordinate published by U.S. Census Bureau.
As you can see, if you know the zip code, you can get Latitude and Longitude easily. Then, you use lat and long to compute the distance between you and your customers as below,
7. Apply More Green Supply Chain Best Practices
- Green House Gas Protocol has established the tools in excel to calculate the carbon emission from various activities in supply chain. Even though extensive data input is required, they are more accurate. They are freely available to public here.
- Creating the awareness about a green program is also the challenging task. With Sourcemap , you can create a visual representation of a current supply chain on a geographic map with the emission data on the map and it's free!
- Ecomapping is also the visualization tool to help you identify source of wastes in both manufacturing and office environment. This tool also provides a guideline how to eliminate source of wastes.
- Environmental Management System is inevitable part of initiatives. Global Social Compliance Program has created the tools called The GSCP Reference Tools. These tools provide a solid methodology to audit Environmental Management System. You can use these tools to conduct a self assessment at your company to identify issues with management system, energy and greenhouse gas, water, air pollution, waste management, pollution prevention, incident management, contamination, land use and nuisance. The same tools can also be applied to suppliers audit.
- For small and medium business enterprises, an environmental management program can be too complex. EMAS Toolkit for Small Organizations by European Commission will provide basic information about an environmental management system, how to implement the program and a useful case study.
- United States Environmental Protection Agency (EPA) has established a program called SmartWay. The purpose is to try to reduce carbon and air pollutant emission in transportation sector. EPA has compiled the list called "Current Carrier Ranking and Emission Rates". As a freight shipper, what you can do is to select the carriers with lower emission.
- Sustainable Manufacturing Toolkit is another useful tool from Organization for Economic Co-operation and Development (OECD). This tool provides 7 step to environmental excellence with key performance indicators, action steps and good practices.
- Carbon Disclosure Project provides the opportunity for every company to disclose the information about the state of green program. Registration is required, after that, you will have to answer a questionnaire. The result of a questionnaire will help you identify the area of improvement.