The Greening of the Supply Chain

Jonathan D. GatrellVP – Industry DevelopmentInovis

Virtualization

Sustainability

Green IT

ComplianceSer

vers

desi

gn

disp

osal

Transportation

Data CentersCarbon Footprint

Carbon Credits

greenhouse

eInvoicing

RoHS

WEEE

emissions

sourcing

recyclable

mate

rials

packaging

environmental

brundtland commission

qua

lity

biomim

icry

audit

analysis

redu

ctio

n

treehugger

governance

The Supply Chain is the Center

Let’s start with the business.

SOURCE: AMR Research

… A Branded Global Citizen…

• Collaboration tools can reduce travel– Video/Tele Conference

• Supply chain management tools can optimize supply chains for environmental factors– Routing

– LTL

• E-business initiatives provide low impact shipping options. – Direct to consumer

– Cross Docking

• Business activity monitoring and alerts can drive improved decisions

… Green Opportunities …

…Where Industries are Focusing…

First Degree: InfrastructureSecond Degree: Applications & Process

Third Degree: Materials and Service

SOURCE: Gartner

By 2009, one-third of IT organizations will have "improved environmental sustainability" as a top IT management issue, and included as a priority item in the list of buying criteria.

By 2011, suppliers to large global enterprises will need to prove their green credentials via an audited process to retain preferred supplier status.

…Gartner: Green IT is REAL…

Globalization

Compliance and Corporate Conscious

Increasing Sourcing Complexities

Global Retailers

PrivateLabel

Multi-Channel Commerce

The Greening Consumer

Drivers for a Green Supply Chain

Let’s start with the customer.

The Customer has the Power

Power to buy what they want!

TransparencyCustomers connect directly with other customers and organizations for recommendations.

…The Race for the green consumer…

Consumers do make decision on a brands environmentalism: •the products they purchase (79%),

•the products/services they recommend to others (77%),

•where they shop (74%),

•where they choose to work (73%)

•where they invest their money (72%).

SOURCE: 2007 GfK Roper Green Gauge

Not just Consumerism – Economics too!

Ocean Freight

Air FreightConsolidate

Customs

Customs

Deconsolidate

• Demand Driven Supply Chains

• 9 of 10 suppliers source from China

• Multi-Modal Options

… A world of opportunity…

Globalization

Longer supply chains limit visibility, increase complexity and impact the environment.

“$200 Oil”

Higher transportation costs a key driver to impacting change

Cost Reduction

Greener manufacturing and material selection can reduce cost of production

The Supply Chain Executive Goes Green

Compliance

Automation, Visibility and Control

“How much do you collaborate with trading partners for the following activities?”

…Collaboration Is Increasing…

Source: 2006 Shared Strategy Study by Forrester Research, Consumer Goods Technology, and RIS News

BASE: 89 retailers and 80 manufacturers

“To what degree to you agree with the following statements?”

…Collaboration Creates Value…

Source: 2006 Shared Strategy Study by Forrester Research, Consumer Goods Technology, and RIS News

BASE: 89 retailers and 80 manufacturers

“Which of the following are challenging or extremely challenging to yourcompany’s ability to collaborate with its trading partners?”

…But Collaboration is Hard.

Source: 2006 Shared Strategy Study by Forrester Research, Consumer Goods Technology, and RIS News

BASE: 89 retailers and 80 manufacturers

Green Retail

Mervyns Automation

Manual vendor set-up limits responsivenessand paper laden.

A Manual vendor setup process

Buyer submits new

vendor request form

Merchant sends

paperwork to Buyer's finance

Signed financial

agreement from vendor

New Vendor approved by

DMM

Vendor Setup in Financial System

Vendor Welcome

Letter

Vendor Setup Form

SendVendorTraining

Docs

Set up Vendor Portals

Set up Product

Information

Send Onbording

process notification

Create ticket for EDI

Run onboarding/certification

process

Validate ID and add to

translator or gateway

Notify New Vendor Teams:Buyer

Finance

Mervyns Solution

• Reduces vendor set-up by 10x.

• Reduces internal resource requirements.

• Accelerates time to automation.

• Reduces paper.

Vendors

Vendor certification is

manual

Expense offsets aren’t effective for on-boarding

Data mapping bottlenecked

Store sales suffer

Cross-docking constrained

Boscov’s Optimization

Improved on boarding and distribution model reduces impact on the environment.

Boscov’s Solution

• Increased e-commerce connections from 200 to 600 vendors.

• Reduced operational costs.

• Distribution center times shrink from 2 days to 4 hours.

• Faster product to more stores.

Green Manufacturing

The Greening of HP

On boarding of new shipment messages, sourcing of material and recycling initiatives

IBM: Global Accountability

On boarding of suppliers, channel management, compliance and scorecarding

1. Know where you stand - Who and What have you automated?

2. Have a plan – Who and What can you STILL automate?

3. Incorporate "green" into your existing procurement processes – Remove paper where possible.

4. Communicate your goals and standards to your supplier community – Align your business community

5. Do the "easy stuff" first – More partners, more documents

…A 5 Point Action Plan …

What can YOU do today?

use this presentation in your business to create awareness

forward it to 5 other colleagues to make

OR

Difference

The Greening of the Supply Chain

Jonathan D. GatrellVP – Industry DevelopmentInovis