Martin Brotschul, senior manager, Supply Chain Strategy Practice, Accenture

In this talk, Martin focussed on the impact of climate change on supply chain business models.

Customers are stepping up to environmental responsibility and demanding sustainability from the supply chain that produces the goods they use. The push has come from Europe but the US is catching up. Many companies are interested in instituting change before legislation is imposed upon them. Companies are also beginning to see how moves towards sustainability can have a significant impact on brand value.

For a typical consumer good, only 12% of the carbon footprint comes from storage and distribution. However emphasis is in this area as this section of the supply chain is highly visible - it’s the truck you see at the end of your street or a towering storage facility.

As the price of oil rises, this will be passed on to consumer goods. Other options include reducing distribution network or looking at new fuels such as biofuels. Trucks can switch to the electric model.

Companies that are already beginning to look into some of these approaches include M&S, Sainsbury’s, Innocent Drinks, Green & Blacks, Walkers and Hewlett-Packard. From the list it’s evident that early advances are being made in Europe. However, US companies are beginning to become more active -the most visible example being Wal-Mart.

What does the future hold?

As well as reducing carbon emissions, manufacturers will have to look further into the external social costs of the goods they produce. One example is battery manufacturers offering ways to dispose of dead cells.

There is growing interest in understanding the impact of various supply chain decisions on a firm’s carbon emission footprint. This awareness is moving rapidly up the corporate, consumer and legislative agenda. I was pleased to see, therefore, that “green logistics” also features highly on the agenda for DIALOG 08.

On Monday February 25th (2:30 pm - 3:15 pm), Martin Brotschul from Accenture will explain the financial case for sustainability and green logistics and use case studies to assess best practices in green logistics and supply chain management.

Ahead of DIALOG 08, David Simchi-Levi, professor at MIT and co-founder of Logic Tools, the supply chain vendor that ILOG acquired in 2007, will present a webinar on Wednesday February 20th called Green & Lean: Reducing Carbon Emission in the Supply Chain in which he will review strategies that allow firms to stay “lean” while becoming more “green.”

David will also be at DIALOG 08 and with a bit of luck I’ll get him to spill the beans about some forthcoming additions to the Logic Tools network design and planning solution designed to help you make your own supply chain that much greener. Watch this space!