Tag Archives: penske

2010 Green Supply Chain Awards Recognize Companies for Innovation, Efficiency, Environmental Performance.

17 Nov

Last week, the Supply & Demand Chain Executive magazine announced the recipients of its 2010 Green Supply Chain Awards.  These awards recognize companies that are making sustainability a core part of their supply chain strategies.

This is quite an impressive list and perhaps it shows that “green supply chain” as an integral function in business operations may be cementing itself as a new “business as usual”.  Why?  I have spoken repeatedly about how small to midsized companies are being pressured by primary customers, or original equipment manufacturers are seeing trade barrier blockage due to emerging rules and regulations, and how advancements in accounting for corporate social responsibility effort are on the rise, to name a few.

 “The purpose [of the Green Supply Chain Awards], according to Andrew K. Reese, editor, Supply & Demand Chain Executive is to “highlight a range of strategies and solutions that companies are employing to incorporate sustainability into the supply chain,” Reese said. “Our readers can use this information as a baseline to assess their own efforts in this regard.”  Through an online nominations process, submissions were reviewed based on the clarity and content of the sustainability and related supply chain management goals and strategies, implementation measures taken and performance results to date.

From among the nominated companies Supply & Demand Chain Executive selected those firms that “stood out for their projects to incorporate sustainability objectives into their own supply chains or to enable sustainability in their customers’ supply chains”.  Recipients ran the gamut from logistics and transportation companies (Maersk, DHL, YRC, CaseStack, Penske, Unisourse, Evergreen), , airlines and railways (Norfolk Southern, Cathay Pacific), clothing and footwear apparel (Timberland, Puma), healthcare (Kaiser Permanente), pharmaceuticals (Novartis), retail office supplies (OfficeMax), software and enterprise systems applications (Syspro, Cisco), among others.

Past recipients like Schneider Electric implemented a number of measures through its supply chain designed to manage the Registration, Evaluation, Authorization and Restriction of Chemical Substances (REACH) law entered into force in the European Union in June 2007. Taking proactive action with its suppliers avoided costly disruptions in its operations.

At D.W. Morgan Co. last year, the company introduced iPhone-based mobile communications system, and with it managed to eliminate roughly 50,000 paper way bills annually.

Finally, 2009 winner Conexant Systems consolidated its hubs to two major locations in Singapore and Taiwan.  This consolidation allowed the company to allowing it to mix-and-match its chip sets at those locations, leading to significant reduction and reuse of packing materials, and reduced customer shipment frequency (by up to 75 percent).  Now that is efficient!

These examples  demonstrate how viewing at sustainability as a vital business risk management tool can be effective at all points in the product value chain- from Sourcing/Procurement, to Product Fulfillment/Logistics, Operations, Product Lifecycle Management Design , and other areas of the product value chain.

On top of the SDCE Green Awards list, Inbound Logistics named its Top 50 Green Partners list earlier this year (some of the third party logistics and freight companies are also listed on the more recent SDEC list I might add).  Visionaries every one of them for being innovative and sustainable without negatively impacting their bottom line.  I encourage you to look over the list and the great accomplishments each of these manufacturers and supply chain partners have achieved.

There are a myriad of “boots on the ground” examples where companies have tackled operational efficiency and optimization and managed to reduce their environmental footprint and pare costs of production and product distribution.  All it takes is innovation, a solid cross functional team, leadership support and the will to finish the job. Perhaps next year, your company will make the list.

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“Ch-Ch-Ch-Ch-Changes”: 3rd Party Logistics CEOs Priming for a Sustainable Future, Retooling to Compete

3 Oct

Last week in San Diego (my second hometown), the Council of Supply Chain Management Professionals (CSCMP) held their Annual Global Conference.  Over 3,100 supply chain professionals from 41 countries attended sessions from over 20 tracks.

At the Conference, the 17th Annual Survey of Third-Party Logistics Providers was presented by survey author, Dr. Robert Lieb, Professor of Supply Chain Management at Northeastern University, and Joe Gallick, Senior Vice President of Sales for Penske Logistics. The findings analyzed responses from 31 third-party logistics company CEOs across North America, Europe and Asia-Pacific.  The study was pretty comprehensive in its findings but me being the sustainability focused guy that I am, poured through the document in search of green stats. And as expected they were there.

With 87 percent of the companies reported to be rebuilding their workforces in 2009, CEOs revealed that green practices are still a major priority in the 3PL market.  Further, more than 80 percent of the companies surveyed now have formal sustainability groups within their companies. Even in the wake of the recession, most of the companies surveyed these are still heavily committed to environmental sustainability issues.  Take note of these numbers according to the survey:

  1. Fourteen of the 31 companies began new green initiatives during the year.
  2. Eighteen of the companies expanded existing sustainability programs.
  3. Twenty-five of the companies now have formal sustainability groups within their companies.
  4. Twelve of the 31 CEOs believe that their sustainability capabilities differentiate them from their competitors.
  5. Ranking second and third respectively in North America were opportunities related to potential differentiation based upon the companies’ environmental sustainability capabilities and opportunities related to expansion of service offerings.

Also, 27 of the 31 CEOs noted that some of their manufacturing customers have begun to move toward “near-shoring” options during the past year.  This type of “reversal of fortune” for U.S. manufacturing has been driven by quality control issues, fuel costs for transoceanic shipping and (wishful thinking perhaps) a desire to stand by corporate commitment to curtail carbon emissions associated with reduced fuel usage.

Additionally the report cited several business practice trends, related to risk management/risk sharing; business continuity planning; performance based contracts; and enhanced vendor qualifications.  Each of these growth areas fit well into the sustainable sourcing, accountability and risk management picture that I have spoken about in this space as essential elements of a green supply chain.

While the survey results are impressive, there is clearly room for improvement in terms of implementing actual “boots on the ground” solutions.  There are increasing examples everyday where 3PLs have demonstrably improved operations efficiency while lowering fuel use, energy use, air emissions and indirectly related resource consumption and waste generation. But at the same time, these efforts must be able to strike a balance between cost and benefit that CEO’s can understand, appreciate and rally around.  The stat about CEO’s belief in how sustainability can differentiate their companies (only 38% are on board) tells me that much still needs to be done to make a business case for greening of supply chains.

In another recent reportthis past spring by the Economist Intelligence Unit (EIU) of the Economist Magazine,   supply chains are in a massive state of flux.  Individual supply chains “have shrunk at the margins and the network has become denser”, according to the report. The report concluded that many companies are forced to choose between having supply chains that are simple and compact, or those that are complex, redundant and dispersed.  Efficiency versus resiliency, in effect.   But the report found it possible to increase both efficiency and resilience.

The EIU report cited that a more efficient supply chain enhances two drivers of value: operating margin and asset efficiency.  What was notable to me was a note in the report that said “efficiency also has the beneficial side effect of shrinking the carbon footprint”.  The report cited companies like Coca-Cola, that are looking at ways to move to central distribution, cutting back on empty loads (bringing back post-consumer recycled cans  for instance) as ways to ‘own’ its supply chain and drive efficiency (without losing resiliency).

Issues such as supply chain resiliency and agility are two criteria that should be evaluated as 3PL’s move down the sustainability path and create a business case for operational changes.  I am fairly certain, based on the Penske sponsored 3PL report that CEO’s and other top managers will be asking the tough questions, so be prepared to come to the table with some compelling ideas and numbers to back it up.