Energy News  
Green Supply Chains Need Strategy - Not Hype

File image.
by Staff Writers
Manassas VA (SPX) Apr 30, 2008
INSIGHT has announced concern that hype over "green" supply chains, supply chains that are ecologically-friendly, miss the real opportunity for helping the environment and omit a rigorous approach. Currently, INSIGHT's optimization engine within their flagship software, SAILS 21 gives users the best answer to supply chain planning questions - this is not new.

What is new, for many, is a change in the questions within the strategic supply chain plan, such as minimal energy usage, alternative fuels and sources, and the length of the supply chain, which comes into question when considering outsourcing.

"Balancing minimal cost, green objectives, and customer delivery expectations can produce contrary results," observes Dr. Jeffrey (Jeff) Karrenbauer, president of INSIGHT, Inc. "There are many operational and 'green' advantages to manufacturing locally in the US rather than outsourcing to Asia."

Although the financial markets expect manufacturers to move operations abroad for low-cost labor, many advantages, such as a greener supply chain, are available domestically. Dr. Karrenbauer feels that some financial analysts view supply chain design as a "dark art" or encourage management teams to outsource overseas for low labor cost alone, when that may not be the best answer.

Outsourcing to Asia is intuitively not green. It creates a 12,000 mile supply chain, which adds other issues, such as risk of manufacturing interruption, poor product quality, and higher transport costs, such as from two sets of docking fees, and higher inventory levels to accommodate transit time.

Also, the recent, and continuing, increases in oil prices demonstrate the critical need for firms to regularly evaluate their supply chain strategies. In particular, strategic sourcing (including outsourcing) decisions must be carefully re-examined, especially with respect to international supply chains.

It is also important to recognize that energy price increases affect every level and activity of the supply chain: procurement, manufacturing, ports, distribution centers, transportation, inventory, and so on. Furthermore, these activities and levels are not necessarily affected equally; therefore, it is imperative to reassess strategy in the context of the entire chain, not myopically with respect to only one component such as transportation costs.

For many years INSIGHT clients have had the ability to optimize their supply chains using a variety of criteria: cost, time, energy consumption, etc., or a weighted combination of these measures. "Many of us at INSIGHT started looking at energy consumption issues in the context of network design during the 1970s," adds Dr. Karrenbauer.

"Therefore, the recent spate of breathless announcements notwithstanding, the concept of optimizing a supply chain design with respect to "green" criteria such as energy consumption is not really a new idea at all, at least not for us. Our ability to directly handle such issues enables our clients to directly and quantitatively respond to the energy cost and availability challenges facing every supply chain manager today."

INSIGHT continues to recommend that companies institute a recurring supply chain planning effort and improved staff skills within their organization. Meeting corporate goals for a green supply chain means planning from the top down and implementing from the bottom up. Typically, corporations have continuous improvement efforts, which should include supply chain and logistics.

For the greatest "green" result, supply chain management and staff must influence the organization's long-term approach to raw material sourcing, engineering design, and transport alternatives. Green alternatives are best implemented with far-sighted initiatives, rather that as a reaction to market factors.

INSIGHT has experience across all forms of low-cost and green transportation options from pipeline, ship, barge, rail, truck, and air. They consider all - and mixed - modes of transport. Mixed modes introduce complexity, but are just the type of problem addressed by INSIGHT customers, whether container or piggyback trailer.

In addition, INSIGHT customers routinely do analyses for on-time delivery, assessing safety stock, in-transit stock, lead time, and economic order quantity (EOQ). Ecological transportation still must meet customer expectations for on-time delivery.

Community
Email This Article
Comment On This Article

Related Links
INSIGHT
Powering The World in the 21st Century at Energy-Daily.com



Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News


GE Energy Announces State Of The Art Technology Center In Saudi Arabia
Dammam, Saudi Arabia (SPX) Apr 30, 2008
GE Energy has announced the groundbreaking of its Power Technology Center, Middle East, a new state-of-the-art service facility in Dammam, developed in association with GE's joint venture partner Ali A. Tamimi Co. With an investment of SAR280 million ($75 million USD), the center will span 125,000 square feet and expand GE Energy's capabilities to serve its customers in the region.







  • Pelosi: President Should Help Lower Gas Prices By Suspending Filling Of SPR
  • GE Energy Announces State Of The Art Technology Center In Saudi Arabia
  • 'Biofuels frenzy' fuels global food crisis: experts
  • Green Supply Chains Need Strategy - Not Hype

  • Iran tells Russia of plan to solve world problems
  • Outside View: Work on Chernobyl continues
  • Austrian bank pulls out of financing Slovakia nuclear power plant
  • Outside View: Russia-Armenia uranium pact

  • Methane Sources Over The Last 30,000 Years
  • Changing Jet Streams May Alter Paths Of Storms And Hurricanes
  • Viruses Keep Us Breathing
  • Carnegie Mellon Researchers To Curb CO2 Emissions

  • Asia's rainforests vanishing as timber, food demand surge: experts
  • Fire sweeps through Siberian forests
  • World's Oldest Living Tree Discovered In Sweden
  • Forests' Long-Term Potential For Carbon Offsetting

  • Senegal's Wade says India to fully supply rice needs
  • UN chief to host food crisis summit in Swiss capital
  • Crop Management Strategies Key To Healthy Gulf And Planet
  • China tells companies to provide more diesel to agriculture

  • Carnegie Mellon Researchers Urge Development Of Low Carbon Electricity
  • Ocado Goes Greener With Prototype Electric Delivery Van
  • Lockheed Martin Autonomous Car Takes A Lap At The Toyota Grand Prix
  • Germany hopes for car emissions accord with France by June

  • Belgian airline says it will cut costs, emissions by slowing down
  • Airbus, Boeing sign accord to cut air traffic impact on environment
  • Oil spike, cost of planes led to Oasis collapse: founders
  • Airbus boss says aviation unfairly targeted over climate change

  • Nuclear Power In Space - Part 2
  • Outside View: Nuclear future in space
  • Nuclear Power In Space

  • The content herein, unless otherwise known to be public domain, are Copyright 1995-2007 - SpaceDaily.AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement