The Greening of the Supply Chain Jonathan D

The Greening of the Supply Chain Jonathan D. Gatrell VP – Industry Development Inovis

Ro. HS disposal Servers audit materials Virtualization treehugger brundtland commission sourcing Carbon Footprint Data Centers Sustainability governance greenhouse recyclable Carbon Credits environmental e. Invoicing emissions design Green IT reduction analysis biomimicry Transportation Compliance quality The Supply Chain is the Center WEEE packaging

Let’s start with the business.

… A Branded Global Citizen… SOURCE: AMR Research

… Green Opportunities … • 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

…Where Industries are Focusing… First Degree: Infrastructure Second Degree: Applications & Process Third Degree: Materials and Service SOURCE: Gartner

…Gartner: Green IT is REAL… 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.

Drivers for a Green Supply Chain Global Retailers Multi-Channel Commerce Private Label The Greening Consumer Globalization Increasing Sourcing Complexities Compliance and Corporate Conscious

Let’s start with the customer.

The Customer has the Power to buy what they want!

Transparency Customers 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 Gf. K Roper Green Gauge

Not just Consumerism – Economics too!

… A world of opportunity… • Demand Driven Supply Chains • 9 of 10 suppliers source from China • Multi-Modal Options Consolidate Air Freight Deconsolidate Customs Ocean Freight Customs

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

…Collaboration Is Increasing… “How much do you collaborate with trading partners for the following activities? ” BASE: 89 retailers and 80 manufacturers Source: 2006 Shared Strategy Study by Forrester Research, Consumer Goods Technology, and RIS News

…Collaboration Creates Value… “To what degree to you agree with the following statements? ” BASE: 89 retailers and 80 manufacturers Source: 2006 Shared Strategy Study by Forrester Research, Consumer Goods Technology, and RIS News

…But Collaboration is Hard. “Which of the following are challenging or extremely challenging to your company’s ability to collaborate with its trading partners? ” BASE: 89 retailers and 80 manufacturers Source: 2006 Shared Strategy Study by Forrester Research, Consumer Goods Technology, and RIS News

Green Retail

Mervyns Automation Manual vendor set-up limits responsiveness and paper laden.

A Manual vendor setup process Buyer submits new vendor request form Merchant sends paperwork to Buyer's finance Validate ID and add to translator or gateway Signed financial agreement from vendor New Vendor approved by DMM Vendor Welcome Letter Notify New Vendor Teams: Buyer Finance Run onboarding/ certification process Create ticket for EDI Vendor Setup in Financial System Vendor Setup Form Send Onbording process notification Set up Product Information Set up Vendor Portals Send Vendor Training Docs

Mervyns Solution • Reduces vendor set-up by 10 x. • 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 Cross-docking constrained Store sales suffer 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

…A 5 Point Action Plan … 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

YOU do today? What can

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The Greening of the Supply Chain Jonathan D. Gatrell VP – Industry Development Inovis