Decarb’ the supply chain

Seeing the pictures of lorries blocking a main route into London as their drivers get themselves bussed in to protest against fuel prices made me realise that these poor people are a link in an unfortunate chain of events which is probably beyond their, or the government’s, ability to change.

Sure the government can dish out tax breaks to protect the industry from fuel price increases, but it will not change the underlying problem which is that, one way or another, we’re going to get clobbered for moving goods around in fuel consuming and air polluting vehicles. And the cost has to be borne by the people who want said goods. We are in for a structural readjustment, the like of which we’ve seen frequently in the past as industries change shape or even disappear. It’s tough on the transport companies who can’t react swiftly enough to the ever changing prices of fuel. They book jobs or secure contracts at one price and, by the time the work is done, their gross margins have been seriously eroded.

All this brings to mind some work that IBM Global Business Services and IBM Research has been doing on optimising the supply chain in order to balance cost, service, quality, and carbon. It has announced a ’Carbon Tradeoff Modeler’ to help organisations assess their supply chains for optimal results. It, through the IBM Institute for Business Value, has also published a short (16-page) paper on the subject called Mastering Carbon Management which you may find interesting.

Supply chain optimisation

One of the hardest aspects of this whole carbon/green/sustainability business is to think about it in a clear and structured way and to find immediate sources of help. Fortunately, companies like IBM are beginning to step up to the mark and assist. Of course, it’s not altruism, it’s good business sense. IBM wants to be seen as a place to go for solid environmental consultancy. But at least it is getting to grips with the issues right now, enabling companies to act intelligently instead of waiting for regulation to force them into rushed decisions.

You may also be interested in IBM’s simple framework for looking at your own organisation’s environmental impact using its House of Carbon. This includes supply chain as part of the bigger picture.

Whatever you think of mad fuel prices and carbon as the enemy of mankind, the fact is we are on this particular treadmill and it’s just not going to go away. The argument is “you wouldn’t want to be seen to have done nothing, by later generations”. And, of course, anything that leaves the world a better place for our descendants is good. And, at least high fuel prices and forthcoming carbon taxes are likely to accelerate the development of alternative power sources and carbon sequestration equipment.

As for the poor transport firms, I guess they will have to operate more like airlines and standardise on fuel surcharges until they can switch to more sustainable vehicles. Even so, with their customers looking at ways of slashing their supply chain carbon, it’s likely that demand for haulage is likely to reduce in the developed countries.

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