Tuesday, February 26, 2013

Innovation in SCM with Greenhouse Gas Emissions

Building off of the McKinsey article on reducing energy use across supply chains, Wal-Mart in particular comes to mind, so I decided to research what they were doing in this respect.  This report that Wal-Mart published discusses some of the challenges that have come from having a supply chain which is so massive, but has a goal of 20% reduction in greenhouse gas emissions.


They have been successful at reducing emissions for a couple of reasons; first, they direct source a lot of their products from suppliers rather than middlemen, so they have greater power over how materials are shipped and packaged.  Second, they are such a massive company that they have considerable power over their producers, as none of their suppliers want to lose Wal-Mart as a client.  Third, because of their direct ties with their suppliers, they have been able to use a standardized energy reporting and analysis tool across the board for collection and analysis of emissions.  Finally, they have focused on facility energy management, which is a significant part of their emissions due to store and warehouse sizes, and this has produced considerable results.  All of these aspects have contributed to their success in reducing the energy footprint of their supply chain.  It would be interesting to see where they currently in stand in terms of the largest opportunity areas for additional improvement in the energy arena, since it seems that they have considerable accomplishments to date.

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