Wednesday, September 25, 2013

Latest News: HP Announces Supply Chain Emissions Reduction Goal

Mon, 09/23/2013 - 6:37pm  
by Hewlett Packard

"Company details industry-first goals for emissions reduction among suppliers
As part of an ongoing effort to improve its product manufacturing and supply chain operations, HP announced a greenhouse gas (GHG) emissions reduction goal for its first-tier manufacturing and product-transportation supply chain partners.
HP’s goal, a first for the information technology (IT) industry, is to drive a 20 percent decrease in its first-tier manufacturing and product transportation-related GHG emissions intensity(1) by 2020, compared to 2010.  
“HP has one of the largest supply chains in the industry. It’s imperative to manage it not just efficiently, but also ethically and in an environmentally sustainable way,” said Tony Prophet, senior vice president, Operations, Printing and Personal Systems, HP. “We understand the importance of reducing our carbon footprint, promoting sustainability throughout the IT supply chain and driving innovation that creates a better world and brighter future.”
Developed in consultation with the World Wildlife Fund’s (WWF) Climate Savers Program, the GHG emissions-reduction goal will be driven through a variety of HP-led activities, including:
  • Business incentives for suppliers to set and achieve tangible GHG emissions-reduction goals.
  • By 2020, direct prevention of 2 million metric tons of GHG emissions across HP’s multitier supply chain, cumulatively, through specific supplier environmental improvement projects, including:
    • Expanding HP’s Energy Efficiency Program (EEP) for manufacturing suppliers;
    • Instituting specific emissions reduction initiatives with suppliers with GHG intensive operations, e.g., LCD panel manufacturing; and
    • Creating product transportation-related efficiency initiatives.
  • Public reporting through the company’s Global Citizenship Report (GCR) on supply-chain GHG emissions to create awareness among HP’s supply base and demonstrate progress."

Such a plan by HP definitely looks great. Even better look the words "industry-first goals" - HP is the first company in IT sector to declare such ambitious eco goals. However, the question I want to rise in this post is if we are witnessing a start of the new global ecological improvement boom in the IT sector.

Of course, HP did not make this move just for the eco sake. Increase in customers' loyalty levels, possible government subsidies and the improvement of overall SCM processes (where the ecological point is just a side purpose with cost reduction and increase of efficiency as the real objective) definitely form the basis of this decision. What is really interesting for me now is if other big players of IT sector (as Dell, Asus and others) will follow the steps of HP.

If the benefits of such an ambitious ecological program (20% decrease in GCG - Greenhouse Gas - from the whole supply chain in ten years is really impressive) are significant, the competitors will definitely go for it too.

So, we should look closely at the IT industry news feed during the next couple months - it is very likely to see similar news for Dell or even Samsung. But if there will be nothing there, does it mean that the program of HP is truly a charity?! Or the benefits are simply not realized by HP's competitors? 

Overall, I wonder if this is adequate to make the analysis of such a kind, based only on the moves of large market players? Ad how fast are SCM-related initiatives getting spread throughout the industry? Hope to hear something on SCM-based competition problem in the class.


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