Ian A. Gentis
Reclipse Group
Monday, May 14th 2012

While the science of global warming is being debated, there is no doubt about a new metric coming to your supply chain: the carbon footprint. The measurement of greenhouse gas (GHG) emissions has become another plank in companies’ Corporate Responsibility platforms, and there is a good chance that you will be asked to provide your carbon footprint data in your next RFP response.

Here’s good news: Companies large and small that have decided to focus on reducing greenhouse gases as responsible policy, are finding out that they can save money.

The basic approach is to conduct a study of the carbon footprint of your supply chain as part of your product life cycle analysis (LCA).

Here’s some bad news: There is a lot of “junk science” and snake oil being offered up and some companies making honest efforts to understand their carbon footprint have had poor results.

Over the course of the next several blogs, we’ll explore the progress being made, offer resources and suggestions, and help you navigate through the hype to reach your goals.

So what is this all about?  A definition of carbon footprint

Our friends at Carbon Trust (www.carbontrust.com) in the United Kingdom (UK) helpfully offer this definition:

A carbon footprint measures the total greenhouse gas emissions caused directly and indirectly by a person, organization, event or product.

A carbon footprint is measured in tonnes of carbon dioxide equivalent (tCO2e). The carbon dioxide equivalent (CO2e) allows the different greenhouse gases to be compared on a like-for-like basis relative to one unit of CO2. CO2e is calculated by multiplying the emissions of each of the six greenhouse gases by its 100 year global warming potential (GWP).

A carbon footprint considers all six of the Kyoto Protocol greenhouse gases: Carbon dioxide (CO2), Methane (CH4), Nitrous oxide (N2O), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs) and Sulphur hexafluoride (SF6).

There are two types of carbon footprinting

The main types of carbon footprint for organizations are:

1. Organizational carbon footprint

Emissions from all the activities across the organization, including buildings’ energy use, industrial processes and company vehicles.

2. Product carbon footprint

Emissions over the whole life of a product or service, from the extraction of raw materials and manufacturing right through to its use and final reuse, recycling or disposal.

To get to a carbon footprint of the supply chain we will draw on both types of footprints.

What outputs can I expect from a carbon footprint? Some examples of carbon footprints

Let’s take a look at a recent carbon footprint study at Sprint Nextel (To review and download the full study, registration is required, but is free).

Sprint Nextel spends $13.5B annually on the 162 suppliers in its supply chain. Economic consultants Trucost (www.trucost.com) conducted a supply chain carbon footprint. A summary of their findings:

The carbon footprint of the Sprint Nextel supply chain is very concentrated in a few suppliers.

• The top 5 suppliers contribute to 58% of the total carbon footprint of the supply chain.
• The top 50 suppliers account for over 94% of the total carbon.
• Manufacturing is the most carbon intensive sector, accounting for 83% of the total carbon emissions and 67% of the expenditure.
• A total of 121 suppliers from Sprint Nextel’s supply chain are located within the top three sectors.

What can I do with this information?  Make plans to reduce your carbon footprint

Turning again to the Trucost Sprint Nextel study:

Measuring and understanding carbon footprints is the first step to towards managing and reducing them. Sprint Nextel can play a role in promoting emission reductions in the supply chains of its suppliers:

Develop low-carbon procurement strategies:

• An understanding of the main sources of emissions within supply chains could inform low-carbon procurement strategies.
• Baselines can be used to set carbon reduction targets for procurement.
• Include a requirement in tenders for suppliers to report carbon emissions data. Greater transparency can help identify opportunities to reduce emissions and demonstrate improvements in carbon performance.
• Carbon prices can be applied to emissions data to inform procurement decisions.
• Identify opportunities to monitor and share cost savings achieved through improvements in energy and carbon efficiency with procurement.

Inform engagement with suppliers:

• Identify the companies and sectors where engagement could be most effective to reduce supply chain emissions.
• Engage with suppliers that contribute most to carbon footprints, and are carbon-intensive compared with sector benchmarks, to encourage improvements in carbon efficiency.
• Ask suppliers to develop action plans to manage GHG emissions and monitor their performance. Encourage them to focus on improving the efficiency of fuel and electricity use so that they benefit from both carbon and cost savings.

For further reading, here is an interesting white paper from our friends at Carbon Trust which is no longer hosted on their website. (Understanding & Optimizing SC Carbon Footprints PDF)

I was at Apple in the 1986-92 era after coming to the US from the UK with Xerox-Diablo Systems in 1981. My time at Apple was during the John Sculley period. As with many current and Ex Apple folks Steve Jobs and teams created a really insanely great Company with a legacy that touched my life in many positive ways. Without Steve Jobs, and his vision/drive to start/enable continuation of “The Journey”, millions of people Globally would not have traveled their own personal and professional journeys in this recent golden era that Steve created. He will be missed and the Journey, as the Reward, will continue.

Nigel Johnson
- CEO Reclipse Group

All is growing well in California following the substantial rains during the winter and spring everything in the garden is growing and blooming.

The same applies in our Reclipse World. I like to call it “moving into the light”. It is exciting times with our Reclipse team and key partnerships building with experienced and innovative top talent and real pragmatic Vision to Action programs. We are developing both internally to fertilize our growth and externally as we prepare and present “value proposition” offerings for clients and potential new clients.

Exciting – Next Generation

It is a fact that most things we currently work on are confidential and we pride ourselves in working ahead of current curves to help our clients be the “Best Next”! Personally I really dislike the terms like “Best in Class” and “Benchmarking” as that really means trying to catch up and become normal or true examples of JIT vs. JIC vs. JTL (Just Too Late)

An Example: Apple and the iPod, iTunes, iPhone current realities really were “game changing” thought leadership and innovation to action and world changing success! Now the iPad has instantly become a “fashion statement” that sells like hot cakes and has created a whole new product, market and community category.

At Reclipse we prefer to work on innovating and creating “next generation” happenings for and with our clients.

Exciting – An all Electric Vehicle

One project I can mention is in our Sustainability, Clean and Green, category. This is a Company that has built a “Zero Emissions” electric vehicle that charges rapidly, has a long range between charges and can and does drive on the freeway as it goes fast enough to be able to. We are developing the Vision (s), Mission, Values, Strategies and Tactics for this entity and a business model that can bring most value for all. The working concept vehicle is operating and very exciting and very real!

We have also developed some compelling Business Chain Management offerings as although we are proven experts in all aspects of cradle to cradle (we borrowed that term from someone) Global demand/supply chain management, integrated logistics, operations and asset management practices we also know that its time for a next level of thought leadership thinking and actions to suit the world we are in and the one ahead of us. To many experts SC terminology for example has become a misused catch all and nothing phrase that has created and not integrated Company stovepipes/silos versus produced real “Business” Sales, Cost, and Profit and Innovation success results. Our Business Chain (Change) thinking, methods and actions help build a wave of change towards true “next generation” customer, people and talent centric collaborations and business innovations results successes.

Exciting – Outsourcers, the 3PL’s (4PL’s)

One of these next generation offerings is targeted at the current 3rd Party Logistics Outsource providers who have to keep up with the ever increasing demands and expectations of the Brand designers/ODM’s who outsource to others to get things produced and delivered for them to an ever increasing and demanding Customer and Cost reduction expectation. How do the 3PL’s survive and compete to thrive in this very demanding arena. Our offering, value enhancing propositions and know how to methods and “how to’s” are targeted to pragmatically help companies in this arena.

Exciting Times

So “lots going on” and it truly is an exciting time and opportunity for us all. Let the Sun shine and the gardens grow!

- Nigel

The concept of sustainability or sustainable development has become a universally accepted foundation for countries around the world when they contend with environmental problems.
It was put forward, with the leadership of then Norwegian Prime Minister, Dr. Gro Harlem Brundtland, by the United Nations World Commission on Environment and Development and was presented for the first time through the Commission’s 1987 report, Our Common Future.
Its strict definition is . . . “a development which responds to the needs of the present without compromising the capacity of future generations to respond to their needs.”
In practical terms, though, it means trying to strike a balance between economic and social progress without endangering the ecological balance of the planet, this balance being considered as a heritage for our children.
Methods of production and consumption must be kind to the human and natural environment and enable everyone on the planet to fulfill their basic need for: food, home, clothing, education, work, and living in a healthy environment.
Sustainable development calls for a change in the habits of every one of us (citizens, companies, local governments, national governments, international bodies) in light of the dangers facing humanity and our planet (social inequalities, industrial and health risks, climate changes, reduced biodiversity, emissions of greenhouse gases, etc.).
It begins with the analysis of the life cycle of each product and/or practice and takes into account all of the impacts (environmental, economic and social) that a product or service will have throughout its life cycle.
The cycle for all of these includes extraction of raw materials, manufacturing, packaging and distribution, consumption, and end of life. Life cycle thinking is an essential concept for implementing sustainable development. When applied to product design, production processes and decision-making, life cycle thinking leads engineers and designers toward a “cradle-to-cradle” approach rather than “cradle to grave”.
When successful, this approach considers and plans for the optimal use of resources (water, wood, fossils fuels, etc.) and energy consumption (in manufacturing, packaging, distribution including transportation to shops), but also landfill sites or other facilities for recycling and, finally, greenhouse gas creation in transportation or other processes.
This is simply the “tip of the sustainability iceberg” and clearly an enormous task, but it is indeed where true sustainable product success lies. It is the way we must proceed if we plan to preserve the environment.

Paul Tasner
Vice President – Supply Chain / Sustainabilty
Reclipse Group, Inc.

Susan Rosin, our President, came across an interesting article in Supply Chain Digest (http://tinyurl.com/Own-assets-article), which poses the question: “Who will own the Supply Chain?”

The article never totally answers the question, but puts forward a few theories, which conclude that some “poor SOB will”, in the end, own the assets and have to “sweat them out” if they are to succeed.

The “raison d’etre” of outsourcing was/is cost reduction. And while manufacturers claimed they were focusing on their core competencies and outsourcing what they were not able to do well, the fact was that they choose a relatively easy way out to unload assets, reduce costs, and increase profits. Why is it that American companies cannot figure out a way to be cost competitive and manufacture products locally?

Historically, outsourcing, in the logistics area, became very strong in Europe due to a lack of space to build multiple distribution centers and because of complex government trade compliance laws within what is now the EU, in particular. To a certain extent in Europe, outsourcing was not done as a matter of choice, but as a matter of necessity. In the US, logistics outsourcing became more popular as distribution models began to change and the emergence of the Internet forced the brick and mortar players to eliminate assets to be “more competitive.”

The outsourcing of manufacturing and “localization” capabilities was done because manufacturers thought they could become much more competitive if they “off-shored” their manufacturing. When the labor component was a larger portion of the overall cost, this was certainly true. When the contract manufacturers in Asia, whether electronic contractor manufacturers or the textile manufacturers, pay their workers 10% or less than American or European workers make, clearly outsourcing made sense.

But outsourcing led to two very significant developments in the supply chain – globalization and integration. The supply chain quickly became a series of supplier and customer networks integrated together through technology – more or less –  developed. And herein lies the answer to the question: who will own the assets? While these assets may appear only on one company’s balance sheet, without the support of and from this companies’ suppliers and customers, the question becomes irrelevant because this manufacturer or logistics provider will go out of business. The global integration of supply chains today has made it more difficult to distinguish who owns what and for whom. This has become even more apparent since the “Great Recession” of 2008-9 when governments interceded on behalf of major industry players.

So the guy holding the bag and sweating out the assets will never be successful with that approach. The future of the Business Chain is in the more tightly integrated supply/demand networks with perhaps, intermediaries (such as logistics providers, 4PLs) orchestrating the flow of orders to manufacturers who have capacity; the transport of goods either into distribution centers who have capacity or by-passing them to deliver to the final customer; and managing the returns process to manufacturers or other logistics providers who can fix and inventory or return product back to the customer. The technology exists to implement this – the real question today is who is willing to combine and collaborate to make it a reality.

Deby Veneziale
Reclipse Group
Managing Director EMEA

“Carbon footprint” is a term used to describe the amount of greenhouse gas (GHG) emissions caused by a particular activity or entity, and thus a way for organizations and individuals to assess their contribution to climate change. Understanding these emissions, and where they come from, is necessary in order to reduce them. In the past, companies wanting to measure their carbon footprints have focused on their own emissions, but now they are increasingly concerned with emissions across their entire supply chain.

Supply chain GHG emissions, which include those associated with processes not controlled by the company itself, can be measured at either the company level or the level of an individual product.

While PAS 2050 provides a standard method for assessing a product’s carbon footprint, this guide, “Guide to PAS 2050″, will help businesses to implement the standard by offering specific and practical guidance. It is not a replacement for PAS 2050 and should always be used alongside PAS 2050. There are benefits to both company- and product-level supply chain emissions assessment; however, PAS 2050 and this guide focus on product-level emissions only.

This guide aims to:

- Enable companies of all sizes, and from all industries, to assess the life cycle carbon footprint of their products and to identify emission reduction opportunities

- Share best practices, tools and frameworks for calculating product-level GHG emissions and prioritizing opportunities to reduce emissions

PAS 2050 and this guide focus exclusively on GHG emissions created during a product’s life cycle.

Visit the Carbon Trust website (http://www.carbontrust.co.uk/Pages/Default.aspx) to download supporting documents such as the PAS 2050 Specifications, the Guide to PAS 2050, and the Code of Good Practice.

Paul Tasner
Reclipse Group, Inc.

http://www.eco-opscenter.com/report-download.php

A 90-page report and survey findings detailing the forces and
factors driving supply chain executives toward greater levels of
environmental responsibility, visibility, collaboration and
accountability.

Paul Tasner
Reclipse Group, Inc.

Opportunities to Reduce GHG Emissions Through Materials and Land
Management

http://www.epa.gov/oswer/docs/ghg_land_and_materials_management.pdf

First, in order to increase understanding of the link between
materials and land management and GHG emissions, this document
presents an estimate of the portion of U.S. GHG emissions associated
with materials and land management practices. Second, it presents a
set of materials and land management scenarios—referred to as total
technical potential scenarios—as a first step to identifying areas of
opportunity for EPA and its partners to reduce GHG emissions through
materials and land management.

Products, Packaging, and US GHG emissions

http://www.productpolicy.org/content/climate-change-epr

This paper builds on a new report from the U.S. Environmental
Protection Agency, “Opportunities to Reduce GHG Emissions through
Materials and Land Management Practices,” which offers new insight
into the impact of products and packaging on climate change. Based on
the report, non-food products are associated with 37 percent of U.S.
greenhouse gas emissions. This paper extends the EPA analysis to
include the impacts from producing products abroad that are consumed
in the U.S. This brings the share of products and packaging to 44
percent of total U.S. greenhouse gas emissions.

Paul Tasner
Reclipse Group, Inc.

The traditional view of supply chain management was optimizing performance within silos; however, that was done at the expense of the greater supply chain. In the past, supply chain strategy was very much focused on cost reduction and capital productivity. The supply chain of old reacted to rather than aligned with and supported the overall business strategy. Today, the key is for the entire enterprise to focus on optimizing supply chain management. That means achieving full alignment with the strategic intent of the business in order to create value and enable growth.

We have an opportunity to build strategies and create value working side-by-side with colleagues from related disciplines. As the connector between brand strategies and execution at the customer level, supply chain alignment seems a natural objective. In essence, we have an opportunity to ensure the goal of every company with a retail product – that the right product is available at the right place, at the right time, in the right quality and at the lowest possible cost.

We in supply chain management need to be agents of change – helping our colleagues across the business to shift their view of the supply chain from that of a cost center to that of a growth opportunity. We need to repurpose the supply chain and make it a source of competitive advantage. Aligning the supply chain with the business strategy allows the organization to capture cross-enterprise opportunities that not only generate cost and capital efficiencies, but also helps to drive top line opportunities.

To begin, we must examine the financial and operational anatomy of each link in the current chain, identify opportunities for improvement, and recommend action plans, as appropriate.

Once the aforementioned work is completed, we will be prepared to work with our colleagues in other functional areas of the business in order to pursue the following challenges:
• In aligning the supply chain strategy to the business strategy, the supply chain focus needs to start with the customer and then extend back to the company. Without this perspective, supply chain management will tend to focus exclusively on internal costs and return on assets.
• A future horizon must be defined and looked to in establishing a desired future-state vision. The ever-changing business environment requires a view to the future in driving new capabilities.
• Both within the function and throughout the business, the view of the supply chain needs to shift from that of a cost center to that of a growth opportunity. This creates the focus on developing supply chain capabilities that will enable growth in the marketplace.
• Both internal and external views must be taken into account in order to develop an honest assessment of the company’s capabilities and performance and to help identify gaps. While this critical view might bring some pain to those areas with the largest gaps, this inside/outside approach enables the proper assessment of where fundamental operational improvements and future capabilities are needed.
• The company’s long-term business strategy needs to be well-defined, shared and understood, especially around products, customers, and distribution channels.
• Strategy development work requires broad internal support and should be organized accordingly. All supply chain functions, as well as finance, marketing, and sales, are key participants to this process.

Paul Tasner
Reclipse Group, Inc.

OK the Holidays and 2009 and decade reflections are done.
The Reclipse compass and talent is pointed in the help business while helping people make the complex simple directions and so far so good.
Reclipse will build on the foundations that we have secured in 2009 and help evangelize and support companies in building and transforming their businesses in the most profound and value oriented manner possible.
The social networking and community marketing focus is a blur of connection and real efficient navigation is needed so the “Fad Focus” moves to a more focused real value/ROI benefit instead of creating blurry “Blink” dots that are short lived and no-one can connect. I am not a twitter fan at this stage of its evolution as you might gather from my comments.
All being well it will be a year to continue the healing from the Economic Flu of the past few years. It will be a year and time of entities figuring out how to truly collaborate/partner to succeed and our umbrella lite methodology of Business Chain Management and Improvement will become a high value add for our clients and partners. We practice the Customer Driven – BC Sell, Recruit, Do methods and this year we will unveil more on these capabilities. Onward – Nigel