carbon footprint along with a number of other environmental attributes like the amount of water used to create it
and the volume of solid waste generated in its production.
The retailer plans to fund a university consortium to develop the label along with related metrics—although when it
comes to measuring the carbon generated during manufacturing and distribution, it plans to piggyback on work
already being done in the United Kingdom by the Carbon
Trust. As a first step, this fall Wal-Mart surveyed its top
100,000 suppliers to find out whether they had instituted
reduction targets for greenhouse gases. If your company is
a supplier to Wal-Mart, you’ll likely be mandated at some
point to show you’re doing something to combat global
warming.
Although the details regarding compliance—whether
with federal laws, federal regulations, or an industry mandate—are still being worked out, it’s virtually certain that
transportation will be targeted for greenhouse gas reductions. Some clues as to what managers might eventually be
required to do can be gleaned from the experience of yogurt
maker Stonyfield Farm of Londonderry, N.H.
An organic foods producer with a longstanding commitment to sustainable practices, Stonyfield Farm hasn’t been
waiting around for government or industry mandates. It
has already launched a companywide initiative to reduce its
carbon footprint. In the area of finished-goods transportation, for example, Stonyfield Farm has set an ambitious goal
of cutting greenhouse gas emissions to 40 percent of its
2006 baseline by the year 2014. In the first year of its program, the company achieved a significant reduction in CO2
emissions just by managing its private fleet and for-hire
carriers more efficiently. Through better planning and
equipment utilization, it was able to reduce both the number of trips made and miles traveled, with a corresponding
reduction in emissions.
More recently, the company has been looking at shifting
freight from road to rail and at incorporating more-effi-cient equipment into its private fleet. But even that may not
be enough. Although these initiatives are producing measurable savings, Stonyfield Farm believes it will have to do
still more if it expects to reach its long-term goals. The
company is now preparing to take a hard look at its entire
supply chain network, modeling the location of plants and
distribution centers with the aim of minimizing shipping
distances.
Stonyfield Farm’s experience suggests that other companies too will have to step back and evaluate their entire supply chain operation in order to achieve meaningful reductions in CO2 emissions. Actions like buying hybrid-diesel
engine trucks will help, but most businesses won’t reach
exacting targets without a holistic network approach.
Given the current concern about global warming, distribution managers need to start thinking about how they can
reduce greenhouse gas emissions associated with inbound
and outbound transportation. In the past, companies optimized their distribution operations around cost and service. Now, however, the optimization equation will require a
third variable: carbon dioxide emissions.
Distribution managers can expect “carbon mapping”
exercises to become a routine part of their job—just like
freight bill auditing or issuing requests for proposals. With
more and more folks concerned about what’s blowing in
the wind, both here and around the world, next year will be
the year in which managers are asked to do their part to cut
back on CO2.
