Welcome to 2010 .

In subsequent postings I shared the first four our supply chain predictions for the coming year. You can view the previous postings in clicking the following embedded links:

Part One

Part Two

Part Three

In this posting, we will conclude this series with the fifth prediction along with a final summary and some instructions on how to receive a free copy of the total prediction series, if you desire one.

Prediction Five: There will be a new resurgence of supply chain carbon tracking along with more momentum in green and sustainable supply chain initiatives.

Even though there was general disappointment in the outcome of the recent United Nations Copenhagen climate conference, the one clear outcome was that carbon tracking and sustainability needs will remain on both global country and corporate agendas for many years to come. Although companies have not yet experienced significant pull for low-carbon or green products, it is just a matter of time before consumers actively seek-out such products and services. The cost and incremental operational efficiency benefits of sustainable supply chain initiatives have already been proven in initial activities.  Major retailers, manufacturing and services companies such as Coca-Cola, Nike, Procter & Gamble, Tesco, Wal-Mart to mention just a few, remain very active in driving supply-chain wide standards and guidelines to insure sustainability footprint in products.  Getting ahead of pending carbon regulations and a more socially responsible customer will make more business sense in the coming year.

The needs for continued cost control and sustainability have been complementary up to this point, and should remain so.  Efforts in reduction of fuel and energy consumption, packaging, and recycling of product material each add benefit.  Broader initiatives may have been hampered up to this point, because of general budget and manpower constraints.  As business begins to improve in the latter half of 2010, look to more supply chain initiatives addressing green and sustainability tracking and mitigation.  Transportation, third-party logistics and other service providers will not be immune to this momentum, and they will in-turn be forced to step-up their efforts.

Carbon tracking technology has become more widely available and can be acquired at a very reasonable cost.   Supply chain network design vendors have added carbon tracking and analysis to their existing offerings, and major ERP vendors such as SAP are actively incorporating sustainability and carbon tracking functionality within the ERP suite.  Reverse supply chain planning and control will also begin a new genesis in the coming year.

Finally, as more companies and organizations initiate broader programs, the impacts to logistics and transportation will become ever more evident.  Fewer shipments of optimized loads will negatively impact the volumes of carriers and logistics providers.  Being the lowest carbon consumption and cost transport provider may prove to be highly beneficial in 2010.  Maybe Warren Buffet was indeed a sage in his acquisition of a major U.S. railroad.

A Final Note

That concludes our predictions for 2010, a year that promises to be just as challenging as 2009, but with hopefully a bit more optimistic toward future growth and investment.  The best analogy that comes to mind for reinvigorating your management juices in 2010 is to picture yourself as a military fighter pilot. Take firm control of the joystick, maintain a 360 degree view of the cockpit, and be prepared for another wild ride of non-stop missions.  Good luck and continue to check-in with Supply Chain Matters for your mission intelligence.

As noted in this series, a detailed copy of all five of these 2010 predictions is available in a free research report in early January.  If you desire a copy, please send your request to the following email address:

bferrari at blog1 dot com.   (bferrari@blog1.com )

In your request please include the following information:

Your name

Organization and title

Email address

Best wishes for a very productive and rewarding 2010.

 Bob Ferrari

I came across a great supply chain related article for this holiday season.  Mike Cassidy on SiliconValley.com notes UPS’s two-wheeled delivery secret.

As Cassidy notes in his opening sentence: UPS, the mammoth delivery company, tackles it with hundreds of cargo jets, thousands of big rigs, tens of thousands of those familiar delivery vans- and Justin Hurst’s bike.” Hurst is one of about two dozen UPS workers who is peddling a $700 bike to deliver holiday packages to Silicon Valley area homes. You can actually view the video of Justin’s activities embedded in the article.

It seems that UPS has discovered that it is far cheaper to provide a bike than to have to rent additional trucks to augment peak holiday delivery needs in Northern California.  This effort is of course a wonderful statement toward green and sustainability commitment, since a certain amount of carbon emitting delivery vans have been replaced by good old fashioned pedal power.

Two thoughts come to mind.  First, what kind of shape are Justin and his fellow bikers in to be able to make all those round trips.  Second, does this mean that UPS won’t add a fuel surcharge to the shipping rate?

Attention all transportation managers- UPS has found the new secret of green.  Now if they could figure out how to utilize a high speed electric bike, the world would be a better place.

 Bob Ferrari

Earlier this week, Procter and Gamble released its “Designed to Matter” annual sustainability report.  The report, which can be downloaded here, provides an excellent reference for how sustainability goals can be established and tracked across the extended supply chain. It also notes the value of internal employees in contributing innovative or novel ideas in addressing sustainability goals.

P&G has produced a sustainability report since 2002, and not only tracks its internal goals and initiatives in each area of sustainability, but also reports on the green impact of its individual products it sells to consumers.

Internal supply chain and other initiatives have led to a cumulative 53 percent reduction in waste disposal, along with a 52 percent reduction in water and energy usage.  That is fairly impressive.  If you read through the detail of the report, you can note that P&G has shifted its European transportation strategies to leverage more use of rail, setting a goal to move from 10 to 30 percent rail movements by 2015.  In North America, intermodal transport has increased by 30%, saving 11 million liters of diesel fuel.

Contrastingly, in consumer product offerings, P&G acknowledges that while green products have proven to be attractive, the majority of consumers are unwilling to sacrifice value or quality in order to have a more eco-friendly product.  My translation is that in the current global recessionary environment, price apparently trumps green. 

Our community should shout out a loud applause to P&G in its obvious long-term commitment toward sustainability in supply chain.

Bob Ferrari