Carbon footprint and Optimisation

March 19th, 2007 at 03:11am Sean Delaney - Iasta UK

32% of organisations worldwide have sustainable travel policy and 20% said their transport policy gave priority to vendors with lower carbon emissions.

These figures seem quite high but I can’t help but feel that with companies like Tesco and Wal-Mart giving a greater priority to this issue these percentages are likely to change dramatically over the next few years.

Carlson Wagonlit Travel (CWT) seems to be tackling this head on and have developed a calculator that incorporates carbon emissions data when calculating the cost of your travel.

Tesco and Wal-Mart are currently concentrating on their direct operations like transport, packaging and store operations. However I suspect that they are likely to impose more prescribed terms of environmental trading with suppliers. In addition as Carbon trading matures this should make calculating the market price on the cost of emitting CO2 far easier.

I can only see this issue growing but I also believe eSourcing is well placed to support the impact on procurement. The use of optimisation software will be critical when evaluating and comparing the different sourcing scenarios.

Take for example the decision to award an office supply contract. Factors like location of distribution centre to end users, average order size (larger the better), the type of fuel used by the delivery vehicle and percentage of product which is recycled. To further complicate the decision matrix, these parameters may differ by region and country.

Imagine the different scenarios and you will soon realise optimisation will be the only plausible method of analysing how to award the contract.

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Entry Filed under: General, Global Supply Issues/Risk, Optimization, Technology / SaaS