Published: July 31 2009, 07:25 AM | no comments
by Terrence Clark

Organizations have always had an interest in knowing about their supply chain. The main purpose for understanding one’s supply chain was to drive cost out of the business. This is not a novel idea. However, recently the focus on gaining greater insight into suppliers has risen. Organizations now realize they need to know more about what goes on in their business beyond their own four walls.

There is now a growing movement to understand the total environmental impact of products and services. In order for an organization to do that, they need to understand the product’s impact up and down the supply chain. Take as an example an automobile manufacturer; if we were only to look at the environmental impact of the manufacturing process to put together the car, then we would be missing a large aspect of the overall environmental impact of a car. What about the environmental impact in obtaining all the raw materials necessary to build the car? What about the manufacturing done by all of the suppliers that create the parts that go into the car? What about the environmental impact of shipping those parts from the suppliers to the car manufacturer? What about all of the emissions that are produced by the car once it is in use by the consumer? What about the impact in the disposal of the car when it is no longer usable?

There are new standards forming like the UK’s PAS 2050 or an upcoming global one from WRI that aim to understand the carbon impact of a product through its entire lifecycle. Additionally, the CDP, recognized as the leading carbon reporting program globally also has added a supply chain component to the information it requests.

Another example of this movement is Wal-mart’s recently announced plans to begin a new assessment process for its suppliers as part of a new product labeling effort. It is described in this NY Times article for those that missed it.

Additionally, an organization’s supply chain often contains hidden risks that could have a negative impact on the organization. As quoted in a Sustainable Sourcing article last month Simone Luibi, practice head for green procurement at BrainNet stated. "Many companies are not adequately informed about the time bombs that are ticking away in their added value chains. After all, it’s not just about high standards within their own four walls: overlooked environmental legislation, poisonous substances in product components or suppliers employing child labor can damage the company’s image long term and bring with it serious financial and legal consequences.

One thing that we’ve learned from the financial crisis is that there is a need for greater transparency. Whether or not this has played a role in this shift, there is absolutely an increased focus for organizations to know what is going on in their supply chain. While this may cause additional effort for organizations to build a process to manage this information, the good news is that greater transparency leads to actionable information. This actionable information can help the organization’s identify areas to reduce cost, reduce risk, and also find new opportunities to improve and transform its operations.

Terrence G. Clark - Senior Vice President and GM 
CA ecoSoftware
mailto:terrence.clark@ca.com

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Published: July 21 2009, 07:41 PM | no comments
by Viki Paige

A recent InfoWorld article by Ted Samson discusses the importance of tracking green projects throughout your organization, and gives you some tips on how you can use CA’s new ecoSoftware solution to help.

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Published: July 08 2009, 01:14 AM | 1 Comment(s)
by Terrence Clark

I spend much of my time talking to large organizations around the world about what they are doing to help reduce energy consumption, cut costs, and manage carbon.  You often hear very different things.  Some people talk about their organization’s overall strategy and goals from a top down approach, others will hone in on the key initiatives/ projects that are driving the organization, others just want to focus on how to more efficiently and effectively get their arms around their critical data elements to be able to track their organization’s energy consumption, costs and/or carbon footprint, still others are concerned about limited electricity capacity to meet the growing demand from their business and there are others that are looking at the potential risks that face the organization be they operational, reputational, or regulatory.  The discussions are very different covering one or more of those areas.

However, there is one thing that is a constant in just about every meeting I have and that is the challenge organizations have in dealing with the siloed thinking between its facilities and IT organizations.  Very simply put, in most organizations IT doesn’t pay the bill.  In fact, they often have no visibility into what their electricity costs even are.  They are lucky if they know how much electricity they are consuming.  IT’s unstated philosophy is often…if I have space, and I have an outlet, plug it in. 

To illustrate this point I will reference one discussion I had that was quite amazing.  The organization has a very prominent corporate sustainability program.  It is being driven down directly from the board and CEO.  We were speaking with one of the mid-level managers within the IT organization discussing some of the newer technologies on the market to help reduce energy consumption and cost in the data center.  He laughed, and explained that while he understood the value that some of the new technology could bring to the organization as a whole; his management wouldn’t support it because the ROI from such technologies wouldn’t apply to his organization.  Simply stated, despite the CEO led sustainability program, as he wasn’t paying the energy bill, energy cost savings weren’t something he cared about. 

Unfortunately this conversation is happening over and over.  This siloed thinking slows down the progress that an organization can make in reducing energy consumption, cutting energy costs, and decreasing its carbon footprint.  The funny thing is many organizations view their situation as unique, and I assure them they are no different than most.  There are a few organizations that recognize these silos and are working to address them with cross-functional teams, but even there when faced with conflicting priorities challenges are unavoidable.

At this point, it isn’t possible for things to remain the same.  They have to change.  There are a couple of possibilities as to how this can be resolved.  One is that IT and facilities become part of the same organization, much like what happened when the IT and communications organizations merged to form ICT.  The other possibility is that IT begins to own its energy bill.  This could occur either via cross-charging from facilities or having IT directly pay the utility company for its consumption.

One thing is for sure, organizations that overcome these hurdles and enable facilities and IT to work more effectively together will make more progress on their energy reduction efforts than those that don’t.

Terrence G. Clark - Senior Vice President and GM 
CA ecoSoftware
mailto:terrence.clark@ca.com

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