IBM Extends Green IT Offerings to Supply Chain Management

IBM Extends Green IT Offerings to Supply Chain Management

Supply chain image -- CC licensed by Flickr user Nick Saltmarsh

IBM drew upon its IT expertise and work with its own massive supplier network to create a new consulting service aimed at helping companies improve the efficiency and environmental impacts of their supply chains. 

The Sustainable Supplier Information Management Consulting service will help companies collect supply chain data such as energy use, labor practices and greenhouse gas emissions at a time of increasing attention on greener supply chains.

Walmart, for example, just began collecting environmental data from some of its top-tier suppliers this month as part of a larger initiative that will one day lead to sustainability scores for consumer products. The world's largest retailer intends to eventually expand the data collection to include its 100,000 worldwide suppliers.

Last week, U.K. retailer Tesco announced it would cut its supply chain carbon footprint by 30 percent by 2020, as part of an overarching goal of being a zero-carbon business by 2050, without the use of carbon offsets. 

IBM's own supply chain tops 30,000 in 60 countries. Analyzing the network for sustainability metrics can lead to increased efficiency, lower costs and waste, and better labor practices, the company said.

"A global supply chain with thousands of partners exposes a company to increased risk, waste, inefficiency, environmental impact and cost," Eric Riddleberger, IBM's business strategy consulting global leader, who heads up the company's corporate social responsibility consulting efforts, said in a statement Tuesday. "Being able to set sustainability standards and truly measure performance against them across such a large network is an enormous task, particularly in industries such as consumer products, retail and healthcare."

The new offering can also help companies develop the ability to track part numbers, process changes, and supplier audits, in addition to assistance in vetting new suppliers for performance standards, among other features. Supply chain optimization can yield efficiency and cost improvements of 8 percent or more, IBM said.

Its 2009 survey of C-level executives, however, show a minority companies have the capacity to perform this type of data collection or assessment in their internal operations or supply chain despite growing pressure for them to do so.

For example, nearly a third of respondents indicated they aren't collecting any sustainability data from their supply chains. Nearly one in five said they are collecting emissions data often enough to provide for effective management, even though about half are being required by their supply chain partners to adopt new carbon management standards.

Image CC licensed by Flickr user Nick Saltmarsh.

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