Green Supply Chain Leadership at IBM Analyst Insight 2007

Earlier this week I participated in IBM’s Analyst Insight ’07 session in Lisbon, Portugal. The two-day event is designed to engage the analyst community in insights, trends, and strategy across the many facets of IBM’s European businesses. Dominique Cerutti, General Manager of Southwest Europe, set the tone of “Planning for Tomorrow, Delivering Today” with remarks on the cataclysmic significance of globalization in terms of redefining our mobility, eco-demographics, and technology needs. Given these monumental shifts and ensuing complexity, innovation is seen as the crucial means to effectively tap global resources, develop new business models, and leverage the correct technology in order to survive in a flat world.

While most of my subsequent briefings and interviews were oriented around tactical needs to “Demystify [This Division] of IBM” for the analysts, one session stands out as being clearly aligned with Mr. Cerutti’s compelling vision of change — a one on one discussion I had with Andrew Jackson, Supply Chain Management Leader in IBM’s Global Business Services, on the topic of the green supply chain footprint. In the last year, Mr. Jackson has been tasked with rolling out the leading European thinking on climate change across IBM’s global division in order to best counsel clients on their strategic approaches to understanding and dealing with their carbon footprint. What impressed me most about this discussion was the analytical, systems thinking approach which is required to correctly “peel back the onion” and diagnose where a company’s levers are for reducing their CO2 impact. Just as supply chain management requires Pareto analyses, segmentation, and distinct operating model designs to best fulfill demand patterns, so too must CEOs and their executive teams scientifically diagnose areas, identify high-impact opportunities, and design countermeasures to address interdependent and interweaving carbon impact opportunities across their products, people, facilities, and supply chains.

So how do companies begin to improve the “greenness” of their supply chains? One approach would be start with the customer. Will customers pay more or select green products over others? If so, can a company justify green investments which will effectively differentiate them from competitors and lead to growth? Analytical tools and standard means of measuring carbon footprints will clearly rise in importance to help companies along this journey. The good news for supply chain managers is that many of the same opportunities to green their supply chains — like pooling shipment loads, selecting efficient suppliers, and reducing facilities costs — are exactly the same business opportunities to reduce waste and improve operational efficiency.

Roy Wildeman, Senior Analyst, Forrester Research