Special report│Carbon management

Towards a carbon footprint sustainable supply chain

As the planet is heats up, so do mandates for manufacturers to reduce their carbon emissions. While manufacturers have been doing their bit in their manufacturing units, their carbon efficient initiatives has ceased to become a mere CSR activity, a movement, or a political leaning. It has transformed into business and economic viability. Today, manufacturers are pushed out of their production silos to consider the entire supply chain and look for new opportunities to erase the carbon footprints effectively – from sourcing to production, to distribution and product afterlife. The need today is for manufacturers to integrate an effective carbon reduction strategy into supply chain to reduce footprint, enhance their corporate image and reap the cost advantage.

Attempting to please the ecological police with environmental initiatives and stakeholders with improved savings upon energy consumption, manufacturing companies have come a long way in their energy efficient initiatives. They have come out of their manufacturing facilities’ silos and have started to take an integrated view of their supply chains to erase the most villainous presence of the ‘carbon footprints’. Although manufacturing companies traditionally limited their supply chain optimisation vision to minimising costs to partners in the supply chain and maximising service to the customers, the current scenario is quickly moving to a concept of ‘producer responsibility’ for the carbon footprint of a product manufactured. In other words, the changing nature of global trade is driving the manufacturing firms to examine frequently their supply chain structure and to consider the impact of this structure on the amount of carbon dioxide released, simultaneously developing tools to measure and capture the amount of carbon emissions.

However, till date mostly tactical approaches (using technologies to meet the needs of a particular situation) are being implemented that do not seem to convincingly decarbonise a manufacturing firm’s supply chain as a whole. While tactical approaches are arresting the carbon emanation in different parts of the supply chain, they are failing to boost the supply chain’s overall efficiency. The current scenario requires the manufacturing firms to implement key strategies that can be holistically applied to the end-to-end supply chain, looking at opportunities to address carbon footprint across the product lifecycle.

In order to abate carbon footprint across the product lifecycle, it is important for a manufacturer to first identify the units in a product lifecycle that release carbon dioxide, calculate the carbon footprint from the sum total of the carbon released in these units and then decarbonate the entire supply chain unit-by-unit.

Calculating the carbon footprint
Calculating the carbon footprint is very important to meet the requirements or targets of a carbon management programme. Some of the reasons for calculating the carbon footprint are as follows: * To establish a realistic account of carbon emissions * To simplify and reduce the costs associated with CO2 emissions * To provide accurate information while formulating strategies for carbon management programme.
While the calculation of carbon footprint is very important, there are no standardised procedures for calculating the same. Although carbon management teams of manufacturing companies use various methodologies, results vary from one firm to another due to lack of a globally accepted procedure.